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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Citation
Das, Souradipta (2021). Income diversity of agricultural households in Punjab and its determinants (Unpublished M.Sc. thesis). Punjab Agricultural University, Ludhiana, Punjab, India.