Household Expenditure Survey: Monthly Spending of Farming Families Falls Below Rural Average

The latest Household Consumption Expenditure Survey (HCES) 2022-23, released by the National Sample Survey Office (NSSO) on Saturday, reveals a significant development: for the first time, the average monthly per capita consumption expenditure (MPCE) of agricultural households has dipped below the overall average of rural households.

According to the survey, in the 2022-23 period (August-July), the average MPCE of households engaged in agriculture as self-employed individuals stood at Rs 3,702, while the overall average for rural households was slightly higher at Rs 3,773.

Over the years, the disparity between the MPCE of agricultural households and the rural average has been diminishing. Back in 1999-2000, agricultural households had an MPCE of Rs 520, compared to the rural average of Rs 486. By 2011-12, the MPCE of agricultural households had risen to Rs 1,436, just slightly surpassing the average rural spending of Rs 1,430.

Similarly, the MPCE of casual laborers and regular wage earners engaged in agriculture also fell below the rural average in the HCES 2022-23.

This trend raises concerns, as noted by Rama Kamaraju, a former senior consultant with NITI Aayog, who highlights that this disparity indicates a need for policy intervention.

One potential reason behind this trend could be the increasing diversification of rural economies, with non-agricultural activities gaining traction. Additionally, the return of migrant laborers to rural areas during the Covid-19 pandemic might have contributed to an increase in the number of individuals engaged in agriculture, possibly pulling down the overall MPCE of agricultural households.

The MPCE is a crucial metric for assessing poverty levels, and the decline in MPCE among agricultural households compared to the overall rural average is significant, particularly in the context of recent farm protests and ongoing demands for a legal guarantee of minimum support prices (MSP).

The survey also provides data on MPCE estimates with imputation, considering items received free of cost through social welfare programs. Even with these adjustments, the average MPCE for agricultural households remains lower than the overall rural average.

Moreover, the survey highlights disparities across different demographic groups, with Scheduled Tribes (STs) reporting the lowest MPCE in rural areas, while Scheduled Castes (SCs) reported the lowest in urban areas.

While the HCES typically occurs every five years, there was a notable delay in releasing the survey results for the 75th round (July 2017-June 2018), attributed to significant variations in consumption patterns.

Overall, these findings underscore the need for targeted policies to address the economic challenges faced by agricultural households and bridge the gap in consumption expenditure between rural and urban areas.