‘Raising incomes of farmers is a moral commitment’: Madhura Swaminathan

Delivering Deshmukh Memorial Lecture in Delhi, the noted economist calls for reforms to boost farmer incomes and recognise women’s labour.

(Left to right) Nitya Nanda, Indira Hirway, Shyam Saran, Madhura Swaminathan, Biswajit Dhar; Release the India Social Development Report 2023 at the Durgabai Deshmukh Memorial Lecture 2024 in Delhi | Photo Credit: Vitasta Kaul

“Sixty years after the Green Revolution, Indian farming is at a critical juncture with the rising arguments against subsidies and use of modern agricultural techniques,” said noted economist Madhura Swaminathan, while delivering the Durgabai Deshmukh Memorial lecture in Delhi on July 15.

Professor and Head of the Economic Analysis Unit, Indian Statistical Institute, Bengaluru, Madhura Swaminathan noted that only some farmers prosper, while most struggle to generate sufficient income. Though farming remains unprofitable for many, it continues to be a crucial production component. In her lecture, “The Agrarian Economy: Perceptions versus Reality”, Madhura Swaminathan discussed the state and importance of minimum support prices (MSPs) and other subsidies for Indian farmers. “Raising incomes of farmers is a moral commitment,” she said, noting that 90 per cent of rural households still participate in agriculture. 

Madhura Swaminathan pointed out that agriculture has experienced a profit squeeze over the years, with production costs rising faster than returns. “The recently released MSP does not cover the in situ cost of production plus an additional 50 per cent, and the prices received by farmers are often less than the MSP,” she said. Referring to the Situation Assessment Survey of Farmers, conducted in 2012-13 for the first time since Independence, Swaminathan said that average monthly farmer income rose from Rs 6,000 to Rs 10,000 in six years, a mere 18 per cent increase when accounting for inflation. Small farmers with only two to four hectares of land saw their incomes decrease by four per cent in real terms from 2013 to 2018. “Average income of cultivators is low and declining in real terms; the share of farming income is reducing in the total household income,” Madhura Swaminathan observed. She repealed that Dalit tenant farmers earn the least, an issue consistently overlooked in policy discussions. 

Madhura Swaminathan suggested basing subsidies on production costs. She compared India’s subsidies to those of the US, which spent $118 billion for two million farmers in 2017. In contrast, India’s subsidies totalled $57 billion in 2018, serving many more farmers. The Organisation for Economic Co-operation and Development (OECD) reports that net support for Indian farmers has been negative for two decades due to agricultural taxation. Swaminathan noted that only consumers benefit from agricultural subsidies. “A large country like India should be mostly self-sufficient, especially if you want a diversified food basket,” she said. However, she added, “according to NITI Aayog, we will need more incentives for farmers to not fall short of the demand”. Swaminathan stressed the need to diversify crop production and use new scientific methods, including climate-friendly gene-edited crops, to achieve a self-sufficient, diverse food basket. 

Madhura Swaminathan | Photo Credit: The Hindu

Addressing women’s role in agriculture, Swaminathan said, “In wage households in rural areas, women’s participation is very high, almost equal to that of men”. She pointed out that labour force surveys often undercount women due to their involvement in household chores and childcare. Women primarily work in unrecognised allied activities like livestock. The gender wage gap is significant: women must spend 70 to 100 per cent of their daily earnings on a healthy diet, compared to 25 to 60 per cent for men. 

“Although no substantial policy has been recommended to increase the incentives for rural women farmers, raising minimum support price for women will be a positive step,” she told Frontline. Swaminathan noted that women in agriculture mainly rear livestock, working an average of 720 hours yearly. She argued they should receive fair compensation and insurance. “Increasing the income of rural women cannot be termed as subsidies. The first step to increase women’s participation is recognition of their work,” she said. 

Madhura Swaminathan advocated for making MSP a legally binding statutory price to establish a floor price that raises incomes. She also called for increased agricultural spending, focusing on research and development, public extension, and applying the latest practices and technologies. 

The annual lecture, held on the birthday of freedom fighter and activist Durgabai Deshmukh, features distinguished experts discussing social development topics. The Council for Social Development collaborated on the event, which included the release of the India Social Development Report 2023 - “Women’s Contribution in Economy,” edited by Indira Hirway, Director and Professor of Economics, Centre for Development Alternatives (CFDA), Ahmedabad. 

Discussing the report, Hirway said, “Despite efforts being taken for the development of all other areas, gender development remains the same in India.” She identified two root causes of persistent gender inequality: patriarchy in social structure and the economic structure excluding women’s unpaid labour from production boundaries. Hirway explained that current macroeconomic frameworks, like labour market theory, fail to account for women’s unpaid labour. She noted that patriarchy is most prevalent in middle and lower-middle classes and least in tribal communities. Hirway highlighted the irony that women who cook often face the most malnutrition. “The government does not comprehensively address the root cause of women’s disempowerment, that is the unequal burden of unpaid labour,” she said, adding that only women’s collective strength can bring us closer to gender equality. She stressed the importance of creating “new macroeconomics” to include women’s work in the mainstream economic sphere.