Lack of education and skills, lack of credit, and poor access to social capital prevent farmers from taking up jobs beyond agriculture, even if farming does not provide them with a reliable means of livelihood, a study shows. Indian Institute technology (IIT) Madras.
Researchers have identified barriers to entry for rural communities into non-farm occupations. The researchers studied the problems associated with the Indian rural economy. Specifically, he analyzed the reasons why farmers do not take up non-farm jobs even when agriculture does not provide them with a reliable means of livelihood.
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They also showed that agricultural income and land wealth have a negative effect on diversification, and that family size has a positive effect on rural community participation in non-farm activities.
The researchers called on regional rural banks to allow micro-financing and holistic finance services to remove financial barriers to rural employment diversification. An IIT Madras study suggests that increased information flow through access to telecommunication devices such as mobile phones can raise awareness among the rural community about the benefits of non-farm businesses, thereby enabling participation .
The research was carried out by Dr. Sabuj Kumar Mandal, Associate Professor (Economics), Department of Humanities and Social Sciences, IIT Madras and his student Anviksha Dral, PhD Research Scholar, IIT Madras. Their research has recently been published in the prestigious peer-reviewed international journal World Development.
Speaking about the key findings of this study, Dr. Sabuj Kumar Mandal, Associate Professor (Economics), Department of Humanities and Social Sciences, IIT Madras, “Income flow to agricultural households is declining due to imperfect credit and insurance markets, prevalent in rural India. It has long been recognized that diversification of rural livelihoods into non-farm activities is an important strategy to ensure that rural households maintain a minimum level of income. Trade and hospitality, construction, transport , and education and health are the top four sectors that contribute to non-farm rural jobs in the country.
The agriculture sector, the backbone of the Indian economy, has faced low growth rates in recent years. According to the 10th Agriculture Census, the average size of agricultural land declined to 1.08 hectares in 2015-16 from 1.15 hectares in 2010-11. It has been the result of retrograde weather uncertainties, land fragmentation, price fluctuations, soil erosion, waterlogging and rapid population growth.
Elaborating further on this study, Anviksha Dral, PhD Research Scholar, IIT Madras said, “The advantage of diversifying into the non-farm sector is that income from these sectors can be diverted to agriculture without the risk of livelihood loss. This not only helps the rural community to remain solvent or profitable but also helps in increasing agricultural production in the country. Despite the promise, the average Indian farmer is hesitant to enter the non-agriculture sector and the poverty And trapped in a vicious cycle of debt.”
To identify barriers to entry of rural community into the non-agricultural sector, Dr. Sabuj Kumar Mandal and Anviksha Dral conducted a modeling study using household level panel data on Indian states belonging to semi-arid tropical and eastern regions. did. He created a theoretical framework that decided the allocation of home time between three activities—agricultural work, non-farm work, and leisure.
“Our empirical findings indicate specific policies that should be implemented to increase the participation of rural households in non-farm activities,” said Dr. Sabuj Kumar Mandal.
These policies should aim to increase access to education, credit and social capital. Researchers at IIT Madras recommend rigorous implementation of existing educational policies such as Samagra Shiksha and training programs such as the Deen Dayal Upadhyaya Grameen Kaushal Yojana.
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