Enhancing Farmers' Income-Who to target and How?

1. Pratap S Birthal
Digvijay S Negi
Devesh Roy

2. • Growing distress in farming community
• Policy target of doubling farmers income by
2022 in 2016-17 and 2017-18 budgets
Is it possible? The past experience
• Between 2002-03 and 2012-13 Per capita
income of farmers increased by 34%,
• Only large farmers (>4ha) could near-double per
capita incomes
• Farmers (< 1 hectare) could increase by 10-38%.

3. • Doubling farmers’ income or raising it to a significant
degree require re-orientation in the policy stance.
• Identification and targeting of strategies.
 Identify who within agricultural sector have low incomes
and/or are disadvantaged in terms of access to
technology, markets, credit, information and
infrastructure
 Identify where the low-income households are located,
and the location characteristics in terms of infrastructure,
information investment, technology penetration
 Will provide a menu of policy choices, and pathways to
enhance farmers’ income

6. % of total households Per capita income
70%
17%
9% 4%
Marginal Small Medium Large
0
5000
10000
15000
20000
25000
30000
35000
Marginal
Small
Medium
Large
11346
16399
22142
34941

7. Composition of income class (%) Composition of land class (%)
77
63
49
35
70
16
25
28
27
20
7 12
22
39
11
0
20
40
60
80
100
Low-income Middle High
75
56
42
16
23
20
7
15
21
2 7
17
0
10
20
30
40
50
60
70
80
90
100
Low Middle High
Marginal Small Medium Large

8. Low-
income
69.8%
Middle-
income
19.5%
High-
income
10.7%
All % of
India
Marginal 6067 20639 50478 11346 16
Small 7191 21026 55318 16399 23
Medium 7717 21436 54842 22142 31
Large 7366 22574 68284 34941 48
All 6395 20972 55450 14470 20
% of India 9 29 75 20

9. By land class By income class
47
23 16 9
33
30
57 69 80
47
14 12
11 8
12
9 8 4 4 8
0
10
20
30
40
50
60
70
80
90
100
Marginal
Small
Medium
Large
All
Wages & salaries Cultivation of crops
Farming of animals Nonfarm business
38 33 28 33
45
45 50 47
11 13 13 12
6 8 9 8
0
10
20
30
40
50
60
70
80
90
100
Low
Middle
High
All
Wages & salaries Cultivation of crops
Farming of animals Nonfarm business

11. Low-
income
Middle-
income
High-
income
All
Landholding size (ha) 0.41 0.44 0.45 0.42
Gross returns (Rs/ha) 46230 70047 105149 54686
Cost of cultivation (Rs/ha) 20575 24364 25729 21602
Net returns (Rs/ha) 25655 45683 79420 33084
% cropped area irrigated 65 61 57 64
Cropping intensity (%) 144 148 162 145
% area under high-value
crops
6.3 8.9 14.6 7.4

12. Low-
income
Middle-
income
High-
income
All
% engaged in
livestock production
47.1 58.3 59.3 50.1
% engaged in non-
farm business
7.8 16.5 20.7 10.3
% receiving wages &
salaries
52.1 69.4 73.6 56.8
% with job card 45.7 48.4 38.0 45.6

13. 45
39
55
45
51 51
47
41
0
10
20
30
40
50
60
% having access to credit % having access to
information
Low-income Middle-income High-income All

14. Low-
income
Middle-
income
High-
income
All
Illiterate 46.0 40.6 33.5 44.1
Primary 25.5 26.1 22.8 25.4
Middle 14.2 11.4 15.3 13.8
Secondary 7.8 11.1 12.0 8.7
Higher
secondary
3.7 5.3 6.8 4.2
Graduate 2.2 5.1 9.4 3.3

15. Variables
Low-
income
Middle-
income
High-
income
Electricity -0.408*** 0.325*** 0.298***
Telephone lines -0.424*** 0.338*** 0.309***
Mobile connectivity -0.323*** 0.262*** 0.231***
Pucca road -0.172*** 0.163*** 0.102**
All-weather road -0.231*** 0.239*** 0.118***
Commercial bank -0.353*** 0.236*** 0.300***
Cooperative bank -0.318*** 0.205*** 0.276***
Mandi/market -0.038 0.027 0.032

