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Crop diversification and risk: an empirical analysis of Indian states


  • Mukherjee, Sanchita


The current study explores relationship between the crop diversification and risk in India. Herfindahl Index has been used to analyse the level of crop diversification across the major states over the period of study. An effort has been made to compute yield risk and price risk of each state using the Markowitz's Mean-variance theory and map it with the crop diversification for the corresponding states. Result shows that, while the relationship is positive in the case of crop-diversification and yield risk, we cannot conclude the relationship between crop diversification and price risk.

Suggested Citation

  • Mukherjee, Sanchita, 2010. "Crop diversification and risk: an empirical analysis of Indian states," MPRA Paper 35947, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:35947

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    References listed on IDEAS

    1. Rao, P. Parthasarathy & Birthal, P. S. & Joshi, P. K. & Kar, D., 2004. "Agricultural diversification in India and role of urbanization," MTID discussion papers 77, International Food Policy Research Institute (IFPRI).
    2. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    3. Firdu Gemech & Sushil Mohan & Alan Reeves & John Struthers, 2011. "Market-Based Price-Risk Management: Welfare Gains for Coffee Producers from Efficient Allocation of Resources," Oxford Development Studies, Taylor & Francis Journals, vol. 39(1), pages 49-68.
    4. Birthal, Pratap Singh & Joshi, P.K. & Roy, Devesh & Thorat, Amit, 2007. "Diversification in Indian agriculture towards high-value crops: The role of smallholders," IFPRI discussion papers 727, International Food Policy Research Institute (IFPRI).
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    More about this item


    crop diversification; farm risk; yield risk; farm price risk; agriculture risk;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General


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