Why Farm Income Is Low In India?

Why Farm Income Is Low In India Why Farm Income Is Low In India

Agriculture in India contributes a major share to the economy – nearly 18% of India’s GDP. Despite being a major source of livelihood, directly or indirectly, for 60% of the Indian population, the income from farms is low.

A report, ‘Situation Assessment of Agricultural Households and Land and Holdings of Households in Rural India 2019’, issued by the National Statistical Office in September 2021 reveals that the income level of Indian farmers is not up to the mark and they have to settle for less.

Between July 2018 to June 2019, the average monthly income for an agricultural household was nearly ₹10,218. After considering both the paid out and imputed expenses, this amount further drops to ₹8,337. This means that the per day income is only about ₹277, less than the minimum wage rate paid under the National Employment Guarantee Scheme.

Farm income over the years

On the all-India level if we note, then we will see that the average annual income from all sources per farm household increased from ₹25,380 in 2002-03 to ₹77,112 in 2012-13 and to ₹1,22,616 in 2018-19. On the other hand, between 2002-03 and 2012-13, the average annual increase of total farm income was 20.38 percent which decelerated to 11.90 percent between 2012-13 and 2018-19.

Similarly, the aforesaid report revealed that the growth of income from crop cultivation sharply declined between 2012-13 and 2018-19. The annual increase of income was 4.65 percent between 2012-13 and 2018-19, whereas, in the 2002-03 to 2012-13 period, it increased by 21.80 percent.

What needs to be done to improve the situation

  1. Price correction and market-related interventions by the governments are needed to increase farm income. The government should change its approach from production-centric to market-centric since increased production does not guarantee enhanced income for farmers.
  2. Along with bringing MSPs, procurement infrastructure should also be strengthened. The procurement of most crops (except paddy and wheat) is poor. To benefit the farmer, it is necessary to procure 20-25% of the produce in each mandated crop. Therefore, procurement infrastructure must be strengthened.
  3. The state governments must implement the PM-AASHA scheme which benefits the farmer with:(i) Price Support Scheme: This is to provide an assured price for farmers and protect them from making distress sales during bumper harvests.

    (ii) Price Deficiency Payment Scheme: This aims to provide compensation when market prices go below MSP.

    (iii) Private Procurement Stockist Scheme: This scheme aims to allow the entry of private players in the procurement of oilseeds on a pilot basis.

  4. To protect the farmers from distress sales during periods of glut, swift action should be taken through the ‘Market Intervention Scheme’ (MIS).

The shift in approach and implementation of these steps will help increase farm income along with production. The increased production means an increased inflow of agricultural products in mandis. This will increase the work of commission agents at various mandis. The commission agents will need to invest more time in mandi accounting activities like bill generation, managing inventory and keeping track of payments. Understanding the concerns of commission agents in mandi accounting and turning them into opportunities, Bijak which is India’s Number 1 Agritrading App, came up with a mandi accounting solution called ChargeERP.

ChargeERP the solution

ChargeERP mandi accounting software has been designed keeping in mind the daily interactions of commission agents in agricultural mandis. It is a cloud-based accounting software introduced with the core aim of reducing the agent’s workload. ChargeERP is the easiest, fastest and most secure mandi accounting software available in India. One of the many benefits of this platform is that it can be accessed from anywhere and from multiple devices. It provides data security with end-to-end encryption. Plus, it doesn’t require any kind of technical or accounting expertise.

If you are looking to explore more about this next-level accounting software, feel free to dial +91 9311341199 or visit www.chargeerp.com, and request your free demo today. We also suggest that you follow us on Facebook for regular updates. You can also view the latest instructional videos on the ChargeERP YouTube channel.