Changing Agricultural Labour Market and Its Effects on Farm Economy in India

S.K. Srivastava, Jaspal Singh, Nalini Ranjan Kumar, N.P. Singh and Nasim Ahmad

Indian Journal of Agricultural Economics, 2020, vol. Volume 75, issue Number 4

Abstract: The paper presents long-run changes in agricultural labour market and its effects on farm economy. Further, the effect of COVID-19 led disequilibrium in labour market on cost of cultivation of paddy and wheat has been quantified. The evidence from both census and NSSO surveys point out rising employment diversification towards non-farm sectors. Census estimates of agricultural labour are higher than NSSO estimates which is partly explained by adoption of different ‘minor’ time criteria by these sources to identify marginal/subsidiary labour. Census based evidences suggest distress-led transition of cultivators to agricultural labours, whereas NSSO surveys based evidences refute such trends and point out towards development-led employment diversification wherein both cultivators and agricultural labours move towards more productive non-farm sectors. The recent NSSO survey (2017-18) reveals deceleration in withdrawal of cultivators and acceleration in withdrawal of agricultural labours. Successive cost of cultivation surveys also report a consistent decline in labour use in crop cultivation and therefore externally validate the trends from NSSO surveys. However, despite reduction in labour use, labour cost has increased. Due to inelastic demand for labour, increase in wages could not bring proportionate decrease in labour use and resulted in increase in labour cost in crop cultivation. Short-term disequilibrium in labour supply caused due to COVID-19 led lockdown increased cost A1+FL by 1.1 per cent in wheat and 4.6 per cent in paddy. However, farmers in Bihar did not witness any benefit on account of increased labour supply due to large scale reverse migration.

Keywords: Labor; and; Human; Capital (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:inijae:345141

DOI: 10.22004/ag.econ.345141

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