Small and marginal farmers

Indian Economy glossary

Topic: Employment, Unemployment and Informalisation · NCERT: Class 10, Ch 2 "Sectors of the Indian Economy"; Class 10, Ch 3 "Money and Credit"

Meaning

Small and marginal farmers are farmers grouped by the size of their operational holding (the land they farm as one unit, whether they own it or lease it). A marginal farmer operates less than 1 hectare (ha). A small farmer operates 1-2 ha.

They matter because they make up most of Indian farming. The Agriculture Census 2015-16 put them at about 86% of operational holdings. Most of them work in the unorganised sector, so they need support with credit, inputs, storage and marketing.

Explanation

How the classification works

  • The measure is land operated, not land owned.
  • A farmer who leases in land counts it in their holding.

  • A farmer who leases out land does not count it.

  • The two size groups:

  • Marginal: below 1 ha.

  • Small: 1 ha to 2 ha.

  • Worked example:

  • Ramesh owns 0.6 ha and leases in another 0.7 ha from a neighbour.
  • His operational holding is 0.6 + 0.7 = 1.3 ha, so he is a small farmer.
  • If he stopped leasing, his holding would fall to 0.6 ha and he would become a marginal farmer, even though the land he owns has not changed.

Why they are counted as unorganised workers

  • Their farms are small and spread out, and most of this work happens outside government rules. Income depends on rain, prices and how much they can produce.
  • They get no paid leave, no fixed wage and no old-age security. This is the usual pattern in the unorganised sector (small, scattered units that are mostly outside government control).
  • Many come from SC, ST and backward communities, so discrimination adds to their low income.

What they need

  • Timely seeds and inputs. A late or poor input means a poor crop for the whole season.
  • Credit (loans).
  • Without formal loans, farmers borrow from moneylenders or landowners.

  • They pay high interest, fall into debt, and may have to sell their crop cheaply to repay the lender.

  • Storage.

  • With no place to store grain, farmers must sell right after harvest, when prices are lowest.

  • Marketing outlets (places where they can sell their crop at a fair price).

What makes their numbers rise or fall

  • Land division through inheritance: when a holding is split among heirs, each new holding is smaller. More farmers become small or marginal.
  • Leasing in or leasing out land: this changes the operational holding, as the worked example shows.
  • Moving out of farming: when family members find non-farm jobs, fewer people depend on the same small plot.

In India

  • Size of the group:
  • The Class 10 NCERT textbook (Sectors of the Indian Economy) says small and marginal farmers are "nearly 80% of rural households".

  • The Agriculture Census 2015-16 put them at about 86% of operational holdings. The 2021-22 census figure should be checked before use.

  • Where they fit: NCERT lists them as rural unorganised workers, alongside landless agricultural labourers, sharecroppers and artisans.

  • Protection needed on three fronts: wages, safety and health (Class 10). For farmers, the key needs are credit, inputs, storage and market access.
  • Social security links (for unorganised workers in general):
  • e-Shram (2021): a national database of unorganised workers. Each registered worker gets an e-Shram UAN (Universal Account Number, one ID that goes with the worker everywhere). It had 31.42 crore registrations as of 22 December 2025 [2].
  • PM-SYM (2019): a contributory pension (the worker pays a monthly amount) that gives ₹3,000 a month from age 60 to unorganised workers.
  • Atal Pension Yojana (2015): another pension option for people outside formal pension schemes.
  • The Unorganised Workers' Social Security Act, 2008 is now subsumed (absorbed) into the Code on Social Security, 2020.

Don't confuse with

  • Landless agricultural labourers: they own and operate no land. They work on other people's farms and depend on the landowner for both work and loans. Small and marginal farmers operate their own holding, even if it is tiny.
  • Sharecroppers: they farm someone else's land and pay the owner a share of the crop, usually with insecure tenancy. The classification of small and marginal farmers is about holding size, not about the payment arrangement.
  • Ownership holding vs operational holding: the small or marginal classification uses the operational holding (land farmed, including leased-in land), not land ownership.
  • "80% of rural households" vs "86% of operational holdings": the first figure is NCERT's (Class 10), counted in households. The second is from the Agriculture Census 2015-16, counted in holdings. Do not swap them.

Prelims Hooks

  • Marginal farmer = operational holding below 1 ha. Small farmer = 1-2 ha.
  • Operational holding = land farmed as one unit by a person, whether owned or leased.
  • Agriculture Census 2015-16: small and marginal farmers are about 86% of operational holdings.
  • Class 10 NCERT: they are "nearly 80% of rural households".
  • NCERT lists them as rural unorganised workers, along with landless labourers, sharecroppers and artisans (weavers, blacksmiths, carpenters, goldsmiths).
  • Trap: a farmer who owns 0.8 ha but leases in 0.5 ha operates 1.3 ha and is a small farmer, not a marginal one.

Mains Points

  • The biggest part of the informal economy:
  • Small and marginal farmers, landless labourers and artisans far outnumber gig workers.
  • If policy focuses only on the visible gig workforce, these workers are left out.

  • Universal social security (the idea pushed by the NCEUS, the National Commission for Enterprises in the Unorganised Sector) must reach them (GS-III).

  • Registration is not the same as protection:

  • e-Shram has 31.42 crore registrations (December 2025) [2], but an ID gives nothing by itself.

  • Farmers gain only when the ID is linked to pensions (PM-SYM, APY), health cover, credit and market access.

  • Credit and markets decide farm income:

  • Without formal credit, farmers depend on moneylenders and are trapped in debt.
  • Without storage and fair marketing outlets, they are forced to sell at harvest-time prices.
  • Timely inputs, institutional credit, storage and market links are the main tools for raising their income. Because many of these farmers are SC/ST, this is also a matter of social justice (GS-II/GS-III).

Related concepts

Read more

Sources

  1. 1Class 10, Ch 2 "Sectors of the Indian Economy"; Class 10, Ch 3 "Money and Credit" (primary)
  2. 2PIB — Year End Review 2025, Ministry of Labour & Employmentpib.gov.in · tier 1