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Doubling of Farm Income in India: Its Prospects and Challenges 1Navajyoti Gogoi 1Research Scholar, Gauhati University

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Doubling of Farm Income in India: Its Prospects and Challenges 1Navajyoti Gogoi 1Research Scholar, Gauhati University JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 Doubling of Farm Income in India: Its Prospects and Challenges 1Navajyoti Gogoi 1Research Scholar, Gauhati University Received: 20 May 2020 Revised and Accepted: 25 June 2020 Abstract: Though India is the second largest contributor of world agricultural production, but relative farm income of the farmers of India is very low. Heavy dependency on monsoon, large amount of working population engaged in agricultural sector, technological gap, fragmentation of agricultural land holding are responsible for low farm income in India. To increase the farm income and promote welfare level of Indian farmers Government of India has adopted a strategy called “Doubling of Farmers’ income by 2022” in 2016. Based on secondary data from 1993-94 to 2015-16 this paper tries to examine the prospects of achieving the goal within the targeted period. It further calculates the growth rate of farm income by using simple growth estimating formula and also calculates the required growth rate of farm income to make it happen. It found that, apart from the production enhancing measures post production issues related with farm output, development of new institutions and reviving of existing ones is crucial for accelerating growth rate of farm income. On the basis these factors the present paper attempts to analyse prospects and challenges of doubling farm income. Keywords: Doubling of farm income, farmers’ income, growth rate of farm income, prospects, challenges I. INTRODUCTION Farm income refers to the profits and losses arising from the operation of a farm during a specified accounting period: the calendar year for farmers, from 1st Jan. to 31st Dec. The term farm is used for specialized units such as arable farms, vegetable farms, dairy, pig and poultry farms and land used for the production of natural fibres, bio fuel and other commodities including aquaculture. In India farming sector absorbs a huge portion of its total working population and contributes significantly less amount towards country’s GDP compare to its employment. In contrast to it, farming sector absorbs a relatively less amount of the total working population in the economically advanced countries. Though India is the second largest contributor of world agricultural production, but the relative farm income of the farmers of India is far below than that of the developed nations. Heavy dependency on monsoon, problem of large amount of working population engaged in agricultural sector, technological gap, inadequate amount of agricultural land holding by the farmers of India which are the main factors responsible for low farm income in India. To increase the income of the farmers, Government of India sets a target called “Doubling of Farmers’ Income by the year 2022” in February 2016. In this context Govt. had been making integrated efforts and initiated and at same time adopted a set of multiple reforms. A committee was also set to meet the targeted goals under the headship of Ashok Dalwai. The committee had identified some factors by which famers’ income could be accelerated consisting both the on-farm and non-farm factors. The present study is an attempt to show the recent trend of farm income as well as to analyse the various factors and challenges of doubling farm income. Though the Government have considered both the on-farm and non-farm income of the farmers while talking about the goal of doubling farmers’ income. But in this paper, we have considered only the on-farm income of the farmers and the non-farm income is completely ignored while discussing about the target. II. OJECTIVES The present study is intended to analyse the following two objectives: 1. To study the past trend of farm income in India. 2. To examine the prospects and challenges of doubling farm income in India. III. DATA SOURCES AND METHODOLOGY The present study is descriptive in nature and involved data collection from secondary sources. To make the study comprehensive, different journals, research articles, e-books and newspapers are used. To analyse the trend of farm and farmers’ income from 1993-94 to 2015-16 necessary data are collected from policy paper of NITI Aayog, and also the growth rate of per cultivator farm income is calculated for the years taken into consideration. The other important data which have been analysing in this paper are taken from several Government organisations: NSSO, CSO, NABARD, SAS (2003) and SAS (2013). Besides, with the help of the following formula, the annual required growth rate of per- farmer income is estimated, so that it