Caste discrimination and returns to farming: Evidence from Maharashtra

Motivation Caste‐based discrimination continues to shape economic outcomes in rural India. Although substantial evidence documents wide disparities in economic indicators between Scheduled Castes (SCs) and other social groups, relatively little is known about inequalities in farm incomes. Findings from large‐scale sample surveys and village‐level studies consistently show that SC households earn lower farm business incomes than their non‐SC counterparts. However, evidence on the specific discriminatory practices that contribute to these income differentials remains limited. Purpose Drawing on quantitative and qualitative data collected in two SC‐dominated villages in Maharashtra, this article documents the forms and mechanisms of discrimination operating in agricultural input and output markets. Approach and Methods Fieldwork was conducted by the primary author during 2019 and 2020 in two villages in Nanded district, a relatively underdeveloped region within the otherwise high‐income state of Maharashtra in India. By focusing on villages where SCs constitute the dominant population, this study extends the existing literature, which has largely examined discrimination in multi‐caste village settings. The analysis is guided by an existing conceptual framework that identifies discrimination through complete exclusion and selective inclusion, and also examines discrimination derived from differential effects and cumulative deprivation across time and institutional domains. Findings Our detailed estimates reveal relatively low levels of income from crop production in both study villages. We also identify multiple forms of discrimination that affect market transactions, particularly in agricultural input and output markets, as well as discriminatory outcomes associated with public policy implementation. Although low agricultural productivity is partly attributable to regional constraints, including a lack of irrigation, we do not attempt a formal statistical attribution of income differentials. Rather, we show that the discriminatory practices documented in this study are likely to increase production costs and reduce net farm incomes for SC cultivators compared to other farmers. Policy Implications We therefore argue that public policies aimed at improving farm incomes—including minimum support price policies, fertilizer subsidies, and investments in irrigation—should explicitly recognize and address the discriminatory practices that place SC cultivators at a persistent economic disadvantage in rural India.