Gujarat: Dilemma of low income from agriculture vis-a-vis other states

By Rajiv Shah

There have been loud claims, which continue to be made till date, that agricultural growth in Gujarat has been a “success story”, which other states must emulate. It is also suggested that Gujarat’s agricultural growth rose from 3.3 per cent per annum in the 1990s to nearly 9 per cent over the last one decade – notwithstanding claims by some experts who say the problem is with the choice of a wrong base year. The argument runs of following lines: Gujarat has written the success story despite facing challenges like depletion of water tables, deterioration of soil and water conditions due to salinity ingress along the sea coast, irregularity of rainfall, and recurrent drought. However, few have sought to see what impact has it made on the actual income of the agriculturists of Gujarat, and how much they have gained vis-à-vis other states. Now, new figures released this month by the National Sample Survey Organization (NSSO) in its report, “Key Indicators of Situation of Agricultural Households in India”, suggest that net incomes from agricultural cultivation remain less than the national average.
Based on the survey carried out between January 2013 and December 2013, the NSSO report has found that, in the agricultural season starting in July 2012 and ending in June 2013, average monthly net receipt from cultivation per agricultural household was Rs 2,933, which was less than the national average, Rs 3,081. Ranking No 12 in a list of 21 major Indian states, this is less than 11 other states. The highest monthly income from cultivation per household was registered by Punjab (Rs 10,862), which is thrice that of Gujarat, followed by Haryana (Rs 7,867), Karnataka (Rs 4,930), and Telangana (Rs 4,227). What should be of particular concern to Gujarat policy makers is, households in poorer states registered a higher net income from cultivation than Gujarat – Rs 4,211 in Assam, Rs 4,016 in Madhya Pradesh, Rs 3,347 in Chhattisgarh, and Rs 3,138 in Rajasthan.
Interestingly, the data suggest that those farmers involved in animal husbandry – an activity in which Gujarat has been traditionally strong because of the powerful Amul cooperative movement launched several decades ago – are able to get much better net receipts compared to almost all major Indian states. The NSSO in its report has identified this category as “farming of animals.” Thus, as against the national average of just about Rs 763 per month per household under this head, Gujarat’s farmers’ net income was a whopping Rs 1,930 from rearing livestock. This is better compared to all other states, except Haryana, whose rural households earned Rs 2,645 per month per household from livestock activity. Even Punjab’s average households earned less than that of Gujarat – Rs 1,658.
Based on NSSO’s 70th round, the report has further revealed that there are a total of 39,30,500 agricultural households in Gujarat, out of which 58.4 per cent are involved in cultivation, which is considerably less than the national average (63.5 per cent). However, what is more interesting is that, Gujarat’s nine per cent agricultural households – next only to Haryana (9.1 per cent) and Tamil Nadu (10.2 per cent) – are involved in livestock activities (thanks again to the white revolution), as against the all-India average of just 3.7 per cent. At the same time, the survey seems to suggest that there has been considerable marginalization of the farming community in Gujarat compared to most Indian states, with a large number of per cent of families dependent on wage labour for survival.
Thus, as against the national average of 22 per cent agricultural households involved in wage earning as their primary means for eking a livelihood, in Gujarat it was 26.7 per cent, which is higher than most states but six – Rajasthan (33.4 per cent), Punjab (31.9 per cent), Kerala (29.9 per cent), Tamil Nadu (29.3 per cent), Andhra Pradesh (28 per cent), and West Bengal (26.8 per cent). Average wages in agriculture per household per month were Rs 2,683 in Gujarat, as against the national average of Rs 2,071. There aren’t many states where agricultural households earn more than Gujarat’s, either – these are Jammu & Kashmir (Rs 7,336), Kerala (Rs 5,254), Himachal Pradesh (Rs 4,030), Haryana (Rs 3,491), and Tamil Nadu (Rs 2,902).
Also of interest is the fact that very few agricultural households in Gujarat – just about 3.7 per cent of the total – are involved in non-agricultural rural enterprises. This is against the national average of 4.7 per cent. Here, Kerala leading with 13.4 per cent of households.
While there is no explanation available anywhere, including in the NSSO report, as to why Gujarat’s income from cultivation is lower than as many as 11 other states, from available indications, this could be because Gujarat’s farmers may be making much higher consumption expenditure in agriculture compared to other states. As against the all-India average of Rs 6,223 per household per month, the average Gujarat household made a consumption expenditure of Rs 7,672, which is higher than most states, except four – Punjab (Rs 13,311), Kerala (Rs 11,008), Haryana (Rs 10,637), and Jammu & Kashmir (Rs 9,017).

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A version of this blog was first published in The Times of India

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