11 Crop Diversification in

Odisha: An Empirical
Assessment

Chittaranjan Nayak and Chinmaya Ranjan Kumar

I. Introduction
Indian agriculture sector is facing various problems. On the one hand, growing
population, increasing urbanisation and industrial activities are squeezing land
availability for agriculture, on the other hand, climate change, tardy growth in rural
infrastructure has also confined Indian agriculture from the supply front. Apart from
these challenges trade liberalisation and changing consumption pattern have brought
new challenges for Indian agriculture. During the Green Revolution period, both price
and non-price factors including provision of basic infrastructure were part of a compact
strategy for India’s agricultural growth. However, the development policy since economic
reforms in 1991 has squeezed the scope for price factors. The state has made it obligatory
to delimit its own role in the WTO-led globalised agriculture. In this backdrop, what
seems paramount to raise productivity and sustainable agriculture in Indian context is
to rely heavily on crop diversification. Diversification of agriculture may help to
overcome these overriding problems of Indian agriculture.
Agricultural diversification is defined not just as the development of greater
variety of crops and livestock within space and time but also a movement of resources
from low value agriculture to high value agriculture. It is considered as an important
indicator of agrarian development in India. According to Kumar and Mittal (2006),
‘Diversification or crop shift is a new paradigm of growth’ and becomes a necessity for
the survival of agriculture in rural area. It is also recognised as the powerful strategy to
counter the emerging agricultural challenges in the country and it can be used as a tool
to boost farm income, generate employment, alleviate poverty and conserve precious
soil and water resources.’
Diversification in agriculture is generally of two types i.e. horizontal diversification
and vertical diversification. Horizontal diversification refers to a shift from subsistence
farming to commercial farming or the shift from low value food crops to high value
 Crop Diversification in Odisha: An Empirical Assessment 165

crops i.e. changes in cropping pattern and vertical diversification refers to the farmer’s
access to non-farm income or the income from non-agricultural sources i.e. agriculture
and allied activities like animal husbandry, fishery, etc. (Haque, 2010).
Agricultural diversification can be influenced by a number of forces both from the
demand-side and the supply-side. The demand side forces of diversification include
per capita income, urbanisation, call from national and international markets. It shows
the effect of trade on structural changes in the production of agricultural commodities.
When the relative prices of various commodities increase after trade liberalization
farmers are encouraged to start more of the non-farm commodities. On the supply side,
diversification is largely persuaded by relative profitability, improvement in rural
infrastructure, technology adoption, resource endowments, socio-economic variables
like literacy rate, various credit and insurance institutions and promoting exports to
stimulate growth in agriculture.
Diversification signifies at least the following four aspects of farm economy. One,
farmer’s adaptability with market signals. In India, unlike many industrial products,
most of the agricultural products are inelastic in supply. This means such products do
not much respond to the market signals. In the WTO-led globalised regime, which has
already brought agriculture to its ambit, Indian farmers will remain a disadvantaged lot
due to lack of adaptability with market signals. Diversification is an indicator showing
the degree of such adaptability. Two, farmers ability to reduce risk and vulnerability.
Most of risk, uncertainty and vulnerability in farm sector are observed in production
and marketing. Crop diversification recedes such risks. Three, progress of the farm
economy towards self-reliance. Despite the fact that Indian economy still continues to
be an agro-based economy, the country is importing a number of agricultural products
like pulses and oil seeds. If agriculture is diversified, then such import dependence can
also be arrested. Four, diversified farming systems incorporate functional biodiversity
at multiple temporal and spatial scales to maintain ecosystem services critical to
agricultural production. Sustainable growth of the agriculture depends considerably
on the process of agricultural transformation, which in turn is well connected with
shifts in production patterns i.e. on the extent of crop diversification. The importance
of crop diversification becomes more pertinent particularly as a strategy to reduce
inconsistency in agricultural production and yield (Rahman, 2009).
Given the importance of crop diversification, the question arises what are the
determinants of diversification, and how do they impact. A survey of existing literature
categorises the determinants of diversification as follows (Hazra, 2001): a) Resource
related factors covering irrigation, rainfall and soil fertility, b) Technology related factors
covering not only seed, fertilizer and water technologies but also those related to
marketing, storage and processing, c) Household related factors covering food and
fodder self-sufficiency requirement as well as investment capacity, d) Price related
factors covering output and input prices as well as trade policies and other economic
policies that affect these prices either directly or indirectly, and e) Infrastructure related
factors such as electricity, transport, tele-connectivity, cold storages, food processing
units and agro-based industries etc. that greatly reduce the agro-climatic disparity in
growing crops across regions. f) Institutional related factors covering farm size and
tenancy arrangements, better inputs, substantial flow of credit and insurances, adoption
166 Agrarian Distress and Farmers’ Suicides in India

