by Dada R Dadas, & Shrikant Mukate
This blog post has been published as part of the ‘Integrated Water Resources Development and Promotion of Ecosystem-based Adaptation in Maharashtra and Telangana – A Practice and Knowledge Embedded Approach’ programme supported by the Honeywell Hometown Solutions India Foundation (HHSIF).
The need to develop income resilience for rural households
India is mostly a rural country. According to the 2011 Census, 68.8% of the population and 72.4% of the work force live in rural areas (Chand et al., 2017). 46% of the country’s income comes from the rural economy (Economic Times, 2021). 46% of the country’s income comes from the rural economy (Economic Times, 2021).
However, the average income of a small-scale food producer is less than half that of a large-scale food producer, and the average income of a small-scale food producer woman is always less than that of a small-scale food producer man (FAO, nd). 86.2% of all farmers are small and marginal farmers with less than two hectares of land, but they only own 47.3% of arable land (Singh et al. 2020). Nearly 80% of all farmers in India are small and marginal farmers. More than 90% of them depend on rain to grow crops (Voluntary National Review Report on SDG Implementation, 2017). Consequently, other ways to improve the income of rural communities must be given more attention.
Degrading natural ecosystems, decreasing agricultural productivity, rising unemployment, poverty, hunger, human rights violations, distress migration, and economic inequalities are major concerns in rural India, widening the income gap between the rich and poor. Reportedly, approximately 28% of the Indian population was multidimensionally poor in 2016 (Statista Research Department, 2021). Poor people faced an average of 43.9% of weighted deprivation, and traditionally disadvantaged subgroups (resource-poor) remained the poorest in 2015-16. (Global Multidimensional Poverty Index, 2018).
Furthermore, climate change has had a significant impact on agriculture, which resulted in 1.5% decrease in India’s GDP. Rice and wheat yields are expected to fall by 6-10% by 2030. Kharif crops will be more affected by rainfall variability, while Rabi crops will be affected by minimum temperature (Goswami, 2017). ‘Rainfed agriculture will be most affected by rainfall variability and a decrease in the number of rain days’ (PIB, 2019).
Such agrarian losses reduce income and add to the economic burden. Millions of people in rural India have lost their livelihoods in agriculture and related occupations, compelling them towards distress migration. This includes resource-poor labourers, small farmers, and marginalised communities. According to estimates, there are over 450 million internal migrants in India (Mukherji, 2013), and over 45 million inter-state migrants (Indian Social Institute, 2020).
Furthermore, the recent national lockdown caused by COVID-19 has resulted in significant structural changes in the Indian economy, with the rural economy suffering the most (Economic Times, 2021). During this period of crisis, it was observed that the rural population was unprepared to deal with such a crisis and was unable to build resilience. To address this, the rural population requires various types of training and capacity building activities to improve the strength of rural communities dealing with multidimensional problems.
In Indian agriculture, one hundred million smallholder farmers face a number of obstacles to achieving food and income security, which are being exacerbated by climate change (Cornell, 2021). Understanding the income sources and challenges faced by rural communities is therefore critical to increasing their income resilience.
Agriculture has traditionally been the primary sector of the rural economy and rural employment (Chand et al., 2017) and accounts for approximately 17% of national GDP (Paroda, 2019). According to a NABARD survey, the average monthly income from all sources per agricultural household is estimated to be Rs. 6,426 (India Business Standard, 2019), and this income level is meagre, forcing farmers into debt. ‘Approximately 52% of households have reported outstanding loans’ (NABARD, 2018). Agriculture, livestock, fisheries, and forestry provide a significant portion of rural income (Porsché et al., 2011; Sterrett, 2011). Income is also generated from ‘agricultural wage labour, non-timber forest produce (NTFP), and migration to other rural/urban areas (Rangnathan et al.’ nd’).
According to the 10th agriculture census (2015-16), rural incomes support nearly three-quarters of Indian families. As per the Wage Report of the Indian Labor Organization (ILO), workers’ real average daily wages were Rs. 120 in 1993-94 and Rs. 177 in 2011-12. (Jadhav, 2021). Agriculture labour contributes significantly to and supports agricultural activities. However, according to ILO data, there has been no significant improvement in wage status. As a result of a reduced capacity to absorb climatic and livelihood shocks, migration among labourers and small-marginal farmers is common. It has thus become critical to work on developing resilient income for rural communities in order to meet the needs of resource-poor rural communities while combating the current climate crisis.
The idea of a resilient income; how can Ecosystem Services (ESS) withstand the effects of climate change while still making the case for improving and protecting the health of ecosystems and Ecosystem Services?
Understanding the concept of resilient income is essential for developing resilience in farmers, labourers, small and micro-entrepreneurs, and others. The concept of resilience is defined as “the ability of a system (e.g., a community, society, or ecosystem) to cope with disturbances (e.g., financial crises, floods, or fire) without shifting into a qualitatively different state” (Gunderson and Holling, 2002). People can absorb, recover from, or adapt to disruption without jeopardising their long-term well-being (Understanding the State of the State, 2017). The ability to withstand life events that affect one’s income and assets is referred to as resilient income/financial resilience. Financial resilience is defined as ‘the ability to cope with income or expenditure shocks or to recover quickly from periods of financial adversity.’
As anticipated by SDG 1, adequate social protection systems can help strengthen individuals’ and households’ resilience to stresses and shocks (Relief Web, 2018). Furthermore, the government’s flagship programmes, such as doubling farmers’ income, can assist agriculture and the allied sectors in becoming more resilient. The initiative insists on accelerating growth in the agriculture and allied sectors, increasing farmer incomes, and ensuring income security through increased agricultural productivity, diversification toward high-value crops, increased crop intensity, and income from sources other than agriculture, improving farmers’ terms of trade, and shifting cultivators to non-farm and subsidiary activities (NABARD, 2018). These efforts aim to achieve SDGs 1 and 2 by 2030 while also increasing financial resilience. A systematic approach to improving these outcomes at the ecosystem level for a landscape may result in the creation of not only a self-sufficient landscape with resilience to climate change and supply chain shocks, but also a separate asset class of a model ecosystem that is financially and environmentally sustainable.
The way forward (Interlinkage and contribution in NDCs, SDGs, etc.)
To boost resilient income in rural communities, it is essential to focus on improving crop and livestock productivity, resource efficiency, creating market linkages for crops produced, strengthening supply chains, diversifying procurement and sales strategies to minimise the impact of disruptions, lowering production costs, diversification towards high-value crops, and a mix of farm and non-farm occupations.
Ecosystem-based Adaptation (EbA) can effectively generate resilient income in the aforementioned climate-sensitive sectors in this context. EbA has the potential to generate economic returns and provide a variety of benefits, including improved health, biodiversity protection, food security, market linkage strategies, fair price and revenue for produce, access to quality finance and other resources, and alternative livelihood opportunities, all of which can contribute to ecological, social, and economic resilience (IISD, 2021).
‘ Maintaining equity through participatory governance is also central to EbA; it recognises the importance of equity in the participation of women, marginalised groups, and small and marginalised farmers (UNEP, 2010) in various decision-making processes. This will also help with national and international commitments such as NDCs and SDGs. The resilient income assists both communities and nature in coping with and recovering from various shocks. Increasing resilient income is related to SDG goals 1, 2, 3, 8, 10, 15, and 16 in terms of achieving poverty reduction, economic growth, health, nutrition, and gender equality, among other things. As a result, increasing resilient income is critical.
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