Income Distribution and Inequalities among Rural Farmers of Nagaland, India

The rural economy in India is predominantly dependent on agriculture and allied activities, on which roughly 54 percent of the rural households depend, while 46 percent depend on non-agricultural activities. However, for the past few years, the structure of Indian agriculture has been experiencing a decline in farm size, which has led to a rise in the marginalization of holdings (Meena et al., 2017). The distribution of area in percentage for marginal farmers increased from 29.8 percent to 34.5 percent between 2012–13 and 2018–19. In contrast, the percentage area for medium farms decreased from 23.1 percent in 2002–03 to 14.7 percent in 2018–19, and for large farmers, it decreased from 11.6 percent in 2002–03 to 5.8 percent in 2012–13 and then further declined to 3.9 percent (National Statistical Survey Report, 2019). As one of the developing economies, India still relies heavily on agriculture to generate income and employment in its rural areas, while it is widely acknowledged that this sector alone cannot keep up with the country's growing population.

It has long been assumed that rural households in developing countries are almost entirely focused on farming and neglect other non-farm activities in the countryside, according to the World Bank (2008). In order to improve rural well-being and lower poverty in the world's growing nations, a comprehensive approach that goes beyond agricultural development is therefore required. According to Chand et al. (2011), small landowners who relied solely on agriculture for their income were likely to have continued to live in poverty. Given the issue of income variability, rural farmers turned to non-farm income streams as an alternate source of income. Identifying the most effective ways to promote non-farm activities is vital, since non-farm income is essential for rural households to sustain and improve their standard of living and may even be a means of escaping poverty (FAO, 2002).

Since the beginning of the green revolution in the early 1960s, Indian agriculture has evolved towards modern agriculture, resulting in the adoption of improved technology and the development of infrastructure within the agricultural sector. While productivity grew, the experience of its benefits was uneven across regions and farm sizes, which has created economic inequality among agricultural households (Dhanagare, 1988; Freebairn, 1995). The green revolution promoted expensive technology investments for the richer farmers in those resource-rich areas, keeping away the small farmers in resource-scarce areas (Shiva, 1993). Because of scarce resources, farmers were more competitive, which increased the gaps between social classes and geographic areas and, ultimately, led to an uneven distribution of income. The adoption of economic reforms and liberalization in India, which has predominantly benefited the top 1 percent of the population, who held more than one-fifth of the entire national income in 2021, is another example of growing inequality. The bottom half, however, only has 13 percent of the income (World Inequality Lab, 2022). India is one of the most unequal countries as a result. Land ownership and agricultural revenue are strongly related. The very unequal distribution of land in India has resulted in significant economic inequalities within rural communities, as disclosed by Ranganathan et al. (2016).