of latest technology, research and extension, government and private enterprises in

marketing systems i.e. farmer mandi and government regulatory policies.
In this backdrop this paper attempts to analyse the extent of diversification across
the thirty districts of Odisha, and explore its determinants. The present study is
important at least from the following two angles: One, although some scholars have
attempted to study diversification in macro context, very few works are available at
disaggregated level. A study in the context of Odisha is imperative because this eastern
Indian state which was confined to traditional cropping pattern has recently made
some foray into the national scene. The state has received Krishi Karman Award for the
fourth time for record food grain production in the last five years (upto 2016) in the
Category II states. Two, despite some efforts in foodgrain production, the crop diversity
is very minimal in the State though some efforts have been initiated in some parts of the
State. Some farmers are adopting floriculture, onion, turmeric and mushroom cultivation
as a diversification away from traditional crops. A question arises whether or not the
diversification in crops is complemented by appropriate market linkages and
infrastructure?
The remainder of the paper is organised as follows: Section II presents a brief
review of literature. The data and methods are described in Section III. Section IV
analyses the results, whereas Section V concludes the major findings.
II. Review of Literature
Sustained economic growth, increasing population and changing lifestyles are
causing significant change in Indian food basket, away from staple food grains towards
high-value horticultural and animal products (Kumar et al., 2007; Mittal, 2007). Rise in
per capita income accompanied by rapid urbanisation, and globalization, better
infrastructural facilities and changes in tastes and preferences are diversifying the
consumption basket in favour of high-value foods, such as fruits, vegetables, milk,
meat, eggs, and fish. Even the poor are consuming more of high-value food commodities
(Kumar and Mruthyunjaya, 2002).
While agriculture continues to have excessive employment pressure, past trends
indicate limited opportunities for a rapid transfer of labour to non-farm sectors (Chadha,
2008). With a tardy shift of labour toward non-farm sectors, within agriculture, crop
diversification out of staples toward high-value crops (HVCs) is one of the alternatives
that can augment income, generate employment, and reduce poverty (Ali and Abedullah,
2002; Barghouti et al., 2004; Birthal et al., 2013; Joshi et al.). Achterbosch et al. (2007)
and McCulloch and Ota (2002) find that HVC growers are relatively better off. Also it
has been reported that the shift in land area from cereals to vegetables, in particular,
has enhanced employment opportunities in rural areas. (Joshi et al. 2007; Joshi et al.
2004, 2006; Vyas 1996).
Production of high-value commodities is demand-driven, determined mainly by
rising income and urbanisation (Joshi et al, 2004 and Rao et al., 2006). Other factors,
which influence their production on supply side, are improvements in infrastructure
(specifically roads and markets) and technology (relative profitability and risk in different
commodities) (Joshi et al, 2004). A study by Joshi et al. (2006) has tried to decompose
the sources of agricultural growth into area, yield, prices, diversification and interaction
 Crop Diversification in Odisha: An Empirical Assessment 167

