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Agrarian Institutions and Vulnerability of Agricultural Households in the period of Doubling Farmers’ Income: A state level analysis of India

Dr. Chitrasen Bhue (PhD in Economics from University of Hyderabad) is Assistant Professor at the Department of Economics, Kalahandi University, Bhawanipatna, Odisha

Location : LH3
It is hard to ignore the plight of the Indian farming class, from pre-independence to till date. Even after continuous policy efforts for decades, the socio-economic distress of agricultural households is never-ending, and growing widely in some spheres like earning sustainable income, access to education, better health care etc. Agricultural planning and policies have been successful in turning India into a major exporter of food grains from a net importer one. But, the remarkable growth in agricultural production has failed to uplift the life and livelihood of major snick of agricultural households. About three-fourths of agricultural households are unable to earn their usual monthly consumption expenditure. The usual monthly consumption deficit along with unforeseen expenses is piling up the debt of agricultural households which causes farmer suicide.

The agricultural households are not a homogenous category. The demographic features of the agricultural households based on land possession, and regions show a huge disparity among them. The large land-owning farmers earn approximately seven times higher than the small and marginal farmers. The average monthly income of the top two states in 2018-19 was equal to the average monthly income of the bottom seven states. The recent policy emphasis of the government on ‘Doubling Farmer’s Income’ is a welcome move. Despite the various policy efforts, why do the agrarian households face different forms of vulnerability in the period of doubling farmers’ income? Why do some states perform better than the other states? Does the current price policy (MSP) address the vulnerability?

There could be multiple explanations. The mainstream ideas on agrarian production and especially agricultural marketing have extensively relied on the price mechanism (Demand and Supply Interaction, Perfect Competition) to understand the marketing efficiency in providing decent income to the farmers. It ignores the social relation of production and exchange. How is agrarian performance and farmers’ welfare highly connected to the modes of production and organization of agrarian market is less discussed. The present study uses the theoretical framework of New Institutional Economics to understand the social relation of production and marketing and its impact on agrarian performance. The study uses the unit level data of various land and livestock holding survey, and situation assessment survey of National Sample Survey Organization to identify the institutional indicators of modes of production and marketing in Indian agriculture.

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