Augmenting Small Farmers Income Through Rural Non-Farm Sector: Role of Information and Institutions

The paper discusses the nature and extent of non-farm activities in India using India Human Development Survey unit record data. An exercise carried out to understand the determinants of income from non-farm activities using a Tobit regression model, shows that the households who could avail larger size loans (for any purpose including agriculture) or insurance from financial institutions and have access to information and networks are the ones who could get higher non-farm income. As the credit for non-farm activities per say is rather limited, it can be inferred that higher level of credit for even farm activities can help non-farm sector as well possibly through production linkages.