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LATEST NEWS UPDATES | From Plate to Plough: Lean year as a foundation -Ashok Gulati & Shweta Saini

From Plate to Plough: Lean year as a foundation -Ashok Gulati & Shweta Saini

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published Published on Aug 24, 2018   modified Modified on Aug 24, 2018
-The Indian Express

NABARD’s new survey offers a baseline to double farmers’ incomes. But is a survey done in a drought year a reliable yardstick?

On August 16, NABARD presented the nation with a gift when it released the results of its All India Rural Financial Inclusion Survey (NAFIS). Among other things, the survey estimates 2015-16 farmers’ income levels. In February 2016, when Prime Minister Narendra Modi presented his vision of doubling farmer incomes by 2022-23, there was no assessment of the base (2015-16) aggregate income levels. The estimates from NAFIS fill that gap.

NAFIS is based on a sample of 40,327 rural households in 29 states of which 48 per cent are agriculture households (agri-HHs); 87 per cent are small and marginal farmer households. The survey combines the strengths of the NSSO’s Situation Assessment Survey (SAS) and RBI’s All India Debt and Investment Survey.

Based on household-level data, NAFIS estimates that an average Indian farming household earned Rs 8,931/month (Rs 1,07,172/year) in agriculture year 2015-16. This is up from Rs 2,115 earned in 2002-03 as per the NSSO’s SAS, implying a compounded annual growth rate (CAGR) of about 12 per cent in nominal terms and 3.7 per cent in real terms (2015-16 base) in 13 years. One must, however, be cautious when comparing the NSSO and NAFIS estimates. Because of a wider definition of rural areas, unlike NSSO, the NABARD survey includes areas that are bigger including Tier Three, Four and Five towns. At Rs 5,000, it has a higher threshold level of income from agricultural and allied activities compared to the NSSO’s threshold income level of Rs 3,000. This is likely to create an upward-bias in NAFIS’s estimates of farmers’ income. If NAFIS followed NSSO’s definitions, the 2015-16 estimate of farmers’ income would have been somewhat lower, and so would have been its growth rate (below 3.7 per cent).

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The Indian Express, 20 August, 2018, https://indianexpress.com/article/opinion/columns/farm-income-agricultural-economy-nabard-national-agricultural-survey-5314680/


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