The latest data from the National Bank for Agriculture and Rural Development (Nabard) All India Rural Financial Inclusion Survey 2021-22 shows a wide disparity in the average monthly income of agricultural households. While Punjab, Haryana and Kerala feature at the top of the list, Bihar, Odisha and Jharkhand are relegated to the bottom.

In Punjab, the average monthly income of an agricultural household increased from ₹18,059 in 2012-13 to ₹31,433 in 2021-22. Haryana’s average income rose from ₹14,434 ₹25,665, while that of Kerala grew from ₹11,888 to ₹22,757 during the same period.

Below national average

Agricultural households in 13 States logged an average monthly income below the national average of ₹13,661. In Bihar, this stood at ₹9,252 in 2021-22; ₹9,290 in Odisha; and ₹9,787 in Jharkhand.

Maya Kant Awasthi, who teaches Food and Agribusiness Management at IIM Lucknow, explains, “There is a clear disparity in land-holding patterns across these States, with small land holdings often becoming non-viable, leading to a low marketing surplus. This also hampers productivity, and high transportation costs add further challenges, as small landholders often cannot afford them, contributing to their low income.”

According to the Indian Council for Agriculture Research review paper, “Approximately 80 per cent of the low-income marginal farmers are concentrated in the eastern (58 per cent) and western (21 per cent) regions due to factors like under-investment in agricultural research, poor electricity, markets and roads infrastructure, under-development of institutions like credit, extension, insurance etc.”

The National Sample Survey Organisation Situation Assessment Survey shows that out of the 18.9 crore rural households in India, 49 per cent are agricultural households.

Non-agricultural households fare worse

However, the average monthly income of non-agricultural households in rural areas was lower at ₹11,438 in 2021-22, compared to ₹13,661 for agricultural households. A similar trend was observed in the 2016-17 survey, with non-agricultural households averaging ₹7,269 and agricultural households at ₹8,931.

Richer agricultural households tend to have higher surplus from their monthly income after consumption expenditure. For households with more than 2 hectares of land (large farms), the average monthly surplus is ₹7,051. For those with 1.01 - 2 hectares of land (medium farms), the surplus is ₹3,835, with the surplus decreasing as land-holding size decreases.

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