Households’ Choices and Their Drivers to Rural Non-Farm Livelihood Diversification in West Bengal, India

Abstract

There are inadequate empirical studies on non-farm livelihood choices of rural households in the state of West Bengal, India. This study aims to explore the determinants that effect the choice of households to engage in non-farm economic activities. The present study found that non-farm livelihood diversification factors are more heterogeneous and mainly depend on households’ strategic decisions. A household’s choice of non-farm livelihood activity is determined by binary aspects opportunity-driven versus distress-driven, but it is a complex transformation phenomenon. It has been noticed that within the non-farm livelihoods, share of wage labour (38.3%) is higher, followed by non-farm businesses (19.8%), service providers (18.0%), and salaried jobs (3.4%). The location and distance to the town from the households, food insecurity, and agricultural land size are more influential and statistically significant factors in choosing non-farm livelihood practices. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has negatively impacted rural non-farm livelihood activities. There is an 18% and 39% probability of reducing non-farm business and services compared to the increasing MGNREGA work opportunities. Moreover, the likelihood of non-farm business choices has increased by 56% due to rainfall and temperature-change-induced disasters.

Drivers of Rural Non-farm Sector Employment in India, 1983–2019

“…In fact, an interplay of complex socio-economic and cultural factors restricts their non-farm sector work participation in rural India (Mehrotra & Parida, 2017). Lanjouw and Shariff (2004), Lanjouw and Murgai (2009), Kapoor et al (2021), Shah and Pattanaik (2021), Ghosh and Ghosal (2021), Kapoor and Kapoor (2021) and Pattayat et al (2022) have examined the role of rural non-farm sector employment on household-level income and on the incidence of poverty. These studies have found that non-farm sector employment has a positive implication on household income growth and, hence, is likely to reduce the extent of household poverty.…”

“…Furthermore, discussion on the quality of non-farm sector jobs (Agarwal & Goldar, 1995; Bhattacharya & Mitra, 1993; Chand, 2001, 2003 Deshpande, 1992; Jha, 2006; Raj & Sen, 2012; Visaria, 1995), issues on stagnant real wages (Mehrotra & Parida, 2019, 2021; Venkatesh, 2013), gender composition and skill constraints (Davis & Bezemer, 2003; Dhara & Chatterjee, 2017; Jatav & Sen, 2013; Kapoor et al, 2021; Mehrotra & Parida, 2017; Neetha, 2014; Pattanaik & Nayak, 2014; Sapkal & Sundar, 2017), its role in poverty reduction (Ghosh & Ghosal, 2021; Lanjouw & Murgai, 2009; Lanjouw & Shariff, 2004; Kapoor & Kapoor, 2021; Kapoor et al, 2021; Pattayat et al, 2022; Shah & Pattanaik, 2021), etc. are well explored by the existing body of literature.…”

Determinants of Livelihood Diversification of Farm Households in Rural India: Evidence From National Sample Survey

“…Many researchers (Bhalla, 2002;Himanshu et al, 2011Himanshu et al, , 2013Lanjouw and Lanjouw, 2001) found that the growth of non-farm activities and changing structure of rural livelihood played a major role in poverty reduction in the country. However, rural livelihood diversification is not impressive enough in India when compared to the experience of developed countries (Ghosh and Ghosal, 2021). The ongoing debate in India also holds that the growth of non-farm livelihood activities is largely distress-driven in the country (Abraham, 2009;Binswanger-Mkhize, 2013;Jatav and Sen, 2013).…”