Doubling over farmers’ incomes

About a decade ago, India set a target to double farm incomes by 2022. Official data shows that this has indeed happened, as incomes rose by over 100 per cent between 2015-16 and 2022-23. Independent reports state that the target was missed by about 25 per cent, and there are wide variations across the states. To be fair, investments in irrigation, seeds, and technology raised yields. Some diversified into horticulture, dairy, poultry, and fisheries, which offer higher returns. Certain welfare schemes provided some stability. Digital markets, and agriculture logistics improved price discovery.

Yet, the truth is that the gains are uneven. Rich farmers, and educated professionals-turned-farmers benefit more. For most growers, principally those with land holdings of less than one hectare, and who are dubbed small and marginal, rising input costs erode gains, and erratic monsoons, floods, and droughts destabilise incomes. They are vulnerable to market volatility, price crashes, mounting debts, availability of inputs, and exploitation by the middlemen. The persistent income stress leads to suicides. Still, NITI Aayog’s Ramesh Chand contends that farm incomes were up 108 per cent between 2015-16 and 2022-23, and between 2014-15 and 2023-24, operating surplus/mixed income rose by 126 per cent.

Past studies question the achievements. A study by the Organisation for Economic Cooperation and Development (OECD), and Indian Council for Research on International Economic Relations found that Indian farmers suffer due to complex regulations, and trade restrictions, which together lead to prices that are below comparable global levels. “Despite large subsidies… which somewhat offset the price-depressing effect of market interventions, the overall effect is that policy intervention actually reduces gross farm revenues by over six per cent per year,” stated the study. In addition, the reported doubling of incomes is in nominal terms, and not adjusted for inflation. Real incomes are, therefore, lower.

Couple this with the fact that because agriculture is a state subject, despite the central policies and schemes, there is a wide skew between the states. Those with weaker irrigation and infrastructure lag. Dependence on subsidies, uneven coverage of the minimum support prices (MSPs) across the states, and rising costs imply that most farmers still struggle. Critics argue that MSP benefits are concentrated in states like Punjab and Haryana. As is evident from the last cropping season, this propels the farmers from the neighbouring states to, sometimes illegally, cross the borders to sell their produce at MSPs. The situation is not normal.

The debate about farm incomes goes back and forth. NITI Aayog’s Chand categorically said in a speech in October 2025 that earnings experienced more than 10 per cent annual growth, “which is higher than the growth achieved in the manufacturing sector, and rest of the economy. In these ten years, the income of the agricultural producer has risen by 126 per cent.” This was challenged, and the Left-oriented All India Kisan Sabha (AIKS) rejected Chand’s conclusion. It stated that the “study is not a scholarly or evidence-based assessment, but a politically motivated document aimed at manufacturing a false narrative of agrarian prosperity.”

According to the farmers, Chand’s report relies heavily on National Account Statistics, which draws its “base from macro-level national accounts, and concepts such as ‘operating surplus’, which artificially inflate average farm incomes by conflating the earnings of corporates, agribusinesses, and large landholders with those of small and marginal farmers, who constitute over 85 per cent of India's farming households.” The report ignores the “continuing crisis of farmer suicides,” policy-driven distress due to “predatory import policies.” The surpluses in staples like rice and wheat is “perversely used to signal success, while ignoring the consequent price crashes, and lack of universal procurement and falsely claimed surplus.” 

A recent policy paper by Siraj Hussain, along with Seema Bathla, Anjani Kumar, and Navneet Kumar stated, “It is also a fact that India does not have regular and accurate estimates on farmers’ income. The only data source for making a detailed assessment on farm households’ (HHs) income is the NSS (National Sample Survey) decennial Situation Assessment Surveys (SASs) that began in 1961.” The paper estimated that the agricultural HHs earned INR 5,592 per month from various sources in 2002-03, which increased to INR 8,011 in 2012-13, and slowed down to INR 9,284 in 2018-19.

In terms of annual growth, the net real income grew impressively at 3.7 per cent during the first 10 years (2002 to 2012) under the study, and later decreased to 2.5 per cent during the second period (2012 to 2018). Thus, the average for the 18 years was a slightly higher, but more modest, 3.2 per cent per annum. This appears to be significantly below the Government’s claim that the growth was 10 per cent per year. More importantly, which can be seen as both a positive or negative development, the average share of the total income from the ‘crop sector’ declined. It remains close to 50 per cent of the total mainly because of the “increase in livestock income.”

Other factors are at work, which depress farm incomes. Inflation is a bummer, which explains why the earnings grew at less than five per cent between 2012 and 2018, and is “significantly below the rate needed to double (incomes).” An indication of lower earnings is evident from the fact that small and marginal farmers, and their families rely more on wages which, in many cases, “often exceed income from farming.” Schemes like the rural employment scheme serves as an excellent alternative to farming. Contrary to the aims and expectations, the number of marginal farmers, who own less than a hectare each, has increased, which makes farming unviable.

In the recent past, food items witnessed huge prices, although food inflation is down to a dribble today. One expects that the past high inflation may have helped boost farm incomes. However, a working paper by the central bank found that this is not so. In livestock (poultry and egg), 70-75 per cent of what the final buyer pays ends up in the pocket of the original producer. The figure is less than 60 per cent for poultry meat. It lies between 30-40 per cent in the case of vegetables such as tomato, onion, and potato. According to a media article, it is sad that the two segments, where the transfer is the lowest, meat and vegetables, are those that witness “significant demand from the consumers,” which forces the farmers to shift to them. Thus, even consumer price increases do not benefit them.

(The author has more than three decades of experience across print, TV, and digital media); views are personal