Does ‘Space’ Have a Say on Agricultural Households Income Choices?

Abstract

In line with the first law of geography, employment diversification take place in clusters-as 'hot spots' and 'cold spots'. Farm households organise themselves on economic activities in part based on their neighbourhoods' preferences. In other words, neighbourhoods tend to be clusters of households with similar preferences. Part-time-farming approach, which is being felt across states in recent times, is no exception. In a farm-non-farm policy perspective, these 'hot' and 'cold' spots attract significant attention as specific agricultural/industrial policies can be brought out at these clusters than any aggregate levels. The study, of its first kind for the country, attempts to locate potential 'rural hot spots' where this 'priority shift' of farmers takes place, especially of the vulnerable small holder households who lack capital assets to sustain their farm based livelihood. Spatial econometric approaches are adopted and Global and Local Indicators of Spatial Association (LISA) are used in filtering out these 'hot' and 'cold' spots. Results reveal that high income households live in general at south Indian and selected parts of north and west Indian regions. Income clusters extend beyond states' boundaries, and not all the districts within a state fall in any given income group. The 'hot spots' of income diversification lie in southern and western regions and the central Indian region is characterised with 'cold spots' rather than 'hot spots'. The scenario holds true when marginal and small farmers alone are considered, but varies with exposure to vulnerability factors. In presence of vulnerability, the 'cold spot' clusters turn to be random, not confined to any given region. The results suggest for 'cluster approach' rather than 'state approach' in devising farm and non-farm policies for the farmers.