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‘AGRI PROFIT GROWTH MAY NOT AID RURAL DEMAND’

Focus: GS-III Agriculture, Indian Economy

Introduction

  • Agriculture is one of the few bright spots in an economy ravaged by COVID-19, with good rains expected to boost production and profits, especially in the paddy crop.
  • However, economists said individual farmers are unlikely to see any hike in their own income.

Arguments supporting why the income of farmers won’t increase

  • Reverse migration due to COVID-19 may have resulted in the number of people employed in the agriculture sector this summer rising by up to 16% over last year’s overall farm mployment, according to data from the Centre for Monitoring Indian Economy.
  • As a result, despite a hike in overall profits, per capita income may see a dip
  • Because of the COVID lockdown, large numbers of people have gone back to rural areas, and apart from MGNREGA, there is not much work to be had apart from agriculture.
  • This means, even if there is an increase in farm profits, it will not help in reviving rural demand, as too many people are dependent on farm income this year.

CMIE data shows that 111.3 million people declared their occupation as farming in 2019-20, and by March 2020, this had increased to 117 million, shooting up to 130 million in June.

-Source: The Hindu

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