Factors affecting crop diversification: Evidence from district Faisalabad, Punjab

Crop diversification is usually regarded as a change from traditionally grown less remunerative crops to more remunerative crops. It aims to increase the production and lessen the risk by providing broader choice to farmers by producing a variety of crops in a particular region. The present study was aimed to determine the extent of diversification, explore the major factors affecting crop diversification and conduct an economic comparison between traditional and diversified farmers. The data were collected from randomly selected 120 farmers in district Faisalabad through comprehensive questionnaire. The gross margins of diversified and non-diversified farmers were compared. The extent of diversification was predicted by Entropy Index and multiple regression model was applied to determine the factors contributing towards crop diversification. The survey revealed that market conditions, weather and mainly the demand of the commodities are the leading risk factors in agriculture sector, which results in variation of farm income that may change the decision of farmer. So, crop diversification is generally considered as risk controlling approach that allows a farmer to involve in cultivation of more than one crop. The analysis through Entropy Index reported that mean diversified and non-diversified farmers in the selected area were 35.83 and 64.17 percent correspondingly. The average gross income of diversified farmers was found to be higher than the non-diversified farmers. Regression analysis depicted that significant factors influencing diversification were size of land holding, level of education, off farm income, distance of farm from main road and dummy for farm machinery. On the basis of results, it was suggested that farmers should not rely on single crop and they ought to modify their decisions towards crop diversification. As, this could substantially increase the income of farmers, subsequently the well-being of farming community.