1. Enhancing Farmers’ Income: Challenges and Opportunities
PK Joshi
International Food Policy Research Institute
NASC Complex, Pusa, New Delhi India
Paper presented in the National Workshop on “Doubling Farmers’ Income through Scaling-up”, organized by ICRISAT, VIF, J-Farm, on 15 March 2016 in New Delhi

2. Background Income sources Income from crop = Area expansion
48% cultivation; 32% wages; 12% animal husbandry; 8% non-farm activities
Income from crop =
(Production X Price) – Cost
(Area X Yield X Price) – {(input quantities X Prices) + (wages X labor)}
Area expansion
Net sown area remains around 140 m ha
Cropping intensity was below 140%
Yield increase
During last 15 years, rice yields increased only 680 kgs (45 kg/year)
Wheat: 835 kg (55 kg/year)
Chickpea: 250 kg (17 kg/year); Pigeon pea: 177 kg (12 kg/year)

3. Rising wage rates and wage-share in value of produce
Year
Hourly Wage (Rs)
Paddyprice (Rs/q)
Labor used (hour)
Total wage bill (Rs)
Yield (Q/ha)
Gross value of produceRs/ha
Wage share (%) of GVP
2004
6.21
504
875
5433 23
11494 47
2005
6.47
478
831
5379 26
12331 44
2006
6.76
531
840
5676 25
13329 43
2007
7.21
632
771
5556 29
18318 30
2008
9.32
726
797
7423 27
19344 38
2009
10.14
856
768
7784 19
16244 48
2010
11.83
968
757
8954
18680
2011
16.34
830
13023 28
22881 57
2012
18.37
977
808
14842 24
23695 63

4. Is agricultural diversification an important source of increasing incomes?
Share of crop sector is falling
Rice, wheat, coarse cereals, pulses, oilseed
Livestock sector is gaining
Dairy and poultry
Fisheries is also improving
Marine to inland
Agriculture growth was largely driven by livestock and horticulture sectors

5. Share of different crops in value and area of all crops

6. Contribution of high-value crops to overall growth, %
Item
Compound growth in real value (per annum)
Share in overall growth (%)
1980s
1990s
2000s
Cereals
2.0
3.6
0.7
30.7
43.0
6.9
Pulses
1.0
3.0
4.6
0.3
4.8
Oilseeds
-0.7
5.4
21.4
-2.6
13.0
Fibers
1.7
2.6
9.9
1.8
14.7
S’cane
1.2
5.0
0.0
3.8
13.1
-1.3
Horti
6.3
5.8
33.9
44.6
60.0
Other
0.9
6.8
0.8
-0.1
All
3.1
3.7
3.3
100

7. Contribution of various sources to overall growth

8. Potential and constraints
Potential exists to raise income (Pratap Birthal, 2017)
Low income marginal farmers: - Rs 6K/annum/holding
High income marginal farmers: - Rs 50k/annum/holding)
Low income marginal farmers largely concentrated in Eastern India
Unorganized agriculture sector
Way of life; no business model
Small and fragmented size of holdings
1.84 ha in 1980/81 to 1.15 ha
Average size of holding of 85% holdings is 0.61 ha
0.39 ha of 63% holdings (marginal, part of smallholding category)
Poor adoption of improved varieties and technologies
North-west India versus eastern India
Diversion and degradation of soil and water resources
Weak market linkage
Low marketable surplus
Climate change

9. Important government programs and policies
Prime Minister Irrigation Scheme
National Micro irrigation Mission
Integrated Watershed Management Program
National Food Security Mission
National Horticulture Mission
Bringing Green Revolution in Eastern India
National Mission on Sustainable Agriculture
Prime Minister Fasal Bima Yojana (Agriculture insurance)
Agriculture extension system
Research system KVKs ATMA
Agricultural marketing: MSP, e-NAM; warehouse receipt, commodity exchange

10. Way forward Promote high potential allied activities
Horticulture, livestock, fisheries
Farming with business model
Market driven agriculture
Primary/secondary processing, branding and retailing
Aggregation of production and marketing
Farmer Producer Organizations (SFAC)
Inclusive market reforms
Correct frontend
Invest in agriculture (investment in irrigation, agricultural research, education and health)
Convergence of programs

11. Thank you