Diversification and determinants of income sources among agricultural households in south coastal region of Andhra Pradesh state

The diversification of income sources is driven by various factors, such as landholding, operational holding, farm assets, age, education, farming experience, access to insurance, credit, irrigation, market facility, price information etc. Ogive index (OI) and Herfindahl-Hirschman index (HHI) were employed to investigate the diversification of income sources among agricultural households and Seemingly Unrelated Regression Estimator (SURE) model was used to identify factors which help in distribution of income among various sources. For the present study, primary data on agricultural households were collected through personal interview method for the agricultural year 2018–19 from South Coastal region of Andhra Pradesh. The present study results concluded that the average net income of overall agricultural household was f 34,321 per month. Except marginal and small farmer households, remaining categories of households received more than 60 per cent of income from cultivation with the 40 per cent of income distributed among other income sources. The medium and large farmer households showed higher OI and HHI values compared to other landholding categories. The higher diversification index values represent greater specialization towards single income earning activity, i.e., cultivation. The size of landholding, size of operational holding, age of household head, years of education, family size, total animals, non-farm income earning members, access to insurance and credit were the major determinants to earn more income from various income sources in the study area. The policy initiatives may be directed towards emphasis on intensification of high value crop cultivation, animal husbandry and the diversification of income sources towards non-farm business activities especially for marginal and small farmer households.