Thursday, February 22

Farmers’ Stress, Income and the role of Non-Farm Business

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By Brajesh Jha

Working Paper No- 408

Agricultural policies in India have largely been geared to increase domestic production and productivity in agriculture. Some of the reasons for farmers’ stress are rooted in these policies. For example, land related policies have largely focused on large land-owners, prohibition of tenancy, and similar measures; while the number of unviable size of holdings continues to increase. Similarly, fair price to farmers was presumed to have been taken care of by the regulated market, but its number and performance have a discouraging effect on farmer’s price. The opening up of the economy also throws up new challenges for farmers. In this perspective, concern for farmers’ income is important. However, farmer’s income depends on various farm and non-farm sources. Development experience suggests that non-farm sources of farmers’ income become important as a country develops. Surprisingly, recent discussions on farmers’ income have not appreciated the contribution of non-farm business in farmers’ income. Therefore, this paper discusses role of non-farm business in farmer’s income based on the NSS Situation Assessment Survey of farmers of 2004 and 2014. This further ascertains the robustness of non-farm sources of income from the NSS employment data.

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