Economic Factors Responsible for Net Income Variation on Small Farms in Southern Punjab, Pakistan

Many factors are involved in the variation of net income on small farms at every location where agricultural activities take place. A study was conducted in the Faculty of Agricultural Economics and Rural Sociology, University of Agriculture, Faisalabad, Pakistan during 2005-06 to ascertain various factors which contribute towards the net income variation among the marginal farmers in southern Punjab. The results revealed the importance of seed rate, land rent, fixed cost items and distance from main road. An additional rupee spent on seed, fertilizer and pesticide contributed Rs. 0.47 to the net income of small farmers. The coefficient for land rent, interest and depreciation was 0.45 while it was 0.57 in case of cost associated with labour. It also showed that there was a difference of about Rs. 14,000 between the high net income group and low net income group of marginal farmers. The variables included in the model showed about 64 percent variation in the dependent variable (net income). Proper training of farming community, easy access to inputs and output markets and developed infrastructure facilities are suggested to hasten economic development in the study area.