More on Farmer's Income

 Here is an analysis of some more results from the Situation Assessment of Agricultural Households and Land and Livestock Holdings of Households in Rural India in 2019 (https://lnkd.in/drkF7wDz) conducted by The National Statistical Office (NSO) of the Government of India.

I have taken the monthly crop income data from this report for each state, adjusted it for inflation to get the 2022-23 income and divided it by the monthly household consumption expenditure (HCE) data for 2022-23 recently released by the NSO (https://lnkd.in/dW4xkjh2). I have also estimated the composite proportion of total output that was sold at the minimum support price for each state from the first report. The results are shown in the graph below.
Overall for the country only 18.4% of the household consumption expenditure for farmers is met by their crop income and they have to perforce rely on wage labour, animal husbandry and other non-farm incomes to make ends meet. Interestingly overall for the country only 17.9% of the farm output is sold at the Minimum Support Price and the rest is sold in the open market. Therefore, the argument that doing away with the MSP and promoting open market sale of crops will improve farm incomes is not supported by this data since even after 82.1% of such sale the crop income to HCE ratio is still a dismal 18.4%.
Statewise the best ratio of crop income to HCE is for Meghalaya at 107.9% and among the major states it is the highest for Punjab at 41.8%. The proportion of output sold at MSP is highest for Kerala at 78.2% and it is zero for Manipur, Mizoram, Nagaland, Sikkim and Assam.
Combined with the fact that the average operational holding size is 0.833 hectares and that 89% are small and marginal farmers with an average outstanding debt per hectare of Rs 75000 these results paint a very sordid picture of the status of farming as a profession in this country. Thus, even though year on year farm output and gross value added are increasing, the farmers who are actually producing our food are not being able to make ends meet from their crop income alone.
Consequently, they are migrating in large numbers either seasonally or permanently for work and further immiserising the farm economy and also overburdening the cities where they get subsistence wages only.
The only solution is for the government is to invest heavily in transitioning to sustainable agriculture, ecosystem restoration and distributed generation of renewable energy to both raise rural incomes and counter climate change.