How Much Does a Small Farmer Make?

By Indra

Apr. 23, 2008

A 2005 cost analysis of a kharif crop grown by a marginal farmer from Basrahiya village in Lucknow district is revealing. The planning department of UP government did the study.

Land cultivated: 3 bighas (0.75 hectare)
Investment: Rs 12,200
Total returns expected: Rs 20,800
Labour input: 5-6 months of work by the farmer, his adult son and daughter-in-law
Net profit: Rs 8,600 or Rs 1,720 per month

Amount each of the three would have earned had they worked as wage labourers for 30 days: Rs 1,800 (at Rs 60 a day)

A higher landholding might have gone in favour of the farmers. But the with division of the land among siblings and the their siblings over time, the land holding is bound to reduce. The average landholding of 2.3 hectares in1971 has declined to 1.3 by 2001-02 and currently perhaps stands at around 1 hectare. It will be difficult to make it viable for leading a good living. Land consolidation must be encouraged with changes in existing laws of heritance as well as land ceilings. Land should go to the one who is interested and educated enough for proper farming instead of being equally divided among all siblings. Why can’t the minimum size of a holding be 10 acres for irrigated land, and 25 acres for unirrigated land?

Many political decisions such as free power resulted in excessive wasteful irrigation that has caused serious drop in water tables and so scarcity of power in many regions and demanding installation of extra powerful pumps. Use of sprinklers could have been more popular to save water requirement. Governments failed to go ahead with irrigation projects and river interlinking in significant way.

Excessive use of chemical fertilizers to improve productivity has caused a severe drop in the fertility of soil. Nothing has been done for rejuvenation of the soil through rotational practices in cultivation or to encourage natural biological manures.

Total return can only improve if the yield that is very low in India improves significantly through better inputs- quality or seeds and fertilizers or MSP is increased based on global market price.

Can the yield be improved significantly?

Why can’t the Minimum Support Price be enhanced significantly? If the food prices world over is increasing, why should the grower not get the advantages of that? If it can happen with oil producing countries, who have gone so rich with its oil reserve, why shouldn’t the farmers get that route to prosperity? If the oil coming out from mother earth can go to $117 per barrel last week from $10 a barrel nine years ago, why shouldn’t the farmers get the similar advantage? After all the Commission on Agricultural Costs and Prices has recommended a steep rise in MMSP, ranging from 25% to 94%, for most farm produce. It will certainly mean a steep increase in MSP of food grains also means inflation. Why shouldn’t it be acceptable by the more vocal and politically critical urban middle class? Will the top 25% be ready to sacrifice for the bottom 25% of the population through a differential pricing? As it appears it can’t be checked for long. Unfortunately, the farmers will not get benefited unless the intermediaries are removed from the system. Can the retailers pay a royalty to farmers with every increase in food grains price for the end consumers?

It is unfortunate that the governments- both center and state are still not ready to do anything in big way for improving the yield. For instance, many feel that Bihar is a sleeping giant in food grain production and can produce much more than what Punjab and Haryana has done with green revolution. Unfortunately, over the last 60 years nothing has been done for flood control followed by draught in North Bihar. No major projects were undertaken. Centre can’t live forever accusing the state government.

And every farming family must have some additional means of earning too. To cope up with the daily expenses of the family, the family can think of some easy means.
If it can keep cattle and spare some milk to the collecting agent, it can get a daily earning.
If it grows some vegetables on its rooftop, it can sell and get some money regularly.
If it grows some goats and sheep or poultry, it can sell periodically and earn.
If it plants some trees, that can become fixed deposit for the family.

Many in rural India require to be told these ways or to be trained in some skills that can earn them extra earnings.

All business associations such as CII and FICCI must discuss and find ways to provide extra earnings to the families of the rural India by outsourcing some of the tasks that can easily be done there with better physical and digital connectivity.

And the rural India can become a better place to live.
 

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