This paper has examined farm households' access to different income-generating activities, and their impact on income distribution using data from a nationally representative large-scale survey. The analysis has shown that, as against the common perception of agriculture being the dominant source of income for farm households, these households earn close to half of their income from non-farm activities. The nonfarm income is more important for the households at lower end of land distribution. The poor households diversify more towards low-paid, low-return non-farm activities. Small landholdings, low agricultural productivity and surplus labour force the farm households to diversify their income portfolio towards non-farm activities. The non-farm income sources are accessible to a small proportion of farm households and have un-equalizing effect on income distribution. Nevertheless, non-farm sources are positively correlated with the total income. This contrast in income sources between income level and farm size suggests that non-farm sector can serve as potential entry points for land-constrained farm households to enhance their income level.
The study is undertaken to analyze the farm household income, income sources, economic inequality, and determinants of income of farm households in Bihar which is based on five-year panel data (2010–11 and 2014–15). Findings of the study show that the income level of farm households in the selected villages of Bihar is low, but exhibited an impressive annual growth rate of 6% from 2010–11 to 2014–15. The income level showed a positive relation with the size of landholding. Further, the sources of household income are quite diverse, and cultivation contributes only one-fourth to the total income of farm households. The level of remittances showed signs of decline, while the share of transfer payments and non -farm activities increased from 2010–11 to 2014–15. Inter- and intra-class inequality in farm household income is also prominent but diminishing with time. Farm assets, diversification, and education level have turned out to be important drivers of farm household income. These findings have significant implications and call for holistic rural development strategies for enhancing farmers’ income.
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