Determinants of Income Diversification among Dairy Farm Households in Tamil Nadu

Dairy farming is the subsidiary occupation for millions of farmers in India. Due to risks and uncertainties in rainfed areas, crop production alone was not much remunerative. Diversifying dairy with the crop and allied activities would generate better income, nutritional security, and regular employment to the farming community and ensure risk reduction. This study investigates the extent and determinants of income diversification among dairy farm households in Tamil Nadu using the Simpson Index of Diversity (SID) and the Tobit regression model. Primary data were collected from dairy farm households during the year 2021-22. The results show that two-thirds of the total household income was shared by on-farm income and the remaining one-third by off-farm and non-farm activities to the total household income. Simpson Index of Diversity (0.38) indicated that the households were diversified with milch animals, but the degree of the diversification was low since high degree of diversification requires more labour and high cost. Further, education, family size, landholding size, herd size, proximity to agricultural or allied industry, access to credit, and membership in farmer producer organizations were the important determinants of income diversification. This study indicates that farm households should adopt a concentric approach that requires targeted research, information dissemination, infrastructure development, and agricultural technical institution establishments to boost income diversification and livelihood.