IMPACT OF DIVERSIFICATION ON HOUSEHOLD INCOME AND RISK - A WHOLE-FARM MODELING APPROACH

Despite the progress made in agriculture reflected in a record food grain production largely through a technological revolution, vast areas under dryland agriculture have not still moved away from the cyclical pattern of peaks and troughs in output. This patter n has to be changed for sustained growth; and accelerated development. Diversification of farming into livestock rearing provides an opportunity to augment farm income and to reduce income risk, particularly in dryland areas where income from crop husbandry is unstable. This study is based on the time series cross-section data drawn from village level studies project of ICRISAT, hyderabad, India in the dryland tract of peninsular India. The risk efficient plans are derived using a quadratic risk programming model. The model results suggest that raising of milch animals on the farm not only increases the level of expected level of income but also reduces the magnitude of income risk.