Diversifying income sources for rural households: Assessments from 70th round of NSSO

Mukta Naik on December 24th, 2014

The National Sample Survey Office (NSSO) has recently released, from its 70^th round, key indicators on the situation of agricultural households in India. The results of the ‘Situation Assessment Survey of Agricultural Households in India’ pertain to the crop year 2012-13. For the fraternity interested in migration issues, this could be an interesting dataset to look at.

Reports from member organisations working across India have attributed widespread seasonal migration as an outcome of rural poverty and agricultural distress. Certainly, the high figures of indebtedness of agricultural households in the survey point in the same direction. Currently, 52% of farming households are in debt as opposed to 48.6% in the 59^th round, which was the only previous time a similar assessment was done by the NSSO.

Of course, it must be pointed out that the differences in the results of the two rounds of the NSSO survey are partly explained by a change in the definition of the ‘agricultural household’. While the 59^th round, a farmer was one who possessed land and carried on agricultural activity on it, the 70^th round does not require an agricultural household to own the land; rather, at least one member of the family must be self-employed in agricultural activities (principal or subsidiary) and the family must have received over Rs. 3000 from annual agricultural produce.

While this definitional difference is an acknowledgement of the need to separate the ownership of land from the activity of farming; it is the relationship of income sources with land ownership that really tells the story of how much life in rural India is changing.

By and large, households with larger land holdings (over 0.4 hectares) reported agricultural cultivation as their primary source of income; however, 56% of those with small land holdings (less than 0.01 hectare) reported that their primary income source is wage/salary employment, while 23% primarily raised livestock for a living. Overall, the receipts from farm business, (cultivation and farming of animals) accounted for 60% of the average monthly income per agricultural in the survey year, while about 32% of the average monthly income came from wages/salary. The average farm income for rural household is less than Rs. 6,500 per month from all sources of income. By my interpretation, the data appears to support the observation by several NGOs and researchers that migration is a livelihood diversification strategy for families with little (or no) land.

Of course, the survey does not tell us where villagers find non-farm employment. Other datasets as well as field research would suggest that migrants find wage work in a variety of places primarily through networks—in the nearest town or district, or in a brick kiln or construction site far away. This is not to suggest that migration is necessarily about the shift from farm to non-farm employment. This survey did not include those who worked as agricultural labourers and this makes it difficult to use this data to shed light on seasonal migration in a holistic manner.

Mukta Naik is Senior Research Associate at the Centre for Policy Research, New Delhi