2
Department of Economic Analysis and Research
Rural Pulse
Issue - VI, November - December 2014
NABARD
increase in the production and yield. Total foodgrains have,
nevertheless, witnessed decline in average annual growth
rate of both production and yield. Sluggish yield and output
growth in agriculture have been associated with relatively
low levels of investment compared with other sectors of
the economy.
households in the lower size classes of land possessed
were mostly dependent on wage/ salary employment
than farm business (cultivation and farming of animals) for
their income. For the households belonging to the lowest
size class, farming of animals fetched more income than
cultivation. Percentage share of income from cultivation/
farm business in the average monthly income increased
with increase in land possession. Share of income from non-
farm business in the average monthly income decreased
with increase in land size. Similarly net investment in
productive assets per agricultural household increased with
increase in land size. Further, net monthly income (farm
and non-farm) in respect of size classes up to 1 ha was
negative. However, net income increased steadily with the
increase in size class. Foster and Rosenzweig
1
observed
that small-scale farming is inefficient in India. Strategies
for Indian agriculture and smallholding households should
include reducing the inequality in land distribution and
promoting off-farm work in the rural areas itself. The strategy
of improving the crop land-man ratio by facilitating migration
from rural India has not worked. The lives of smallholding
families can be improved only by building on their higher per
acre agricultural productivity and by promoting off-farm rural
employment
2
.
Enhancing Farm Productivity and Market Access for
Sustainable Agriculture
Stagnation in productivity improvement has been observed
in agricultural crops in India due to the following factors:
(i) decline in farm size and income; (ii) depleting natural
resources base; (iii) increasing input costs, and adverse
economics of farming; (iv) deficiency of micronutrients in
the soil and deteriorating soil health; (v) inadequate post-
harvest technology; (vi) uncertain market prospects; and
(vii) high indebtedness of farmers. Sustainable agriculture,
to a great extent, depends on the following factors:
• Quality Seeds
It is estimated that quality of seed accounts for 20-25 per
cent of productivity (State of Indian Agriculture 2012-13).
Hence timely availability of quality seeds at affordable
Table - 2
Changes in the Share of Smallholders in Number and Area of
Operational Holdings at All India Level (%)
Year
Share in Number of
Landholdings
Share in
Operational Area
Marginal
(<1 ha)
Small
(1-2 ha)
Sub-total
(<2 ha)
Marginal
(<1 ha)
Small
(1-2 ha)
Sub-total
(<2 ha)
1970-71 51
19
70
9
12
21
2000-01 63
19
82
19
20
39
2005-06 65
18
83
20
21
41
2010-11 67
18
85
22
20
42
Source: Agriculture Census 2010-11, Department of Agriculture and
Cooperation, Ministry of Agriculture, Government of India, 2014
Table – 3 (a)
Average monthly income from different sources, consumption expenditure and net investment in productive assets per agricultural
household during July 2012- June 2013 for each size class of land possessed
(Amount in
`
)
Size class of land
possessed (ha.)
Income from wages/
salary
Net receipt from cul-
tivation
Net receipt from
farming of animals
Net receipt from
nonfarm business
Total income
<0.01
2902
30
1181
447
4561
0.01 - 0.40
2386
687
621
459
4152
0.41 - 1.00
2011
2145
629
462
5247
1.01 - 2.00
1728
4209
818
593
7348
2.01 - 4.00
1657
7359
1161
554
10730
4.01 - 10.00
2031
15243
1501
861
19637
10.00+
1311
35685
2622
1770
41388
All size
2071
3081
763
512
6426
Source: Key Indicators of Situation of Agricultural Households in India, NSS 70th Round (January – December 2013), NSSO, December 2014
Farm income vis-à-vis Farm Size
The average size of operational holding in India has
declined from 1.23 ha in 2005-06 to 1.15 ha in 2010-11.
Small and marginal holdings constituted 85 per cent of
total holdings in 2010-11 compared to 83 per cent in 2005-
06 and 70 per cent in 1970-71 (Table 2).
There has been an intense debate in India about the
relationship between farm size and productivity. Studies
have revealed that crop productivity per unit of land declined
with an increase in farm size. However, while smallholdings
in Indian agriculture still exhibit higher productivity than large
holdings, the former show lower per capita productivity,
which leads to widespread incidence of poverty.
Tables – 3 (a) and (b), based on the Key Indicators of
Situation of Agricultural Households in India (NSS 70th
Round) display average monthly income from different
sources, total consumption expenditure, net income, and net
investment in productive assets per agricultural household
during the agricultural year July 2012 - June 2013 for each
size class of land possessed. It is observed that agricultural
1
Foster,Andew D and Mark R Rosenzweig (2010): “Is There Surplus Labour in Rural India?” Centre Discussion Paper No 991, Economic Growth Centre, Yale University.
2
Chand, R., P A Lakshmi Prasanna and Aruna Singh (2011), “Farm Size and Productivity: Understanding the Strengths of Smallholders and Improving their
Livelihoods”, Economic & Political Weekly June 25, 2011 Vol. XLVI Nos. 26 & 27
