Effect of Non-farm Employment on Farm Commercialization

The paper investigates how non-farm employment affects commercialization of agriculture in rural agricultural households in India. The data for the study was drawn from a nationally representative sample collected by NSSO through Situation Assessment Survey 2013. Regression Adjustment (RA) treatment effect model was used to measure the effect of household's participation in non-farm employment on the marketed surplus of cereals, pulses, and oilseeds. Results show that household's participation in non-farm employment has a significant negative influence on agricultural commercialization of cereals and oilseeds. The results also infer that farm households use additional income from non-farm activities for non-agricultural consumption purpose. Though the results are found to be similar to previous empirical studies, the relative difference in marketed surplus was lower and was only 9 percent in case of cereals and 2 percent in case of oilseeds. The study concludes that the engagement of households in the non-farm sector would push those households away from agriculture as a commercial activity.