Nearly 56 million Indians joined back agriculture in 3 yrs: Is it a good sign or an indicator of an economic distress?

Like other developing countries, India aspires for the transition of its vast farm workforce to non-farm sectors. There has been a slow transition to non-farm sectors over the decades. It remained staedy. But now, the COVID-19 pandemic has reversed this trend.

According to the India Employment Report 2024, co-produced by the International Labour Organization (ILO) and the Institute for Human Development (IHD), the Delhi-based non-profit set up by the Indian Society of Labour Economics, “The slow transition to non-farm employment has reversed.” 

“After 2019, this slow transition reversed due to the pandemic, with a rise in the share of agricultural employment as well as an increase in the absolute size of the agricultural workforce,” the report found. It primarily used Government of India data on employment generated through the National Sample Surveys and the Periodic Labour Force Surveys conducted during 2000 and 2022.

During 2020-2022, the agriculture sector recorded an increase of workers by nearly 56 million. This period coincided with the outbreak of the COVID-19 pandemic in March 2020 that led to the nearly two months of stringent lockdown and its tapering down in 2022. In 2020, the country witnessed an exodus of informal workers from urban centres to villages, often cited as a bigger human movement than the 1947 partition of the subcontinent that gave birth to India and Pakistan.

In 2020, the number of workers in agriculture and allied sectors increased by 30.8 million. Next year, the agri-sector workforce added 12.1 million and in 2022, another 12.9 million joined the agri-worker family. “Between 2000 and 2019, youths shifted out of agriculture much more than adults, but the COVID-19 pandemic reversed the long-term trend of youth employment expansion into non-farm sectors.”

This is a reversal of a 20-year trend. “During 2000-19, there was a shift in employment from low-productivity agriculture to relatively higher-productivity non-agriculture sectors,” says the ILO-IHD report. In fact, employment in the agriculture sector reported negative growth during 2000-2019. Expectedly, this decline in farm employment marked a sharp increase in employment in the construction and service sectors, the sectors farm workers usually shift to. But during 2019-2022, the report indicates that agricultural growth spurred. “This surge can be attributed to individuals returning to subsistence activities in agriculture due to the lack of work opportunities outside the agriculture sector that was exacerbated by the pandemic-related economic slowdown,” says the report.

Overall, employment growth nearly stagnated before 2019. “After 2019 and due to the COVID-19 pandemic, there was a substantial increase in employment, with agricultural employment growth even outpacing the growth in agriculture gross value added.” In 2019-2021, the exodus back to villages, and into the farm sector, has significantly changed the labour market make up in the country: “In absolute numbers, the labour force and the workforce increased much more in rural areas (at 47 million workers and 51.3 million workers, respectively) than in urban areas (at 16.5 million and 16.8 million persons, respectively) between 2019 and 2021.”

This transition back to agriculture might not be good news per se. It could be a sign of distress: as non-farm sectors are not able to create employment, people are forced back to the non-remunerative agriculture sector. Also, this surge in agricultural workforce is due to a large number of women joining back the sector during 2020-2022. “Nearly two thirds of the incremental employment after 2019 comprised self-employed workers, among whom unpaid (women) family workers predominate,” says the report.

The female labour participation rate had declined in comparison to the male participation rate during 2000-2029. But in 2019-2022, this reversed: more females are back to agriculture than males. “This rise, along with other labour market changes, is consistent with more women coming into the workforce in response to crises.” In 2022, of the workforce, the proportion of women employed in agriculture was 62.8 per cent, in comparison to 38.1 per cent in case of men.

“The rise in employment in subsistence agriculture, either as own-account workers or unpaid family workers, as well as in casual workers in the construction sector, indicates that a large number of poor migrants returning to their native home and marginal workers may have been compelled to work in these sectors in rural areas for their livelihood,” says the report.

It has investigated the monthly wages and earning of workers. And its findings don’t show any growth. “The growth rate of regular and self-employed earnings remained low or negative right up to 2021 but grew during 2022. The regular wages of both female and male workers experienced a small negative growth rate between 2018 and 2022,” says the report adding, “However, female self-employed workers experienced a considerably higher negative growth rate in earnings compared with men. Additionally, women’s casual wages exhibited a slightly higher growth rate than what it was for men.”

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