Job creation at the farmer’s doorstep
Mains Paper 2: Economy
Prelims level: Employment
Mains level: Indian Economy and issues relating to planning, mobilization of
development and employment
- The Telangana government’s recent announcement of the Rythu Bandhu
scheme has spotlighted the policy of utilising cash transfer to assist
land-owning farmers with a non-agricultural income instead of the
traditional policy measures of price interventions, trade restrictions and
farm loan waivers.
- The scheme is nominally intended as investment support for inputs
such as seeds and pesticides.
- It implies a transfer of ₹8,000 per acre for every landowning
farmer over two crop seasons.
Analysing the economic situation
- Rural India’s economic situation continues to worsen.
- A recent survey by the National Bank for Agriculture and Rural
Development (All India Rural Financial Inclusion Survey) shows that the
average monthly income of rural households is ₹8,059, with agricultural
households deriving only 43% of their income from agriculture; most of it is
from providing daily wage labour and government jobs.
- While agricultural households typically had a higher income than
non-agricultural households, they had higher debt on average (₹1,04,602 and
- This is also reflected in the decoupling of urban Indian incomes
from rural India with per capita income in rural India lagging a fair bit.
- The government has sought to double farmer income by raising
minimum support prices, but such initiatives would apply directly only to
48% of rural India, with non-agricultural households being left behind.
- Perhaps we need to look at alternative sources of income.
Diversification is the key
- The conversation on raising farmer income needs to embrace
non-farm diversification, an important pathway for empowering landless
labourers and marginal farmers, as development economist Daniel Coppard
recommended in a 2001 report.
- Diversification, away from marginal farming, is typically the
answer as a few papers on the subject show (Adams and He, Lanjouw, Janvry,
- It helping to overcome land constraint to income growth, while
allowing farmers to cope with exogenous shocks through additional income.
- In some cases, it ‘even allows them to reinvest in productivity
enhancing agricultural technologies’. Within this, there are two key
sectors, where appropriate reforms can lead to significant income support
for marginal farmers.
Opportunity in livestock
- The livestock sector can offer significant opportunities for
bolstering non-farm income.
- The current breeding policy (based on exotic blood and artificial
insemination) needs to be revamped. A national breeding policy is also
needed to upgrade the best performing indigenous breeds.
- Buffalo breeding ought to be given more attention, while poultry
breeding should be focussed on conservation.
- State governments should be encouraged to participate in national
breeding policy implementation, creating an environment for competition
among alternative suppliers of artificial insemination. Consensus must be
built among breeders to develop indigenous breeds.
- The feed supply (currently inadequate) needs to be mitigated
through greater imports, with feed technology packages developed for
- Geographical information system-based analysis must be utilised to
map production systems.
- Private investment must also be encouraged. Animal health care
should become a priority, with greater investment in preventive health care.
- The government needs to create better incentive structures for
investment in livestock in the States that are lagging while harmonising
rules, regulations and regulatory authorities across States.
- State governments should sponsor research and assessment of the
market, along with highlighting investment potential.
Focus on migrant workers
- We should also embrace the fact that agricultural labourers
routinely seek construction-related daily wage labour to bolster their
- Improving the conditions of migrant workers in the construction
sector requires a multi-pronged approach.
- First, we have to enable migrant workers to get deserved access to
various government (Central and State) schemes, despite the lack of identity
- Access to Anganwadi facilities should be provided regardless of
their identity documents. While multiple laws exist for the welfare of
construction workers, compliance is abysmal. The penalties for
non-compliance have to be increased to a significant fraction of the
construction cost, payable by the builder.
- Registration of workers with the Welfare Board should be made
mandatory and be the responsibility of the contractor and the builder. I
- If the contractor is found to engage or employ any worker without
a registration card/ID, penalties (monetary and non-monetary) should be
imposed, which would then be used for improving awareness and penetration of
registration cards and their benefits.
- The registration cards should be linked to their Jan-Dhan
accounts, and transfer of payments on a periodic basis be made directly to
their accounts. The condition of women, strict anti-harassment laws should
- Creche facilities at construction sites should be provided to also
ensure that children are not neglected; they often play with gravel and
dust, which can threaten their health.
- Utilisation of a construction cess has to be improved if we are to
make any difference to the lives of our construction workers.
- Workers should also be provided with training and skilling in
their areas of interest, as it could lead to higher earnings and
- Our policies should help create sustainable, long-term, rural,
non-farm employment options which can aid the rural poor in overcoming
barriers to economic prosperity.
- India’s rural development policies should increasingly focus on
developing markets, infrastructure and institutions that can help sectors
such as livestock and construction growth.
- While India’s post-Independence rural policy has primarily been
about driving people away from agriculture and towards cities, we must now
incentivise job creation at their doorstep.
Q.1) Which of the following reasons necessitated the intervention of State
in the industrial
development after independence?
1. The private sector lacked the huge capital required for setting up of
2. The private players had less incentive to invest in industrialisation due to
demand for industrial goods.
3. The need to maximise the profit necessitated State intervention.
Select the correct answer using the code given below.
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Q.1) Critically evaluate the conversation on raising farmer income needs
to embrace non-farm diversification.