ANNOUNCEMENTS
The Bikaner district in the Thar Desert has witnessed significant ecological transformation due to increasing monsoon rainfall in recent decades, up from an average of 225 mm in the early 20th century to over 300 mm in recent years, enabling new agricultural possibilities. This study investigates how heterogeneous crop enterprise structures (ES) influence the profitability of diversification and identifies the socio-economic and institutional factors motivating farmers to diversify. Using primary data from 140 farmers, the analysis applies gross margin comparison, OLS regression, Herfindahl index comparison, and qualitative content analysis.
The Herfindahl Index (HI) shows that farms in Bikaner are moderately to highly diversified in rabi season (HI ≈ 0.26). However, regression results reveal that HI is statistically insignificant and even shows a small negative effect on both gross margin and crop revenue.. This suggests that simply having more crop variety does not guarantee better profits.
To better understand this, the study uses an enterprise structure (ES) approach, which groups farms based on the actual crop combinations they grow. 18 such combinations were identified. Unlike the HI, some of these ES combinations had a strong and positive impact on both profitability and revenue and some showed negative effect. The most profitable combinations included Wheat, Mustard, and Isabgol in the Rabi season and Groundnut, Cotton, and Guar in the Kharif season in .their ES.
The study concludes that crop diversification alone is insufficient; rather, the type and structure of diversification matter. Profitability hinges on selecting crops suited to local ecological conditions and market access. Policy recommendations include strengthening canal and solar-based irrigation, promoting profitable crop mixes through extension services, and enhancing rural institutions to support farmers in risk-reducing diversification.
