The Impact of Rainfall Variability on Occupational Diversification of Farm Households In Rural Assam

Occupational diversification from farm to the rural non-farm sector (RNFS) has become a major livelihood option in rural India. Among the various factors affecting diversification, the impact of changing climatic condition has become a prime cause of concern. Although its impact is felt everywhere, yet the state of Assam being not only prone to frequent floods and soil erosion, is also heavily dependent on rainfall for irrigation. Therefore, any change in climatic condition is likely to affect farm output and income immensely. Further, growth of the RNFS is also highest in Assam compared to other North-Eastern states which points towards a plausible link between climate change and occupational diversification. The present paper is an attempt to empirically analyse this relation between rainfall variability and farm household’s diversification strategy where not only the decision of diversification but also its intensity is studied. To fulfill the objective, a Double Hurdle model is applied where we found that farm households adopt a diversified livelihood as a response to mitigate risks associated with rainfall variability. They also increase their participation in non-farm employment where more working members shift to this sector as risk reduction strategy. Even in the presence of irrigation intensity, farm households’ likelihood to engage in non-farm activities is still positive. Therefore, policies should focus on infrastructural development that is likely to facilitate easy access to farm inputs and also accelerate growth of the RNFS as well.