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Indian Institute of Technology Madras (IIT-M) researchers have identified the barriers to entry of rural communities into non-farming occupations. The researchers studied the problems associated with the rural economy. In particular, they analysed the reasons for farmers not adopting to non-farming jobs even when agriculture does not provide them with a reliable means of sustenance.
The researchers found that lack of education and skill, credit constraint and poor access to social capital were the predominant entry barriers into the non-farming sector. They also showed that farm income and land assets have a negative influence on diversification, and household size has a positive impact on the participation of the rural community in non-farming activities.
The researchers called for Regional Rural Banks to allow micro-financing and composite finance services to remove the financial barriers to rural job diversification. The IIT Madras study shows that increasing the flow of information via access to mobile phones can enhance awareness about the benefits of non-farming occupations among the rural community, thereby enabling participation.
The research was undertaken by Sabuj Kumar Mandal, Associate Professor (Economics), Department of Humanities and Social Sciences, IIT Madras, and his student Anviksha Drall, PhD Research Scholar, IIT Madras. The understanding gleaned from their research has recently been published in the reputed peer-reviewed international journal World Development (https://doi.org/10.1016/j.worlddev.2020.105381).
Falling income
Mandal said that flow of income into agricultural families has been dwindling due to imperfect credit and insurance markets, prevalent in rural India. It has long been recognised that the diversification of rural livelihood into non-farm activities is a key strategy to ensure that rural families maintain a minimum level of income. Trade and hospitality, construction, transport, and education and health are the top four sectors that contribute to the non-agricultural rural jobs in the country.”
‘Policy drive must’
“Our empirical findings indicate the specific policies that must be implemented to increase the participation of the rural household in non-farming activities,” said Mandal.
These policies must be aimed at increasing access to education, credit, and social capital. The IIT Madras researchers recommend rigorous implementation of existing educational policies like Samagra Shiksha and training programs such as Deen Dayal Upadhyaya Grameen Kaushal Yojana, the release said.
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