Income diversity of agricultural households in Punjab and its determinants

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Date
2021
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Punjab Agricultural University, Ludhiana
Abstract
The present study was conducted to identify the pattern of rural income diversification, its determinants and its impact on inequality. The study was based on unit-level data from two rounds of National Sample Survey Office (NSSO) on Situation Assessment. The first survey was conducted in 2002-03 and was named as Situation Assessment of Survey of Farmer Households in India and the second survey was conducted in 2012-13 and was named as Situation Assessment of Agricultural Households in India. Crop income was the major constituent of household income and its share in total income increased but the share of nonfarm income decreased. The bottom one per cent of the agricultural households run the deficit for total income, for the upper 25 per cent of household it was more than three times. It showed a widespread income inequality among various categories of rural households. The relationship between income diversification and rural household income pointed towards distress diversification by relatively poor households. The Simpson diversity index value for Punjab was low in both years because of the high degree of specialisation in cropping activities. Marginal farmers and semi medium farmers became diversified with these 10 years but the large farmers became specialized with time. The Simpson diversity index for the marginal and small were considerably higher than that of the medium and large farmers. It was due to the reason that marginal and small categories were deriving their income from crops, dairying and wage labour in agriculture. Age, non-farm income source, landholding size and irrigated land size were the main determinants of household income diversification. The analysis indicated that crop income contributed maximum in total inequality and was inequality triggering in its effect. While livestock and, wages and salaries and non-farm business sources were the potential sources to bridge the inequality gap in the entire state. The result of Theil index emphasized that the intra-landholding and inter-landholding inequality was the main contributor in total inequality in the year 2002-03 and 2012-13 respectively.
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Das, Souradipta (2021). Income diversity of agricultural households in Punjab and its determinants (Unpublished M.Sc. thesis). Punjab Agricultural University, Ludhiana, Punjab, India.
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