Why Agriculture Sector’s Share In Rural Employment Is Declining

  • Over the last three-and-a-half decades, there has been a structural shift in the occupational choice among rural workers, particularly rural agricultural workers, with changes in their occupational choices ranging from agriculture to non-agricultural sectors.
  • According to the 38th Round (1983) of the National Sample Survey (NSS) report, around 77 per cent of rural households depend on the agricultural sector to sustain their livelihoods.
  • Over the years, rural households’ dependency on agriculture has declined to 50 per cent as per the latest round of the Periodic Labour Force Survey (PLFS) for 2018-19.
  • In addition, the agriculture sector’s contribution to national GDP has declined from 34 per cent in 1983-84 to 16 per cent in 2018-19.
  • The agricultural sector’s contribution to employment declined from 81 per cent in 1983 to 58 per cent in 2018.
  • Rural non-agricultural employment, which increased from 19 per cent to 42 per cent during the same period.

Gender-wise employment

  • Percentage of male workers engaged in agricultural activities declined from 78 per cent in 1983 to 53 per cent in 2018,
  • while the rate of female agricultural employment fell from 88 per cent to 71 per cent in the same period.
  • On the other hand, workforce participation in rural non-agricultural sectors for male workers increased from 22 per cent in 1983 to 47 per cent in 2018, thus registering an increase of 25 percentage points.
  • Along similar lines, female employment in the rural non-agricultural sector gradually increased from 12 per cent to 29 per cent over the same period.


What are the primary reasons behind the decline in employment share in the rural agricultural sector?

  • Major internal factors such as insufficient public investment for agrarian development, inadequate access to institutional credit, inadequate irrigation facilities, government’s poor agriculture-related marketing policies, half-baked land reform policy, and low return from agriculture are responsible for the fall in agricultural employment.
  • Besides, external factors such as excessive economic liberalisation in the Indian economy and low import tariffs in agricultural products have also played a critical role in the declining share of employment in the rural agriculture sector.

Exogenous shocks

  • Apart from the external and internal factors, exogenous shocks such as frequent droughts, floods and cyclones are also responsible for the falling employment share in the agricultural sector.
  • These natural calamities cause extensive damage to crops, which in turn disincentivises rural workforce to take-up farming.
  • According to a report by the Central Water Commission, on an average India lost around ₹2,785 crore annually due to crop damage related to flooding during the period 1980-2017.
  • Female workers cannot easily shift from agricultural to non-agricultural occupations due to socio-economic and cultural barriers.

Way ahead

  • To mitigate the impact of floods on gender-wise employment in the rural agricultural sector, both the Central and State governments should devise a suitable flood management policy and implement a revamped agricultural policy.
  • For example, the government should invest more in flood control, irrigation, and disaster risk reduction measures.
  • Moreover, increasing public investment for building agricultural infrastructure, revamping agricultural marketing policy, providing compulsory crop insurance, making agricultural input subsidies readily available, and increasing MSPs for major crops are crucial.
  • These measures will encourage rural female workers to engage in agricultural activities and minimise labour shift from agricultural to the rural non-agricultural sector.