DIMENSIONS AND DETERMINANTS OF DIVERSIFICATION ON KANGRA FARMS OF HIMACHAL PRADESH: AN EMPIRICAL ANALYSIS

Diversification of agriculture is considered essential to minimise the risk of crop failure, earn foreign exchange, alleviate poverty, and to make optimum use of slack resources. This study was based on primary as well as secondary data collected from a sample of 120 farmers. A three stage stratified random sampling was followed in drawing the sample cultivators. To study the magnitude of crop, income and employment diversification, Herfindhal and Entropy indices were calculated. The multiple linear regression models were estimated to study the factors affecting crop, income, and employment diversification. The results revealed that for crop acreage and income diversification, large farms had more diversified cropping pattern and income structure than small farms of both irrigated as well as unirrigated areas. In the overall farms analysis, un-irrigated areas were found to be more diversified in terms of number of crops than irrigated farms, whereas reverse was observed for income diversification. For employment diversification, large farms had more diversified employment pattern than small farms of irrigated areas, while reverse was observed for un-irrigated areas. In the overall farms situation, the pattern of employment was found to be more diversified, in un-irrigated areas than in case of irrigated areas. The regression results for the determinants of income diversification inferred that both the economic factors such as size of operational holding, number of fragments of holdings, dummy variable for bullock and the extent of tenancy as well as social factors like family size and age of the head of family were found to be significant factors, irrespective of farms categories, for explaining the process of income diversification, in both irrigated as well as un-irrigated agriculture. While family size, age and education level of the head of the family, size of operational holding, gross farm income and dummy variable for bullock were found to be the important determinants of off-farm income diversification in both irrigated as well as un-irrigated agriculture, irrespective of the farm categories.