Why agriculture sector’s share in rural employment is declining

Around the previous 3-and-a-50 percent a long time, there has been a structural shift in the occupational alternative amid rural employees, specially rural agricultural personnel, with improvements in their occupational choices ranging from agriculture to non-agricultural sectors. According to the 38th Spherical (1983) of the National Sample Survey (NSS) report, close to 77 per cent of rural households rely on the agricultural sector to sustain their livelihoods.

Over the several years, rural households’ dependency on agriculture has declined to 50 for every cent as for every the latest round of the Periodic Labour Drive Survey (PLFS) for 2018-19. In addition, the agriculture sector’s contribution to nationwide GDP has declined from 34 per cent in 1983-84 to 16 for every cent in 2018-19. Likewise, agriculture sector’s contribution to GSDP (Gross State Domestic Product) has broadly followed the same pattern over the exact same interval.

Apart from contributing to the GSDP, the agricultural sector also plays an necessary purpose in building work options for the rural workforce. According to the 38th spherical of NSS and PLFS (2018-19) studies, the agricultural sector’s contribution to employment declined from 81 for every cent in 1983 to 58 for each cent in 2018.

This contrasts with rural non-agricultural work, which greater from 19 per cent to 42 for every cent through the same time period. In other text, agricultural work declined by 23 proportion factors, whilst work in the rural non-agricultural sector enhanced by the exact percentage points from 1983 to 2018.

Gender-intelligent work

A look at the gender-clever rural work displays that the share of male staff engaged in agricultural actions declined from 78 for every cent in 1983 to 53 for every cent in 2018, though the amount of feminine agricultural employment fell from 88 per cent to 71 for each cent in the very same period of time. So, the two male and feminine work in the rural agricultural sector followed the very same pattern in chosen States (see Desk).


On the other hand, workforce participation in rural non-agricultural sectors for male staff greater from 22 for every cent in 1983 to 47 per cent in 2018, thus registering an improve of 25 share factors. Together related lines, woman work in the rural non-agricultural sector little by little improved from 12 for every cent to 29 per cent around the exact time period.

What are the principal motives driving the decline in work share in the rural agricultural sector? In our belief, main inner things this sort of as insufficient community investment for agrarian improvement, inadequate access to institutional credit score, insufficient irrigation amenities, government’s weak agriculture-similar marketing policies, half-baked land reform coverage, and low return from agriculture are dependable for the drop in agricultural work.

Besides, external elements these as extreme financial liberalisation in the Indian overall economy and minimal import tariffs in agricultural solutions have also played a essential function in the declining share of work in the rural agriculture sector.

Exogenous shocks

Aside from the external and inside factors, exogenous shocks these as frequent droughts, floods and cyclones are also liable for the slipping employment share in the agricultural sector. These natural calamities cause substantial harm to crops, which in switch disincentivises rural workforce to just take-up farming.

Indian agricultural sector remains extremely vulnerable to regular flood disasters. In accordance to a report by the Central Water Commission, on an average India shed about ₹2,785 crore per year because of to crop injury relevant to flooding in the course of the interval 1980-2017. Recurrent floods not only have an impact on agricultural work but also boost poverty, inequality, and farmer distress.

This locating is validated by a 2020 short article revealed in Atmosphere, Progress and Sustainability, by Parida, Saini, and Roy Chowdhury, which confirms that damages owing to floods final result in a decrease in the financial growth of States. The lower economic growth, in flip, affects equally agricultural work and revenue of rural homes.

In addition, destruction thanks to floods also affects gender-sensible work in the rural agricultural sector. In rural India, the agriculture is a single of the major employment vendors for the feminine workforce. Any catastrophic events like floods end result in a reduction in income and work alternatives for the rural feminine workforce.

In 2020, the paper ‘Natural Disasters and Rural Labor Marketplaces: A Gender Analysis’, by Roy Chowdhury of the University of Utah, empirically confirms that damages owing to floods cut down work alternatives in rural agricultural sectors. The review additional shows that the reduction in occupation chances is a lot more for woman staff than for male workers. The achievable reason is that woman staff can not simply change from agricultural to non-agricultural occupations due to socio-financial and cultural limitations.

Way ahead

To mitigate the effect of floods on gender-wise employment in the rural agricultural sector, equally the Central and State governments should really devise a suited flood management coverage and put into action a revamped agricultural coverage. For example, the govt ought to make investments much more in flood command, irrigation, and disaster possibility reduction measures.

Also, escalating public investment decision for creating agricultural infrastructure, revamping agricultural advertising and marketing plan, delivering compulsory crop insurance policy, generating agricultural input subsidies commonly available, and rising MSPs for big crops are important.

These measures will encourage rural woman staff to have interaction in agricultural routines and minimise labour shift from agricultural to the rural non-agricultural sector. Also, the recent stimulus deal declared by the Centre for agriculture and allied sectors underneath Aatmanirbhar Bharat schemes can also produce employment alternatives in this sector.

Joyita Roy Chowdhury is Assistant Professor in Economics, FLAME University Prarthna Agarwal Goel is Assistant Professor in Economics, GGS Indraprastha College and Parul Bhardwaj, Impartial Researcher, New Delhi. Sights are own.