Economic Analysis of Non-Farm and Off-Farm Income Sector: A Way Ahead in Making Farmers Income Profitable

Abstract

Income diversification is an important strategy to augments income among small and marginal farmers. This study evaluated the income diversification among farm households in the Ariyalur district. A multi-stage sampling technique was used, and 115 rural households were selected by applying Arkin and Colton formula. The data collected were analyzed using the Herfindahl index and Gini-coefficient. The results showed that the average number of income sources accessed by all marginal farmers is about 1.81, and small farmers are about 1.90, and small farmers had an income diversification range of 0.64 to 0.65, which is a medium diversification category. When the non-farm and off income were considered together with agricultural income, the overall income inequality dropped. The results suggested that the local government should take serious steps to create employment avenues for smallholders outside agriculture that provide credit, training, and necessary inputs to rural households and recommended for public investment in rural infrastructures, such as roads and bridges, telecommunications, education, energy, and water.