At the second edition of BS Manthan, Business Standard’s annual thought leadership summit, industry leaders discussed the future of Indian agriculture and its profitability, particularly for small and marginal farmers.
Agriculture: A Strength with Challenges
Ramesh Chand, member of NITI Aayog, emphasized that agriculture has always been and will continue to be India’s strength due to the country’s labour advantage. He praised small farmers for their ability to quickly adapt to global trends and new technologies.
However, CSC Sekhar, professor at the Institute of Economic Growth, and Ajay Vir Jakhar, chairman of Bharat Krishak Samaj, raised concerns about small farmers’ low incomes. Sekhar highlighted that while agriculture remains India’s backbone, 90% of farmers are struggling financially. He stressed the need for better policy and implementation.
Income Disparity in Agriculture
Ajay Jakhar pointed out that about 650 million Indians depend on agriculture, yet 60-70% of them earn less than ₹10,000 a month. Comparing this to government employees, who receive salary hikes, medical benefits, and pensions, he noted a stark income gap.
Chand countered that farm incomes vary significantly across the country. He cited Punjab, where farmers earn more than non-farmers, as an example of how agriculture can be transformed into a more profitable sector.
Is Agriculture Profitable?
Chand highlighted that the sector has seen its highest-ever growth rate of around 4% in the last decade. However, Jakhar argued that small farmers still find agriculture non-profitable. He suggested that instead of direct cash transfers, the government should support farmers with healthcare, education, and public transport.
Sekhar also criticized direct payments, suggesting deficiency payments as a better alternative. This would compensate farmers for the gap between market prices and the minimum support price of their crops.
Experts agreed that India needs a long-term agricultural policy to address these challenges, which has been missing for the last 30 years.