Workers Are Moving Off Indian Farms But Where Are They Going?

Context: An analysis of the changing nature of agricultural employment in India over the decades.

Trends in India's agricultural employment: Based on Employment and Unemployment Survey, 2004-05, and the Periodic Labour Force Survey, 2018-19.

• Agriculture and allied sectors contribution: 18% of Indian economy and 40% of employment.
• Decline of young people on farm:
  • Reduction in prime working-age (20-59 years) Indians engaged in agriculture - their share falling to 23.3% in 2018-19 from 40% in 2004-05.
  • In rural India, one in three prime working-age adults is employed in the agri-sector.
  • This has led to a shortage of labour and a rise in agricultural workers' median age to 40 years in 2018-19 (35 in 2004-05).
  • Ageing agriculture workforce would necessitate faster mechanization of Indian agriculture, but fragmented farm sizes may pose a problem.
• Wide regional variations in employment: While only 8.5% of Kerala’s prime working-age population worked in agriculture in 2018-19, down from 20.3% in 2004-05, Madhya Pradesh had an estimated 35.3%, down from 51.7% in 2004-05.
  • Lower reliance on agricultural employment reflects higher farm productivity and incomes and allow women to exit paid farm work.
  • E.g. In Punjab and Haryana, less than 20% of prime-age adults in rural areas are involved in agriculture, while In Karnataka, Maharashtra and Gujarat, it is between 40% and 45%.
  • Thus, higher levels of reliance on-farm employment would point to insufficient non-farm jobs.
• Decline in farm employment is not reflected in the rise in non-farm jobs: Rather, it is reflected in an increase in the share of prime adults leaving the labour market.
  • Increase in population leaving paid employment, mainly women, is seen in relatively prosperous states, Gujarat, Haryana and Karnatakas
• Impact of rising education: Among young adults, a reduction in agricultural employment share has been accompanied by a rise in those who report being in education (13.4% in 2018-19).
  • Unemployment among the educated could rise further if India’s pace of productive non-farm job creation does not improve.