16. Marginal Small Medium Large Total
Quantity sold (%
of production) 65.2 65.6 71.9 80.2 69.7
Local private
traders 59.1 51.6 46.4 26.3 46.6
Mandies 19.4 21.1 24.3 40.2 25.9
Input dealers 12.2 11.3 6.5 4.6 8.9
Cooperatives and
government 6.4 11.4 17.6 23.5 14.2
Processors/others 3.1 4.8 4.7 5.3 4.4

17. Local
trader
Mandies
Input
dealers
Govt/coops
processors
and others
Total
Marginal 11.27 12.69 11.3 12.73 10.74 11.53
Small 11.48 12.12 11.8 13.18 11.85 11.83
Medium 12.36 14.71 12.52 12.88 13.38 13.02
Large 13.27 13.85 13.49 13.83 14.08 13.64
Total 11.48 12.93 11.64 13.03 11.37 11.86

19. UP, 26.4
BR, 10.5
WB, 6.9
OD, 5JH, 3
MP, 7
RAJ, 7
MH, 6.8
GUJ, 3.3
CHG, 3.2
KTK, 3.7
AP, 2.8
TN, 2.5
TEL, 2
KL, 0.6
UK, 1.2
HR, 1.2J&K, 0.9 HP, 0.7
PB, 0.7 AS, 3.5
NAG, 0.3MEG, 0.3
TRI, 0.2
MAN, 0.2
SIK, 0.1 MIZ, 0.1ARP, 0.1

20. BR
UP
UK
WB
JH
CHG
OD
INDIA
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MIZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
40-11% less
16-44% more
51-83% more
107-203%

21. 0
20
40
60
80
100
120
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2 BR
UP
UK
WB
JH
CHG
OD
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB
landholding (ha) Irrigation (%)

22. 6.11.34.8
35.3
19.4
2.5
8
28.8
80.3
0.3
5.910.4
25.3
67.1
3.23.6
9.6
20.417.8
78
27.124.1
79.9
8.1
20.3
60.7
26
44.9
0
10
20
30
40
50
60
70
80
90
0
10
20
30
40
50
60
70
80
Telangana
Chhattisgarh
MadhyaPradesh
Assam
ArunachalPradesh
Punjab
UttarPradesh
Karnataka
Meghalaya
Haryana
Uttarakhand
Maharashtra
Tripura
Mizoram
Bihar
Rajasthan
Gujarat
AndhraPradesh
Manipur
HimachalPradesh
Nagaland
Jharkhand
Kerala
Odisha
TamilNadu
Sikkim
WestBengal
Jammu&Kashmir
Cultivation of crops % share of high value crops in crop income

23. 0
20
40
60
80
100
0
20
40
60
80
100 BR
UP
UK
WB
JH
CHG
OD
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB
Roads
Axis Title
% villages with pucca roads % villages with mobile connectivity

24. 0
500
1000
1500
2000
2500
3000 BR
UP
UK
WB
JH
CHG
OD
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB

25. 0
20
40
60
80
100
BR
UP
UK
WB
JH
CHG
OD
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB
% villages having commecial banks % area insured

26. 0
10
20
30
40
50
60
70
80
90
100
0
1000
2000
3000
4000
5000
6000
BR
UP
UK
WB
JH
CHG
OD
TRI
MP
AS
RAJ
MH
GUJ
MAN
AP
TEL
SIK
TN
MZ
KTK
NAG
ARP
HP
MEG
J&K
HR
KL
PB
R&EExpenditure(Rs/ha)
R&E (Rs/ha) % accessing information from govt sources
%accessinginformation

28.  Limited scope through area expansion. raising
cropping intensity, reducing the inefficiency in
production
 Improving water use efficiency.
 Access to information and credit for better adoption of
technologies, and agricultural practices.
 High-value, high-growth sectors,
 Develop efficient value chains
 Technological breakthroughs :resource-use
efficiency, cost of production and improve
resilience of agriculture to climate change.

29.  Develop non-farm sector to de-stress agriculture
 Investment in human capital or skill will be a
key to rural industrialization.
 Improve Infrastructure complementarities
Doubling farmers’ income is a challenge but not
insurmountable if we follow a comprehensive,
multi-pronged and targeted approach (farm size
and location) encompassing income opportunities
and their enabling conditions such as research,
infrastructure, institutions and human resources.

30. Thank You