Doubling Farmers Income : Bihar Context

RKP Singh

Former Adviser, State Farmers C ommission, Bihar

On February 28, 2016, the Prime Minister of India set forth the target of doubling farmer’s income by 2022. However, given the various constraints and problems facing Indian agriculture, the feasibility of achieving such a goal has been largely debated . The smallness of average farm size in Bihar(0.37 ha) is one such major constraint . There is also a dichotomy between doubling of “farm income” and doubling of “farmers’ income” by the year 2022. An agricultural   household is defined as a household receiving some value of produce from agriculture activities (e.g., cultivation of field crops, horticultural crops, fodder crops, plantation, animal husbandry, poultry, fishery, piggery, beekeeping, vermin-culture, sericulture, etc.,) during last 365 days ( Report of NSS- 70th round, Some Characteristics of Agricultural Households in India, 2013).
              Bihar, with a population of about 104 million, is the third most-populated state in India, after Uttar Pradesh (200 million) and Maharashtra (114 million).Having about 2.9 percent of the geographical area of India and about 9 percent of its population, Bihar has the distinction of being the most densely populated statein the country. Till recently, it was also among the slowest growing states of the country. The growth rate of state’s gross domestic product (GDP) has considerably accelerated during the past six years, with state economy growing at more than 10 percent per annum, yet the state continues to be among the economically most backward states in India, with one of the lowest per capita income and highest incidence of poverty. Further, prevalence of under-nutrition and malnutrition along with high mortality rate among children is rampant in the state .Though the structure of economy underwent a sea change in Bihar over time, agriculture continues to be a significant sector as it contributes about 19 percent tothe State Net Domestic Product and provides employment to about 67 percent of rural work force. Agricultural households1 are about 51 percent of the total rural households in the state , dominated by marginal and small landholder farms. The marginal farms (< 1 ha) constituting about 91 percent of the total farms and owning about 57 percent of the operated land, dominate the agricultural sector in Bihar. They are the real players in the rural scenario of Bihar. The dominance of marginal and small-scale farms (< 2 ha) and low labour productivity as main features of rural Bihar are expected to continue in the foreseeable future as pressure of labour on land resource is still increasing. These marginal and small farmers, with declining resource base, require a steady flow of income from farming as well as other income-generating activities. In Bihar, the per-capita income has recorded the highest growth during the past 5 years and it increased from Rs.21,750 in 2011-12 to Rs.26,6931 in 2016-17(at 2011-12 constant prices). But, much of this growth has been contributed by the secondary and tertiary sectors, though the major workforce in the state is concentrated in the agriculture and sub-sectors.
             Despite unfavourable weather the agriculture sector in the state has also recorded an impressive annual growth and has registered about 6.6 percent annual growth during the past five years (2011-2016). The growth in Bihar economy in general and agriculture sector in particular during the recent years might have contributed to increase the per capita income of farm  households in the state. Bu the evidences on the sources of increasing per capita income of households is lacking in the state. It is a moot question for investigation whether the increase in income has been due to agriculture sector or through other sources? The economic and social well-being of a farm household depends on the total household income, which may be derived from agricultural activities (crops,animal husbandry, fisheries) and non-agricultural sources (salaries/wages, non farm activities, remittances, transfer payments, etc.). Further, the nature and pattern of household farm income is not static and may change frequently.
            To know the dynamics of farmers’ income in Bihar the longitudinal information from the field survey carried out under project entitled” Village Dynamics in South Asia”has been  the basis to explore the dynamics of farm household incomes. The mean annual per capita income of
a farm household in Biihar at 2004-05 prices varied from Rs. 865 (≈ USD 22) in 2010-11 to 
Rs. 1134 (≈ USD 30) in 2014-15. The total income of a farm household has grown at the average rate of about 6 percent per annum, which is quite impressive. The Situation Assessment Survey of Agricultural Households has reported the lowestmonthly income of Rs. 3,558 per agricultural household in 2012-13 in Bihar against the national average monthly agricultural household income of Rs 6,426. The agriculturally developed states had a higher income. For example, Punjab farmers had the highest income at Rs 18,059, followed by farmers in Haryana (Rs 14,434), and Kerala (Rs 11,888) .
             The income level has shown a clear positive  elation with size of landholding. Further, the sources of household income are quite diverse and the  cultivation contributes only one-fourth to the total income of farm households. This has significant implications and calls for holistic rural development strategies for enhancing farmers’ income. The crops alone are not likely to double the farmers’ income within the stipulated time period. The level of remittances has shown a sign of decline, while the share of transfer  payments and non-farm business has increased during 2010-11 to 2014-15. The inter and intra class inequality in farm household income is also prominent but diminishing with time.The farm assets, diversification and education level have turned out to be important drivers of farm household income and suggest that emphasis on farm and non-farm sector diversification will be crucial for enhancing farmers’ income. The  investment on human capital or skill development will be equally important in the endeavour of increasing farmers’ income effectively and sustainably. Finally, the complementarities among various types of infrastructures and institutions need to be ensured to accelerate the growth of farmers’ income.

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