Photo: Priyanka Parashar/Mint
Photo: Priyanka Parashar/Mint

The stress in agricultural incomes

The latest data on two widely considered corporate barometers of rural demand point to stress in agricultural incomes

The latest data on two widely considered corporate barometers of rural demand—Mahindra’s tractor sales and Hindustan Unilever’s overall performance—point to stress in agricultural incomes. Wage increases on the farm, and opportunities to earn, are flat or falling. As are prices of agricultural and allied products, both in the domestic and international market.

Lower rural wage increases and opportunities…

Incomes of agricultural labourers are under pressure. The rate of increase in rural wages for all agricultural occupations has dropped steeply from last year’s levels. And the rural employment guarantee scheme, a safety net of sorts for rural labour, appears to be seeing a pullback: between April 2013 and December 2014, our period under study, unmet work demand is the highest and expenditure levels the lowest.

…and lower prices of agri products...

Even the income of farmers is under pressure. The increase in domestic prices of key crops in 2014 was lower than in the previous two years. Realizations are dropping even in the export markets, the effect of which tends to be felt in the minimum prices the government sets for farmers in the domestic market.

…are leading to flat consumer demand

Lower farm incomes are putting pressure on sales of products that are closely tied to rural disposable incomes, impacting corporate revenues and profitability.

Source: Labour Bureau; MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) dashboard; www.eaindustry.nic.in; Food and Agriculture Organization (FAO); Directorate General of Commercial Intelligence and Statistics, Kolkata; Mahindra website; Hindustan Unilever quarterly results

howindialives.com is a Delhi-based start-up that is developing a search engine for public data to make it more accessible to decision-makers.

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