The impact of crop diversification on the economic welfare of agricultural households in eastern India

Diversifying towards high-value crops can enhance the economic welfare of farmers in eastern India, a backward region with much under-utilized agricultural potential. Using data on farm households and advanced matching estimation methods, and indicators such as farm income, consumption expenditure and poverty status, this study analyses the major determinants and impact of diversification towards high-value crops. We find that diversification towards high-value crops does indeed play a significant role in enhancing farm income, consumption expenditure and reducing poverty. For income enhancement and poverty reduction to be significant, however, at least 40% of the area must be allocated to high-value crops.