Agricultural Diversification and its Impact on Farm Income: A Case Study of Bihar

This paper has assessed the diversification scenario of agriculture at the national level and its reflection at farm level situation alongside. It has been observed that concentration ratio (CR4) for four major agricultural sub-sectors has declined from 73.6 per cent to 69.6 per cent for the study period, 1999–00 to 2013–14. It clearly indicates a shift in Indian agriculture from cereals-based production pattern to other high-value based production pattern. However, Simpson Index for Diversification (SID) indicates that the average national SID for all agricultural enterprises is 0.83 which spans from 0.60 for Punjab to 0.89 for Karnataka. Relating it to farm level situation, the primary survey in Banka and Bhagalpur districts of Bihar has been carried out in 2016–17 to find out the impact of agricultural diversification on farm income with two-stage least square technique (2SLS). Empirical analysis has suggested that diversification of farm by adopting ancillary, horticulture and other HVE like mushroom, etc. will increase farm income.