Income Diversification as a Strategy for Agrarian Crises Management: A Case Study of Assam

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Jahidul Haque
NISSAR AHMED BARUA

Abstract

Objectives: Economic diversification is an integral part of economic development which indicates the structural transformation of the economy. A diversified economy is characterized by multiple activities instead of one line of production. Such diversification is induced by the ”push” of low farm income and the ”pull” of higher wages and incomes in the manufacturing and services sectors. The agricultural sector of Assam confronts recurrent crises brought about by a host of environmental and non-environmental vulnerability that adversely affects production. Income diversification in the rural economy may be one possible strategy to cope with such predicaments. This paper seeks to determine the nature and extent of the agriculture crisis in rural Assam and how the process of income diversification can be potentially used as a strategy to manage such constraints. Methods: The study is based on primary data which have been collected from the three-sample district of Assam. The Income Diversification Index is constructed to measure agricultural crisis management using measures like Income Dependency Ratio and Average Income Sources. Findings: It is evident that rural Assam is experiencing a recurring agrarian crisis that is emanating from various natural as well as market-related factors. Evidence from the three sample districts reveals that stakeholders have sought to protect their livelihood from the vagaries of nature and of the market through a strategy of diversification. Primary data have established that diversification indicated by the Income Diversification Index tends to reduce the vulnerability of the households to imminent agrarian crisis. The success stories of the three sample districts which have exhibited significant diversification in the sphere of fishery, horticulture and dairy farming, offers sound evidence that a strategy of rural diversification can be prioritized for averting and managing agrarian crisis that recurrently plagues the rural sector. Novelty: The study establishes that rural income diversification through the development of fishery, horticulture and dairy farming had been used as successful strategy to manage and mitigate recurrent agrarian crises which had characterized the rural economy of Assam.

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Articles