Though extremely unstable, agricultural growth has far outpaced population growth in recent years; the supply of agricultural goods per head has risen. The proportion of population dependent on agriculture has been falling; so goods produced per agricultural family have been rising even faster. Yet there is news every so often of farmers killing themselves or burning buses. Are they too demanding? Are their expectations outrunning their fortunes?

According to National Sample Survey, there were 156 million families in villages in 2013; 90 million were doing farming. In other words, less than 3 rural families out of 5 were actually farming. The proportion was just 27 per cent in Kerala, 35 per cent in Tamil Nadu, and 41 per cent in Andhra; over a half of the villagers in these southern states were doing something else. In Rajasthan, UP and MP, on the other hand, over 70 per cent of villagers were farmers.

Almost 32 per cent had less than an acre of land; another 35 per cent had 1-2.5 acres. Only a third had a landholding exceeding 2.5 acres. Not surprisingly, only 48 per cent of rural income came from farming. Another 12 per cent came from business, and 12 per cent came from farm animals – mainly selling milk, meat or animals. Almost a third – 32 per cent – was wages. Only those families with more than 2.5 acres got more than a half of their income from farming. Those who had virtually no land earned 60 per cent of their income from wages, and got a quarter of their income from their animals. It is not common for farmers to engage in non-agricultural business; only about 10 per cent do it. But their proportion goes up to 15 per cent in Orissa, 18 per cent in West Bengal and 25 per cent in Kerala. Farmers in Kerala and Tamil Nadu who indulge in business earn over Rs 10000 a month – almost twice what the average farmer earns. Bigger farms earn more from business, but smaller farmers‘ profit margins are higher.

The richer states have fewer MGNREGA cardholders: the proportion was 3 per cent in Haryana, 13 per cent in Punjab, and 29 per cent in Gujarat. But it was 22 per cent in Bihar and 25 per cent in UP, which are hardly rich, and over 70 per cent in Tamil Nadu and Telengana, which are hardly poor. It was 38 per cent for the landless, 29 per cent for those with more than 10 acres, and over 40 per cent for the classes in the middle. The two bottom consumption deciles had more than a half of the farmers with MGNREGA card, the highest decile had 31 per cent; all the classes in the middle had 40-50 per cent cardholders. The cards are poorly correlated with poverty.

The size of the family was 7 in the poorest decile, and went down to 3.8 in the richest decile; the poor lived in joint families, no doubt to save on accommodation costs. The sex ratio went down from 1044 to 936 per thousand: the correlation was not perfect, but female infanticide was clearly positively related to income, maybe because the rich could afford it or knew how to get it.

All farmers who could, invested to increase their earnings, but what they invested in varied. Landless farmers spent two-thirds of their investment on livestock and poultry; those with an acre or less spent 48 per cent. Those with 5 acres or more spent roughly a half on machinery and implements. Investment in nonfarm business was close to 20 per cent amongst those with an acre or less, and less than 10 per cent amongst those with more than an acre. Farmers leave business to traders and other nonfarmers; few combine farming and business.

Seeds cost 10-15 per cent of output – more in Gujarat, Rajasthan and Maharashtra because land yields are lower. Almost a half of farm expenses in Kerala are wages; landowners find it profitable to work in towns or Dubai and hire workers to look after plantations or farms. In West Bengal, wages are 35 per cent of costs; there too, it is common for landowners to work in Calcutta and hire workers to do the farming. Leasing land is common in Punjab, where it accounts for 26 per cent of the costs. In neighbouring Haryana it is 12 per cent. Surprisingly, it is 20 per cent in Andhra; it apparently has many absentee farmers. Elsewhere it is negligible.

Milk is the major commercial product, accounting for 68 per cent of animal wallahs’ income, going up to 92 per cent in Punjab and 95 per cent in Haryana and Gujarat. But in Assam, Jharkhand, Chhattisgarh and Orissa, breeding animals for sale is their main use; it is also important in Kerala and Maharashtra.

The notion that indebtedness is a curse of small farmers is mistaken; the larger the farm, the more likely is the farmer to be indebted. Less than a half of farmers with under 2.5 acres are indebted, against over three-quarters of farmers with over 5 acres. Borrowing is more common in the south. The proportion of indebted farmers is 93 per cent in Andhra, 89 per cent in Telangana, 83 per cent in Tamil Nadu and 77 per cent in Karnataka and Kerala; it is low in “backward” states like Assam (17 per cent), Jharkhand (29 per cent) and Chhattisgarh (37 per cent).

Where agriculture is commercialized, farmers borrow for their businesses. The average debt was high in Kerala (Rs 2136), Andhra (Rs 1234), Punjab (Rs 1195) and Tamil Nadu (Rs 1159). Surprisingly, three-fifths of the money came from banks, cooperative societies and governments; only a quarter came from moneylenders, and another 3 per cent from traders or shopkeepers. A tenth came from friends and relatives. Big farmers are more likely to borrow from banks and cooperatives; small and landless farmers are more likely to borrow from moneylenders and “informal” lenders such as friends and relatives. Successive governments have made banks go into villages and lend to farmers. But banks are least willing to lend to bad risks such as poor farmers, who still have to go to moneylenders. Interestingly, banks give loans more easily against agricultural or non-agricultural business or a pension; a moneylender is more likely to lend against a prospective remittance, or a job or livestock.

Farmers spend a lot – 15-20 per cent of their costs – on manure and fertilizer, and close to 10 per cent on pesticides, weedicides etc. Irrigation costs very little – usually 2-4 per cent. The landless pay out more than 10 per cent of their income on leasing land. Renting animals is uncommon. The biggest cost is of human labour: it can come to 20 per cent of income or more. Even the landless employ workers to get the most out of the land they lease.

So my impression is that farmers are managing. But farming is a risky business with wildly fluctuating sale and purchase prices. The right finance for risk-taking is equity; but farmers cannot – or do not – incorporate themselves. So they often get into trouble. Some burn buses; others burn themselves.