can meet the target by the year 2022-23: 1791 JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 t Yt = Y0 (1+r) . Where, Yt = Required farmer’s income Y0 = Farmer’s income at the base year r = Required growth rate t = Time period. Here, we have considered only the on-farm income of the farmers and the non-farm income like non-farm wages and salaries are completely ruled out while calculating the growth rate of per-farmer income. IV. TREND OF INDIA’S FARM INCOME IN POST REFORM PERIODS Since we hardly found any adequate information about the farm income, therefore it often seems too difficult to study current and past trend of farm income properly. Some researchers have tried to measure the farm income and, in this regard, a notable study is made by Ramesh Chand (2015) and calculated the total and per-cultivator farm income for the period 1993-94 to 2015-16. To estimate the income of agricultural household, two national level surveys of NSSO titled Situation Assessment Survey of Farmers (2003) and Situation Assessment Survey of Agricultural Households (SAS) in 2013 were conducted. They provided estimates of farmers’ income from various agricultural and non-agricultural sources. According to data provided by SAS for the year 2012-13, the average annual income of a farm household was Rs. 77,112 (current prices) out of which 60% were derived from farm activities and remaining 40% were derived from non-farm activities (wage, salary, non-farm business etc.). From their data it is found that, in 2012-13 the share of livestock activity in the total farm income was close to 19.89%, which was much lower than CSO estimates of share of livestock in net value added in agriculture sector for the same year which was 28.6% by CSO estimation. This difference was found due to the adoption of different definitions used by SAS and CSO (specific definition of farmer used in the SAS 20131). The most recent estimates of farm income were prepared by Ramesh Chand (2015) for the period 1993-94 to 2015-16 which is presented in the table 1 at nominal as well as at real prices. Table I: Total Farm Income of all Farmers (Rs. Crore) YEAR CPIAL Market price Real price Cultivators (number in (2004-05=100) (INR) (INR) crores) 1993-94 59 177954 303814 14.39 1999-00 90 335631 372923 13.88 2004-05 100 434160 434160 16.61 2011-12 183 1157128 632514 14.62 2012-13 220 1312730 596695 14.36 2013-14 245 1477159 602922 14.1 2014-15 261 1558223 597020 13.85 2015-16 273 1634625 598764 13.6 Source: National Institution for Transforming India, Government of India, New Delhi, March 2017 Note: Farmers’ income is expressed in real terms using CPIAL2 (2004-05) as deflator. From the table 1 it is seen that during past 22 years between 1993-94 and 2015-16, farmers’ income in nominal terms increased from Rs.177954 Cr. to Rs.1634625 Cr. which is 9.18 times of 1993-94s income. Due to CPIAL changed by 4.62 times, real income of all farmers just got doubled in this 22-years period. According to the data presented in the table reveal that during 1993-94 to 2004-05, the first decade of the economic liberalisation CPIAL increased at 4.91% annually, while income of all farmers increased by 8.45% annually at nominal price. The real annual growth rate of farmers’ income was just 3.30%. This shows, in real term farmers’ income increased very slowly relative to nominal term. 1 SAS defines an agricultural household as a household receiving some value of produce more than Rs.3000 from agricultural activities and having at least one member self-employed in agriculture during last 365 days. 2CPIAL: Consumer Price Index for Agricultural Labourers has been compiling Consumer Price Index for agricultural labourers since September, 1964. 1792 JOURNAL OF CRITICAL REVIEWS ISSN- 2394-5125 VOL 7, ISSUE 18, 2020 Since total farm income of all farmers do not reflect the overall welfare level of farmers, therefore the following table is presented to analyse the trend of per-farmer income from 1993-94 to 2015-16: Table II: Per-Cultivator Farm Income INR YEAR Cultivators CPIAL Current Price Real Price Growth rate Growth rate number (in (2004- at Current at Real Price crores) 05=100) Price 1993-94 14.39 59 12365 20958 1999-00 13.88 90 24188 26876 _ _ 2004-05 16.61 100 26146 26146 _ _ 2011-12 14.62 183 79137 43244 _ _ 2012-13 14.36 220 91416 41553 15.52 -3.91 2013-14 14.10 245 104763 42760 14.60 2.91 2014-15 13.85 261 112507 43106 7.39 0.81 2015-16 13.60 273 120193 44027 6.83 2.14 Source: National Institution for Transforming India, Government of India, New Delhi, March 2017 Note: Data for some particular years were not found. The above table presents the annual per cultivator income for the same period of time explained in the previous table (table 1) and shows that per-cultivator income during this timeframe was increasing at current price, while per cultivator income at real price was volatile.
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