'Some farmers earn a heck of a lot...': Capitalmind's Deepak Shenoy questions untaxed rich in agriculture

India’s agriculture isn’t a one-size-fits-all crisis. While some farmers survive on just ₹27 a day, others earn significantly more without paying taxes. Capitalmind founder Deepak Shenoy pointed out the glaring imbalance, emphasizing that wealthier farmers and companies exploiting agricultural tax exemptions should not remain untaxed.

Shenoy was responding to a post that highlighted dismal farmer earnings and questioned how they could be taxed at all. The post cited a report that said in 2018-19, the average farmer earned less from cultivation than they would working under MGNREGS.

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But Shenoy argued the real issue lies deeper. “Some farmers earn a heck of a lot,” he said, adding that companies operating in agricultural sectors, enjoying tax-free status, are further widening the gap. 

India’s dependency on agriculture as an employment safety net further muddies the waters. The pandemic lockdown exposed this reliance when agricultural jobs surged, reversing decades of economic progress in shifting workers to manufacturing and other sectors.

Meanwhile, farmers face the world’s highest implicit taxes, contributing $169 billion annually—far more than any other nation—while receiving some of the lowest levels of government support. As one user pointed out, Indian farmers are “bleeding,” and systemic reforms are urgently needed.

Policy failures add to the crisis. India overproduces rice but fails to export surplus effectively, creating waste and pushing for unsustainable guarantees like MSP on already overproduced goods. Shenoy compared it to promising an Ola driver a fixed number of rides every day.

India’s farming sector shouldn’t operate under guaranteed MSP, argues Shenoy. “Everyone works and takes risks, and that applies for farming too. More importantly, it will bankrupt India. Stop overfarming rice, wheat, and sugarcane,” he wrote.

Responding to a user’s query on why the government sets prices for farmers’ produce, Shenoy clarified that except for sugar, farmers can sell their produce at any price in states that have removed mandi laws. 

“When the government said remove the mandi restrictions, full protests happened!” he remarked, emphasizing the resistance to reforms that aim to reduce overdependence on state intervention.

Shenoy also called out the inefficiency of treating all farmers equally. Wealthier farmers and corporations enjoying tax-free profits need to contribute their share.