Processes of Diversification of Rural Economy— A Pioneer Approach Dealt for Doctoral Research on Kangra Farms

Thesis advocates rural diversification for solving the problems of rural unemployment, poverty, and hunger. The study was undertaken in Kangra valley of Himachal Pradesh. Two developed blocks form the developed category and two backward blocks form the backward category were selected on the basis of infrastructural as well as agrarian related variables for the study. Two stages stratified random sampling with stratification, on the basis of index of crop acreage diversification using Entropy index, at second stage was employed for the selection of villages and households. Both primary as well as secondary data was used in this study. Commensurate with the objectives of the study, data were analyzed using suitable statistical techniques. The results have shown that diversification of crops, measured by Herfindhal and Entropy indices, were higher in more-diversified farms. In the overall farm analysis, crop diversification is higher under developed agriculture than in backward agriculture whereas reverse is observed for income diversification. This clearly shows that income diversification is no guarantee for increasing total household income. The extent of income diversification is higher in less-diversified farms than in more-diversified farms of developed category. In contrast, diversification of income is higher in more-diversified farms of backward category. A pioneer work has been done to examine the impact of diversification on income, consumption and poverty. In this context, the household income was highly diversified in backward category but the level of total household income was significantly lower as compared to developed category, where low level of diversification is associated with high level of income, pointing towards the prevalence of distress diversification. So far as the relationship between the extent of diversification and poverty is concerned, there was systematic relation with crop diversification, but it was not found to be systematic with income diversification. The thesis has identified and analyzed the problem of rural diversification and suggested solution to accelerate the process of diversification in Kangra valley of Himachal Pradesh. Specifically, the policy should be that emphasis on diversification of rural economy shall yield no dividend unless efforts are made to improve the productivity of the existing resources and attending to problems like marketing, credit facilities and technical know-how.