Economy
Why the increase in farm worker population is a worry
Summary
The sharp jump in the number of agricultural workers is happening when rural wages are not consistently keeping pace with the higher cost of living and agricultural productivity is low.
Between 2017-18 and 2023-24, the number of Indians working in agriculture rose by 68 million. As Himanshu, an associate professor at the Jawaharlal Nehru University, pointed out in a recent Mint column, this is a reversal of the trend between 2004-05 and 2017-18, when this number declined by 66 million. The backdrop of erratic wages and declining productivity makes this particularly worrying.
As economies grow and get richer, the share of agriculture in both economic output and workforce tends to decline. This has been seen across the world since the industrial revolution in the 18th century. In India, while farms’ share in gross domestic product (GDP) declined steadily over decades, the pace of decline in the share of agricultural workers in the workforce was slower. This trend has now reversed and worse, gathered pace.
Also Read: Data dive: What govt report reveals about jobs, wages, and work hours
The bulk of this increase has come from states that are among the poorest economically and have large agricultural populations, such as Uttar Pradesh, Bihar and Madhya Pradesh. Further, almost this entire increase has been driven by women workers.
Many analysts have attributed this increase to covid-19, when workers desperate to find employment to support themselves returned to family farms. This trend was expected to reverse after covid lockdowns ended and the economy returned to ‘normal’. That the agricultural workforce has increased by an estimated 25 million in 2023-24 alone, when GDP grew by 8.2%, is deeply worrying. This is because workers earn much less in agriculture, a sector where worker productivity also trails the national average.
Women in the fields
While the estimated number of men employed in agriculture rose by just 1.4 million between 2017-18 and 2023-24, the number of women soared by 66.6 million. As a result, the share of rural females working in agriculture rose from 12.8% in 2017-18 to 26.8% in 2023-24. Over the same period, the share of rural males working in agriculture remained around 27-28%. Thus, the structural reversal seen in the Indian workforce is almost entirely driven by more women working in the fields.
Also Read: India’s jobs crisis: How dreams of rural youth outpace the labour market
There are two components to this. First, the proportion of the female population in the workforce has increased, almost doubling from 19% to 35% in rural areas. Since 2017-18, even women who were not in the paid workforce (though they may have been doing unpaid domestic labour) rose sharply. Further, the share of rural working women, who are employed in agriculture has risen from 73% to 77%.
Stagnant wages
However, female agricultural workers earned less than their male counterparts. According to government data for 2023-24, women working as casual labourers in agriculture earned ₹282 per day, compared with ₹376 for male workers. Overall, the plight of rural workers is not good. Hopes that rural wages would recover, in real terms, after the pandemic and economic recovery have not been borne out.
Also Read: To generate jobs, India should consider a jobs-linked incentive scheme
In rural areas, both agricultural and non-agricultural workers are struggling to see their wages consistently keep pace with the increased cost of living. The government’s labour bureau collects data on different types of rural labour, for men only, on a monthly basis. Year-on-year change in this data for rural male workers for ploughing (representative of agricultural work) has trailed the cost of living for 13 of the 39 months since June 2021. For carpentry (representative of non-agricultural work), it has trailed for 26 of 39 months.
Falling productivity
From the point of view of the economy as a whole, a sharp increase in employment in agriculture is something to be wary of. This is because real productivity—the average value of output produced by a worker in a year, adjusted for inflation—is far lower in agriculture than in other sectors. In 2023-24, productivity in the services and manufacturing sectors was 4.3 times and 3 times that of agriculture, respectively.
Thus, in a healthy economy, workers should be able to shift from agriculture to manufacturing or services. The fact that the reverse is happening in India and that wages in agriculture have remained stagnant for a long period of time means that a large proportion of the labour force in India is effectively ‘trapped’ in agriculture. They would move out to other types of work, but a lack of opportunities elsewhere means they cannot.
www.howindialives.com is a database and search engine for public data.
