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Understanding Farm Incomes and Agri-Extension Services

Understanding Farm Incomes and Agri-Extension Services

We know that households depending on farm incomes earn much lesser than those depending on non- farm incomes. With average farm household income at INR 6500 per month, about 23% are below the poverty line, and over 50% of them are indebted. Agriculture today consumes large quantities of water and chemicals, using up precious natural resources and polluting our land air and water.  We also know that large quantities of food are wasted and so we have to grow much more than we actually consume. Without enrolling farmers into a future of profitable and sustainable agriculture, the fight against poverty, hunger and climate change will be lost before it starts.

Now the question is how do we approach this complex problem? Do we allow ourselves to turn the other way because the problem is so big and complex? Just like with any other complex problem, we break the problem down to understand how solutions can be found.

Understanding Farm Income

We need to first understand the basics of farmer income as well as its components to find solutions to increase farm incomes.  Then, it will be easier for various stakeholders to take up different parts of the problem.

Let us see how a farmer makes money. Like any other business, farmers produce crops using inputs such as seeds, fertilizers, pesticides and labor, and sell the output to buyers.

So basically, the income from agriculture can be expressed as:

Now to increase incomes, revenues need to be increased and costs need to be decreased. Area being constant, the factors that can be worked on are:

  1. Productivity (P)
  2. Price Realization (price)
  3. Quantity of input services and materials used (Q)
  4. Price per Unit of input services and materials (C1)
  5. Transaction cost of sale (C2)
  6. Cost of capital (C3)

Solutions to Improve Farm Incomes

There are solutions being designed for all the above factors that affect farm income.

  • New financial institutions and govt. schemes are coming up to provide easier access to capital for farmers.
  • Researchers are working to develop new inputs, seed varieties and agricultural practices to increase productivity.
  • New platforms that act like an Amazon for farmers: Agrostar, Kalgudi, etc. are coming up.
  • Individuals and Organizations are working on reducing the amount of labor required, by promoting mechanization
  • The Government, private Companies and farmer producer organizations are working on improving farmers’ market access as well as creating warehouses to store produce until they get a good price.
  • There are also companies working to help farmers sell at their gate, and sell at profitable prices.

And finally, if we want to achieve sustainable agriculture, changes must be brought in by the farmer at an individual level. These changes include:

  • New water saving technologies.
  • Better seed varieties.
  • Optimal pesticide usage
  • Improved farming methods and
  • Farm extension services

What is farm extension?

We need to bring the knowledge of these innovations/ changes/ solutions to the farmers and help them adopt whichever innovations they choose. The effectiveness of all of these is dependent on their being suitable to farmer needs, and the farmer adopting them. Both of this needs a communication channel between the farmers on one hand, and the researchers, govt agencies, startups and other companies on the other hand. This channel of taking research to farms is called extension. 

Collaboration between different stakeholders and an active extension platform are critical for improving farmers’ incomes and ensuring future food security.

Challenge of Agricultural Extension and Possible Solution

Taking the findings and learnings from laboratories and ensuring they get implemented in the farmers’ fields is the biggest challenge of agriculture extension.

How and when will the farmers use these technologies?   When they’re convinced that the alternative being proposed is better than what they already do.

How will they be convinced? When they see the technologies working, they will be convinced and will be encouraged to adopt newer techniques.

Actions speak louder than words. If they see a fellow farmer whom they trust adopt this technology and succeed in it. They would be more likely to adopt it themselves.

There are government departments dedicated to solve this problem, but there is one govt. extension professional for thousands of farmers. In this situation, most farmers get their advice from input dealers whose interest might not always be aligned with the farmers.  It is in the face of this problem that it was recognized; the govt. extension professionals need a lever to help them do their job.

If the thousands of farmers whom they served had representatives so that these professionals could then reach out to a hundred farmers chosen by their fellow farmers, and those hundred could then spread the technology to their fellow farmers.

This is what we’ve done for three years now with thousands of farmers, and have seen this work. Productivity has increased, input costs have gone down, and so has the quantity of chemicals used.

Based on this model, a rural livelihood programme MITRA, has extensively worked for three years with thousands of farmers and as a result was successfully able to increase productivity, reduce input cost and as well as quantity of chemical use.

Over a hundred million Indian farmers can improve their incomes and agriculture can be profitable, if interventions on extension are scaled up and supported by the society.

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