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description Journal article public Economic Affairs

Urbanization and its Impact on Production Diversity and Income of Farm Households: An Economic Analysis Across Rural-Urban Interface of Bengaluru

Udaykumar, M.S
Published 14 December 2020

Abstract

The study was conducted in North of Bengaluru with an aim to analyze effect of urbanization on production diversity, farm income and factors influencing the same across the rural-urban interface. The required data was collected randomly from 80 farmers each under rural, transition and urban gradients. Multiple linear regression was used to determine the drivers of farm income. Herfindahl index was employed to capture the extent of production diversification. Results revealed that the rural farmers diversified from food crops to vegetable and flower crops over the years. Whereas, farmers of transition and urban gradients chose to grow high value horticulture crops instead of food crops. During 2019, the extent of diversification was more in transition (0.21) and rural (0.25) gradients compared to urban (0.29) gradient. In rural gradients, the major share of farm income was from cereals (31.79 %) followed by vegetables (28.65 %) and perennials (17.88 %) in 2014 but the major share was replaced by vegetables (28.69 %) and flower crops (19.98) in 2019. In transition and urban gradients, the major source of farm income was from vegetables in 2014 which was later substituted by fruit crops in 2019. Over the period of five years, the percentage increase in average farm income of households was highest in urban gradient (143.07 %) followed by rural (140.15 %) and transition (110.50 %) gradients. Land holding size, education, borrowed capital and investment in farming emerged as the principal determinants of farm income. As a whole, the study concludes that, urbanization led investment on high value crops through crop diversification which played a significant role in augmenting the farm income.

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