That less than 58 per cent of rural households in India engage in farming may seem surprising. But as data from a recent National Sample Survey Office report shows, even so-called agricultural households — which have at least one family member employed in farming — derive over 40 per cent of their average monthly incomes from non-farming sources. These findings, based on a nationwide survey for the 2012-13 crop year, only confirm what some market analysts have highlighted: A Credit Suisse report in 2012 estimated that the share of agriculture per se in rural GDP has dropped to roughly a quarter, from almost half at the start of this century. In other words, while agriculture may be 95 per cent or more rural, rural is becoming less and less agricultural.
This growing urbanisation of the rural should be welcomed for the simple fact that agriculture cannot support the 69 per cent Indians living in rural areas (the official definition of “rural” is problematic, but that is a separate point). Growing fragmentation of holdings has led to farming becoming unviable in terms of employing entire households. Indeed, agriculture’s own future lies in moving people away from farms, so as to ensure the minimum viability of holdings that makes it worthwhile to invest in mechanisation and other yield-enhancing technologies. Farming, like any other profession, needs to reap the gains from specialisation and division of labour. Ultimately, only those interested in and good at agriculture need to be in this business. But that calls for creating more non-farm jobs in the countryside and further delinking rural livelihoods from agriculture.
