In Charts: Farmer Incomes Have Risen But So Has Indebtedness
While farm incomes have risen, so has indebtedness, shows the Situation Assessment of Agricultural Households in Rural India for 2019. Farm incomes, however, remain woefully low and most farm households are having to supplement income from cultivation with other sources.
93.1 million or 54% of households in rural India were agricultural as of the July 2018-June 2019 period, according to the survey, conducted by the National Statistics Office and published last week. This was lower than 57.8% during the agricultural year July 2012 – June 2013, at the time of the last such survey.
Average monthly income from different sources per agricultural household rose to Rs 10,218 during July 2018- June 2019, compared to Rs 6,426 during July 2012- June 2013.
The estimates were obtained using the "paid-out expenses approach" or out of pocket expenses alone. When taking into account imputed expenses as well, total monthly income on an average was lower at Rs 8,337.
The rise in income was led by wage income that made up for 39.8% of all income per agricultural household. Net receipts from crop production was at Rs 3,798 on average per month, only marginally higher than the Rs 3,081 in 2012-13.
Agricultural households with self-employed in crop production rose to 68.9% in 2019 compared to 63.4% in 2013. But those in livestock farming and in other agricultural activities declined.
Regular wage and salaried employment saw a sharp decline to 7.7% compared to 22% in the same duration.
Area Under Ownership In Rural Areas Declined
Across rural households—agricultural and non-agricultural—the average size of household ownership holdings declined to 0.5 hectares compared to 0.6 hectares in 2013.
This was accompanied with a rise in the percentage of landless households, to 8.2% in 2019, from 7.4% in 2013.
Rise In Outstanding Loans
Average amount of outstanding loan per agricultural household rose by 57.7% to Rs 74,121 in 2019, according to the survey.
The average amount of outstanding loan per agricultural household shows a direct correlation with the size class of land possessed, with those households that own larger land parcels having highest outstanding liabilities.
Those with a large land sizes were also more likely to be in debt due to better access to institutional sources of credit.
81.4% of those agricultural households that were in possession of over ten hectares of land were indebted, compared to 57.45% of those who were in possession of 1-2 hectares of land.
Among those agricultural households who did have loans outstanding, informal sources of credit remained dominant for those with land holdings of less than 0.01 hectare. Those in possession of land over 0.01 hectare, had greater access to bank credit and other sources of formal credit.
While those with larger land holdings took loans for capital and revenue expenditure in farm business, those in possession of smaller land holdings for education, medicine, housing and other consumption expenditure.
On an aggregate, the percentage of indebted agricultural households didn't change as much at 50.2% in 2019.
Awareness, Insurance Remains Low
The survey also judged the awareness of policy support measures among agricultural households. Awareness of minimum support prices, offered to ensure a certain income from cultivation was low.
In the July–December 2018 period, the percentage of households aware about MSP, ranged between 4.3% for rabi and 40.7% for paddy.
In the January 2019-June 2019 period, the percentage of households aware about MSP ranged between 12% in case of coconuts and 56.9% for sugarcane.
Percentage of households insuring their crops remained low.
In the July–December 2018 period, the percentage of households insuring the crops ranged between a high of 27.5% in case of soyabean, and a low of 1.2% for potatoes. 8.3% households insured paddy, while 5.6% insured maize.
In the January–June 2019 period, the percentage of households insuring the crops ranged between a high of 28.8% in case of cotton and a low of 1.1% for coconut. 13.9% insured paddy, 4.2% insured maize, and 6.8% households insured wheat.