Can Diversification of Livelihood Sources Increase Income of Farm Households? — A Case Study in Uttar Pradesh

This paper has examined the question ‘Can diversification of livelihood sources increase the income of farmers?’ through a case study conducted on 151 farm households in the districts of Moradabad and Aligarh in Uttar Pradesh in the first quarter of 2017. The study has considered three sources of income, viz. crops, animal husbandry and non-farm sector. The analytical tools used in the study are Simpson index of diversification, chi-square test and censored Tobit regression model. The study has observed a significant difference between the incomes of diversified and undiversified farm households. The determinants of income sources of farm households identified in the study are age, education level, use of ICT, access to credit, input supply and market. The study has suggested that to increase farmers’ income, policies should focus on the development of livestock sector to motivate them for rearing of animals for commercial purposes. Also, the delivery of formal and informal education and extension services should be strengthened to enable the farmers to utilize their full capacity and consequently earn more. Information centres should be opened at the block level to provide information on less time-consuming farming techniques, marketing and opportunities in the non-farm sector.