Part 2 of unit 2

Here are detailed pointers for each of the sections from the document "Estimates and Analysis of
Farm Income in India, 1983-84 to 2011-12" up to the 7th section titled "Post-2011-12 Scenario":

### 1. Backdrop

- *Farm Income as a Measure of Well-being*: The section begins by emphasizing that farm income is
a crucial indicator of farmers' well-being, highlighting the lack of reliable farm income data in India.

- *Bias Against Agriculture*: Discusses historical biases against the agricultural sector, citing studies
that show both favorable and unfavorable terms of trade for agriculture over different periods.

- *Income Disparities*: Notes the growing income disparity between agricultural and non-
agricultural sectors, contributing to agrarian distress and the migration away from farming.

### 2. Estimation Procedure

- *Income Calculation Methodology*: Describes the methodology used to calculate farm income,
distinguishing it from the broader agricultural sector income which includes earnings of hired farm
labor.

- *Data Sources and Calculation*: Details the data sources used, including GDP figures and labor
statistics, and the formula applied to derive net farm income by subtracting costs like capital
consumption and wages for hired labor.

- *Table of Variables*: Provides a table listing input costs, wage bills, and output values over several
years to illustrate the calculation of farm income.

### 3. Cost of Inputs, Wage Bill, and Farm Income

- *Economic Trends Over Time*: Analyzes trends from 1983-84 to 2011-12, showing significant
increases in input costs, wage bills, and agricultural output.

- *Real vs. Nominal Income*: Discusses the growth of nominal and real farm income, using the
Consumer Price Index for Agricultural Labourers (CPIAL) to adjust for inflation.

- *Income Growth Analysis*: Provides a detailed account of how farm income has grown in real
terms, supported by tabulated data showing income at current prices and adjusted for inflation.

### 4. Various Dimensions of Farm Income

- *Income Per Cultivator and Holding*: Examines changes in farm income per cultivator, per holding,
and per unit of net sown area, showing significant growth over the study period.

- *Wage Earnings*: Reports on the increase in wage earnings for agricultural laborers, reflecting
changes in labor productivity and wage rates.
- *Table of Income and Wages*: Includes a table that details real and current farm income per
cultivator, per holding, and per hectare, alongside wage earnings for laborers.

### 5. Farm Income, Agrarian Distress, and Farm Poverty

- *Income Disparities*: Focuses on the disparities between farm income and non-farm income,
showing that these have been a factor in ongoing agrarian distress.

- *Poverty Analysis*: Discusses the relationship between farm income and poverty, indicating that
many farmers earn just above the poverty line, and a significant portion could be at risk of poverty
without additional income sources.

- *Policy Implications*: Suggests that improving farm income is crucial for reducing agrarian distress
and improving the economic status of farmers.

### 6. Profitability of Farming

- *Profitability Over Time*: Analyzes the profitability of farming by comparing farm income to the
total value of agricultural inputs and the wage bill.

- *Investment Returns*: Shows that returns on investment in farming have generally been positive
and have improved over time, particularly after 1999-2000.

- *Economic Efficiency*: Discusses the economic efficiency of farming practices, supported by data
on the ratio of farm income to costs.

### 7. Post-2011-12 Scenario

- *Recent Challenges*: Describes the agricultural challenges post-2011-12, including poor monsoons
and unseasonal rains that affected crop outputs.

- *Economic Impact*: Discusses the economic impact of these challenges on farm income, with a
focus on the slowed growth in agricultural value added.

- *Future Outlook*: Raises concerns about the sustainability of farm income growth given recent
adversities and the need for continued policy support to address these challenges.