Agriculture defies pandemic pains with high growth, new jobs

The agricultural sector has not only remained insulated from the contemporary economic disruptions, but has registered better growth than other occupation groups. The segment saw better employment figures and higher consumer sentiments than most over the past three years, says a report by Centre for Monitoring Indian Economy.

Labour statistics from CMIE’s Consumer Pyramids Household Survey saw an estimated 4.5 million increase in employment in the agriculture sector during fiscal 2021-22. While total employment fell by 21.7 million during 2020-21, agriculture provided employment to 3.4 million. In 2019-20, agriculture employed an additional 3.1 million.

“Over the past three years, therefore, agriculture has added 11 million jobs while the rest of the economy lost 15 million,” the CMIE report said.

Workers migrate back to their villages when they fail to find jobs in non-farm sectors. These migrants then join their families and farmers and claim to be employed in farming. This additional labour does not add much to output and is therefore considered to be mostly disguised unemployment.

“This narrative of disguised unemployment needs to be qualified. The agricultural sector has done well during the past three years and therefore, ceteris paribus, it had the ability to absorb additional labour fruitfully,” CMIE noted.

The primary sector also saw growth during the last three years, despite the pandemic-driven difficulties. In 2019-20, agriculture grew 5.5% while the non-agricultural sectors grew only 3.5%. In 2020-21, amid the worst of the pandemic, agriculture grew 3.3% even as the rest of the economy declined 6.3%. In 2021-22, while the rest of the economy focussed on recovering from its deep fall, agriculture continued to grow by 3.3%.

Agricultural prices have remained elevated during this time as well. The wholesale price index for primary food articles was 25-30% higher than the overall WPI in the past three years. Farmers reaped the benefits of rising prices for their bumper crops and have also benefitted from favourable terms of trade.

“It is therefore logical to expect labour to move to agriculture. Agriculture was not just a safe haven, it was also a prosperous one,” CMIE said.

The sentiments among agricultural workers also remained positive. In March 2022, the index of consumer sentiments for farmers was 18.1% higher than a year ago. This is not only outdid the 15.4 per cent increase in the overall index, but also remained well above the next-best performance of 16.1% increase for business persons. A year ago, in March 2021 when consumer sentiments of all groups were reeling under the effect of the second wave of Covid-19, the index for farmers was the least affected even though it was down.

“The index of consumer sentiments for farmers in March 2022 was 21% higher than the overall index of consumer sentiments. It was 25.5% higher than the index for the next-best index which was for business persons. Farmers express better current and prospective sentiments compared to all other broad occupation groups,” CMIE noted.

“In March 2022, 14.9% of farmer-households said that their incomes were better than they were a year ago, 23.2% said their incomes were worse off the rest said it was the same as a year ago. Similar proportions apply to expectations of household incomes a year into the future,” it added.

Buoyed by prospects of a bumper wheat crop, guarantee of government procurement and two-fold rise in global prices compared to last year are likely to keep farmers’ sentiments upbeat. This trend can be seen in the steep rise in decision to buy consumer durables, which has been growing since May 2021.

“But, early data for April seem to indicate a little trouble. The index of consumer sentiments dropped by 7.6 per cent between the week ended March 27 and the latest week that ended on April 17. The rural index dropped by 10.3 per cent. In a couple of weeks we will gain better insights to know what has changed,” CMIE stated.