According to a study by SBI, the average income of farmers increased by 1.3 to 1.7 times between FY18 and FY22

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As the government strives to achieve its stated target of doubling farmers’ income by 2022-23, a study by India’s largest bank, SBI, shows that between the fiscal year 2017-18 and 2021- 22, the average income of farmers increased by 1.3 – 1.7 times across India, while in some crops such as soybeans in Maharashtra and cotton in Karnataka, incomes actually doubled over the of the same period.

The study, which comes just days after the Center showcased the success stories of farmers who managed to double their incomes over the past few years, also said that increased incomes for farmers growing cash crops have was higher than that of those growing non-cash crops. between FY18 and FY22.

The SBI study is based on primary data from its agricultural portfolio across states, which contains granular data on various agro-intensive branch crops and analyzes how farmers’ incomes have changed over the past five years.

“In principle, we used a well-distributed, well-represented and probabilistic sample to estimate the change in income from FY18 to FY22 for all segments of farmers, large, small and marginal. Our statistical inferences using ‘t-test’ and ‘Ftest’ as well as ‘Lorenz Curve‘ probing the increase in average income and the decrease in inequality validate our main conclusions,” the report states.

The SBI report added that income from related and non-agricultural activities increased by 1.4 to 1.8 times significantly, in line with the increase in farmers’ income over the same period.

“This confirms the trend according to the 77th National Sample Survey that farmers’ source of income has become increasingly diversified outside of crops,” the report said.

The Ashok Dalwai Committee on Doubling Farmers’ Income, set up by the central government in its 14-volume report published a few years ago, said that to double income from both farm and non-farm sources, it would have to increase by 10.4 percent. cent between 2015-16 and 2022-23 (the terminal year) in real terms (corrected for inflation) and not nominally.

He had estimated the average annual income of a farm household in 2015-16 at Rs 96,703, which is expected to rise to Rs 1,72,694 by 2022-23, the end of the current financial year.

The SBI report also sharply criticizes agricultural loan waivers announced by various states and the Center over the past few years, saying the write-offs have failed to bring respite to the subject matter, have sabotaged credit discipline in some geographies and made banks/FIs wary of additional lending.

“Essentially, (it’s) a ‘self-goal’ inflicted by the state on its subjects!” says the report.

He said that since 2014, out of about 37 million eligible farmers, only about 50% have received the amount of loan relief (through March 2022), although in some states more than 90% of farmers have received the debt relief amount.

The report also indicates that the minimum support price (MSP), increasingly aligned with market-linked pricing, has played a key role in securing better prices for farmers.


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MSP has, in many cases, led to the discovery of optimal prices, establishing price floor benchmarks for many crop varieties (currently 23) and incentivizing farmers to gradually switch to crops that have higher yield or yield. better value.

The report also praised the government’s Kisan Credit Card (KCC) scheme, but wanted some tweaks.

He said the KCC scheme, continuously improved and revamped by the government, has been instrumental in bringing a large number of farmers (currently about 73.7 million active KCCs) under a formal credit facility. at subsidized interest rates from institutional players.

However, current regulatory standards take too long for banks to renew and expand KCCs. If simplified, they could save a lot of time, which could then be reallocated to new loans.

The SBI estimated that banks use around 2.3 million man-days to renew KCC loans. This time could have been used for new loans to agriculture, if the standards had been simplified.

He suggested a livelihood credit card (LCC) encompassing a multipurpose loan covering all activities of a rural household to facilitate doing business.

“At least one million farmers could be targeted to start, (in a move) that would further invigorate rural demand,” the report said.

The study also called for state intervention to issue tenancy certificates to sharecroppers to bring them into the formal credit system.

He had estimated that there were 20-30 million landless or tenant farmers in India based on his analysis of PM-KISAN and KCC beneficiaries.

“There is a gap between 117.8 million beneficiaries of PM KISAN and 74 million farmers having KCCl,” the SBI report states.

Of the roughly 40 million remaining farmers, at least 20-30 million could be tenants/tenants/landless farmers, according to the SBI study.

The report also states that female-led Self-Help Group (SHG) NPAs, of which there are over 800,000 in the country, account for over 10% in India. Within this framework, some states of Uttar Pradesh, Haryana and Punjab have NPA ratios above 25%, while some like Andhra Pradesh have the lowest ratio of 0.8%.


SBI Study Highlights

  • Average farmer income increased 1.3 to 1.7 times between FY18 and FY22

  • In some crops like soybeans in Maharashtra and cotton in Karnataka, incomes doubled during this period

  • Non-farm income increased 1.4 to 1.8 times between FY18 and FY22

  • Incomes of farmers growing cash crops have grown faster than those growing non-cash crops

  • Farmer loan forgiveness is a states ‘personal goal’ as only 50% of farmers benefited from it

  • India could have 20 to 30 million sharecroppers

  • The KCC system should be modified to make it a Livelihood Credit Card (LCC)

  • Self-help groups have about 10% NPA across India

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