The lives of rural households are predominantly based on agriculture and its allied activities. However, there are signs of an agricultural crisis resulting in dependence on alternative sources of income. This paper analyzes the factors that influence the decision of farm households to participate in non-farm activities for alternative income. The official data for two years on the Situation Assessment Survey of Agricultural Households are explored and a pooled probit regression model is run to examine the determinants of income diversification. Our findings reveal that farm income and irrigated land negatively influence diversification. However, diversification of those having lower access to farm holdings, socioeconomic deprivation, and improved access to education, informal credit, and crop insurance point out positive participation in non-farm enterprises. In addition, the population belonging to hilly and coastal plain regions and the age group 30–64 years are more likely to diversify.
AbrahamV (2009) Employment growth in rural India: distress-driven?Economic and Political Weekly44: 97–104.
2.
AkaakoholMAAyeGC (2014) Diversification and farm household welfare in Makurdi, Benue State, Nigeria. Development Studies Research1: 168–175.
3.
AsfawASimaneBHassenA, et al. (2017) Determinants of non-farm livelihood diversification: evidence from rainfed-dependent smallholder farmers in northcentral Ethiopia (Woleka sub-basin). Development Studies Research4: 22–36.
4.
AzamMSImaiKSGaihaR (2012) Agricultural supply response and smallholders market participation—The case of Cambodia. Discussion Paper DP2012-09. Kobe, Japan: Research Institute for Economics and Business Administration, Kobe University. Available at: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2012-09.pdf
5.
BarrettCReardonTWebbP (2001) Non-farm income diversification and household livelihood strategies in rural Africa: concepts, dynamics and policy implication. Food Policy26(4): 315–331.
Binswanger-MkhizeHP (2013) The stunted structural transformation of the Indian economy: agriculture, manufacturing and the rural non-farm sector. Economic and Political Weekly48: 5–13.
10.
ChandRSaxenaRRanaS (2015) Estimates and analysis of farm income in India, 1983–84 to 2011–12. Economic and Political Weekly50(22): 139–145.
11.
ChandrasekharCP (1993) Agrarian change and occupational diversification—nonagricultural employment and rural-development in West-Bengal. Journal of Peasant Studies20(2): 205–270.
12.
EllisF (2000) The determinants of rural livelihood diversification in developing countries. Journal of Agricultural Economics51(2): 289–302.
13.
GhoshMGhosalS (2021) Households’ choices and their drivers to rural non-farm livelihood diversification in West Bengal, India. Journal of Asian and African Studies57: 1158–1178.
HaggbladeSHazellPReardonT (2007) Transforming the Rural Non-Farm Economy: Opportunities and Threats in the Developing World. Baltimore, MD: International Food Policy Research Institute, Johns Hopkins University Press. Available at: http://ebrary.ifpri.org/cdm/ref/collection/p15738coll2/id/126215
16.
Himanshu, LanjouwPMurgaiR, et al. (2013) Non-farm diversification, poverty, economic mobility and income inequality: a case study in Village India. Policy Research Working Paper 6451. Washington, DC: World Bank.
17.
Himanshu, LanjouwPMukhopadhyayA, et al. (2011) Non-farm diversification and rural poverty decline: a perspective from Indian sample survey and village study data. LSE Asia Research Centre Working Paper, London School of Economics and Political Science, London.
18.
JatavMSenS (2013) Drivers of non-farm employment in rural India evidence from the 2009-10 NSSO Round. Economic and Political Weekly48: 14–21.
19.
KaurRGarciaSCFulkersonWJ, et al. (2010) Utilisation of forage rape (Brassica napus) and Persian clover (Trifolium resupinatum) diets by sheep: effects on whole tract digestibility and rumen parameters. Animal Production Science50(1): 59–67.
20.
LanjouwJOLanjouwP (2001) The rural non-farm sector: issues and evidence from developing countries. Agricultural Economics26(1): 1–23.
21.
LanjouwPShariffA (2004) Rural non-farm employment in India: access, income and poverty impact. Economic and Political Weekly39(40): 4429–4446.
22.
LewisWA (1954) Economic development with unlimited supplies of labour. The Manchester School22: 139–191.
23.
LoisonSA (2015) Rural livelihood diversification in Sub-Saharan Africa: a literature review. Journal of Development Studies51(9): 1125–1138.
24.
MalekMAKoichiU (2009) Determinants of non-farm income diversification in developed villages of Bangladesh. American Journal of Economics and Business Administration1: 141–149.
25.
MellorJW (1976) The New Economics of Growth: A Strategy for India and the Developing World. Ithaca NY: Cornell University Press.
26.
National Sample Survey Office (NSSO) (2005) Situation assessment survey of farmers, access to modern technology for farming. Report No. 499(59/33/2). New Delhi, India: NSSO, Ministry of Statistics and Programme Implementation, Government of India (GoI).
27.
National Sample Survey Office (NSSO) (2014) Key indicators of situation of agricultural households in India. Report no NSS KI (70/33). New Delhi, India: NSSO, Ministry of Statistics and Programme Implementation, Government of India (GoI).
28.
National Sample Survey Office (NSSO) (2021) Situation assessment of agricultural households and land and livestock holdings of households in Rural India. Report No. 587. New Delhi, India: NSSO, Ministry of Statistics and Programme Implementation, Government of India (GoI).
29.
NayyarG (2012) The Service Sector in India’s Development. Cambridge: Cambridge University Press.
30.
ReardonTBerdegueJBarrettCB, et al. (2007) Household income diversification into rural non-farm activities. In: HaggbladeSHazellPReardonT (eds) Transforming the Rural Non-farm Economy: Opportunities and Threats in the Developing World. Baltimore, MD: Johns Hopkins University Press, pp. 115–140.
31.
ReardonTStamoulisKBalisacanAM, et al. (1998) Rural non-farm income in developing countries. The State of Food and Agriculture, Part III. Rome: Food and Agriculture Organization of the United Nations. Available at: www.fao.org/docrep/017/w9500e/w9500e.pdf
32.
SanyalK (2007) Rethinking Capitalist Development Primitive Accumulation, Governmentality and Post-Colonial Capitalism. London: Routledge.
33.
VijaybaskarMNarayananSSrinivasanS (2018) Agricultural revival and reaping the youth dividend. Economic and Political Weekly53(26–27): 8–16.
34.
World Bank (2011) Perspectives on Poverty in India: Stylized Facts from Survey Data. Washington, DC: World Bank.
