Abstract
Entrepreneurial ventures potentially offer a way out for farmers facing stagnant livelihoods in drought-ridden farming. We develop a model where entrepreneurial success of marginal farmers is linked to their ability to overcome the challenges posed by the existent socio-economic and environmental inequalities. Farmers with lower socio-economic status receive an unequal share of irrigation water from common reservoirs, which impedes their ability to accumulate financial capital and start an enterprise. Findings suggest that less endowed farmers could end up inefficiently dedicating resources towards reducing social inequality through a process of social friction, which adversely affects their livelihood prospects. When both farming and entrepreneurial ventures are prone to failure, farmers may stay within farming for longer despite higher failure risk. When agricultural exit risk is higher and enterprise failure risk lower, farmers are forced to invest more time in farming and mitigating such risks, which, in turn, delays their success in business.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.