Farm to non-farm: Trials in transition

Deccan Herald, March 23, 2015

By George Cheriyan and Madhu Sudan Sharma

Everyday, about 2,300 farmers are quitting farming (census of 2011) and opting for more non-farm sector

The agriculture sector contributes nearly 13.9 per cent (2013-14) of GDP and gives gainful employment to nearly 232 million people in India. With about 52 per cent share, agriculture sector is still largest employer in India’s economy; however, it has become a soaked and motionless sector in terms of new opportunities due to stagnation and serious agrarian crisis.

Income from farm livelihoods is no longer sufficient for a household, especially for smaller and marginal farmers, who make up 85 percent of farm holdings. As a result, farmers are disheartened and on a daily basis around 2,300 farmers are quitting farming (census of 2011) and opting for more and more non-farm sector. The non-farm sector is much more vibrant and remunerative without much risk and offers better wages and social mobility for lower castes to move out of agricultural labour.

It is widely witnessed that as economy grows, the labour force shifts from farm to non-farm sector and this migration is determined by the total factor productivity of both the sectors. In rural India, the transition from farm to non-farm, industry or services have been rapid over the past decade.

Around 70 per cent of all manufacturing jobs were created in rural areas and as a result, 55 per cent of India’s GDP from manufacturing comes from rural India. One third of the rural work force and 43 per cent of rural households rely on non-farm employment as their major source of income and six out of 10 new jobs (2010) are in this sector: in services, transportation and construction.

Much of the incremental job creation in manufacturing seems to be in construction and in services including trade (retail/wholesale) and community services. The rate of the casual wagers (66 per cent) and self-employment (50 per cent) has increased substantially in the last two decades and two out of three jobs in this sector are in the construction sector.

The service sector is also a potent one which contributes around 69 per cent of GDP in India and provides around 142 million people a gainful employment. About 337 million (2010) rural adults are working in rural non-farm sector (RNFS) which narrows down the gap of wages in casual and agriculture sub sectors in particular and among male and female in general.

Considering the importance of the RNFS and to have exchange of related experiences among the states, the Consumer Unity and Trust Society (CUTS), a Jaipur-based research and advocacy group, implemented the I3S intervention-supported by the UNDP in the four states, Rajasthan, Orissa, Karnataka and Assam. This is to research the rural non-farm livelihood sector and to document successful and not so successful practices under selected centrally and state sponsored schemes and programmes.

The main RNFS schemes focused were Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), rural development programmes, State Institutes of Rural Development (SIRDs), NABARD and respective states’ cluster based textile, manufacturing or artisans’ related programmes.

Lack of govt support

Central and state governments, banks, research and trainings institutes and NGOs are trying their level best to support this sector but their efforts are proving insufficient. Experts say the challenges are lack of government support in research in art and craft and other allied sectors, lack of entrepreneurship development training programmes, existence of middlemen and contractors in the value chain, poor public investment, rising cost of raw materials, competition of handloom sector with power looms sector, lack of provision of Common Facility Centres (CFCs) for business processes, non-expansion traditional arts and crafts into non-traditional castes and communities etc.

More credit support is required for traditional artisans and craftsman. Technological usage in the value chain by introducing innovations has to ensure, including skill development and enhancement by the public agencies, that this whole sector can diversify and be made self-reliant and sustainable.

The states should take this as a priority sector, with a much focused and integrated approach. There is also a need to galvanise the National Rural Livelihood Mission (NRLM) and bundling it with the good work done in earlier livelihood schemes. The existing cluster development programmes of department of industries needs to be strengthened on one hand and on the other, convergence in the entire line departments should be ensured for better coordination and greater outputs.

The younger generation is not adopting the traditional arts and crafts as their livelihoods option. They are rather opting out for service sector and therefore, this whole sector needs to be turned into a remunerative one. This can be achieved by providing more and more workplace facilities, initiating traditional skill building programmes.

This needs the involvement of artisans and craftsmen, creating direct market linkages using online techniques and platforms and providing new technologies and machines so that the rural non-farm sector can be made a sustainable livelihood option especially for the youth who need jobs and employment in rural areas.

(Cheriyan is Director and Sharma is Senior Project Coordinator, CUTS International, Jaipur)

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