effects. It observes that the major contributors to agricultural growth in India are prices
and diversification (crop substitution). The contribution of prices has increased from
7.7 to 35.2 per cent, whereas the share of diversification in total growth has increased
from 26.6 per cent during 1980s to 30.7 per cent during 1990s.
In India, crop diversification is taking place at a faster pace since 1990s. It is
viewed as a shift from traditionally grown less remunerative crops to more remunerative
commercial crops. In fact, it can be considered as a kind of commercialization of Indian
agriculture. The share of area under non-food grains went up from 30 per cent in
triennium (TE) 1981-82 to 35 percent in TE 1998-99 (Joshi, 2010). Crop diversification
has helped in employment generation and income augmentation, poverty alleviation
through export promotion.
The study of Banerjee and Bhattacharya (2015) argues that crop diversification
helps to maximise the utilisation of scarce land resource, increase productivity, and
reduce risk in agriculture. However, even though cropping diversity can reduce several
limitations and risks involved in traditional methods of agriculture, it cannot eliminate
the risk element completely. The study reveals that insurance in agriculture is less
explored area and there is further scope towards reducing the risks associated with
crop diversification.
A study by Roy (2015) examines the conditions under which there has been
greater diversification of cropping pattern, and the factors influencing the farmers’
decision regarding diversification. The study finds that the areas, endowed with assured
water supply at cheap rates (mostly canal irrigation), concentrate more on production
of cereals and traditional crops showing lower extent of crop diversification. Also he
has added that diversification in cropping pattern has occurred more in those cases,
where farm households are in a position to provide more family labour for cultivation.
Brithal et.al (2007) have suggested that agricultural diversification towards high-
value crops can potentially increase farm income, especially in a country like India
where demand for high-value food products has been increasing faster than that for
staple crops. Indian agriculture is overwhelmingly dominated by smallholders, and
researchers have long debated the ability of a smallholder-dominated subsistence farm
economy to diversify into riskier high-value crops. They have given evidence that the
gradual diversification of Indian agriculture towards high-value crops exhibits a pro-
smallholder bias, with smallholders playing a proportionately larger role in the cultivation
of vegetables versus fruits. They observe that the patterns are consistent with simple
comparative advantage-based production choices.
There is often debate among researchers on the ability of small holder-dominated
subsistence farm economy to diversify into HVCs. Scholars like Longhurst (1988)
opine that in laggard regions, the small farmers are at a great disadvantage to take up
diversification and this happens due to a large number of causal factors including
institutional, technological, etc. On the contrary, the study of Joshi et al. (2006) of the
Indian agricultural development scenario reveals that small farmers do have a tendency
towards gradual diversification, towards HVCs particularly towards vegetables, as it is
very much labour intensive. As stated earlier, Odisha largely has subsistence agriculture
with a high concentration of small holders (below 2 ha of holding). The small and
marginal farmers constituting about 83 % of holdings cultivate more than 53 % of
168 Agrarian Distress and Farmers’ Suicides in India

cultivated area in the state (Economic Survey 2010–2011, Government of Odisha).

A study by Atibudhi (2015) has analysed the trends and patterns of agricultural
diversification in Odisha. He observes that there has been a significant change in the
cropping pattern in the past few decades in the country as a whole as well in Odisha.
The share of cereals in gross cropped area (GCA) was highest amongst other crops
from 1970/1971 to 2007/2008. Moreover, the area devoted to food grains (cereals and
pulses) was much higher in both the state and all India levels. The uncertainty in the
crop production sector has warranted special policy interventions for strengthening
the ailing livestock sector, which can provide supplementary incomes to the farmers
and can contribute to the gross state domestic product significantly.
In the context of Odisha, some recent studies have analysed the role of
infrastructure in crop diversification (Reddy, 2013; Nayak,2008 &2014; Nayak and Kumar
2015). These studies, however, differ as far as the role of rural infrastructure. While
Reddy (2013) argues infrastructure raises crop diversity, the empirical study by Nayak
and Kumar (2015) shows that infrastructure leads to crop concentration rather than
diversification. These studies however have not taken the same set of infrastructure
items.
Despite a good number of attempts, scholars are yet to settle what are actually the
determinants of crop diversification, and what is their relative effectiveness. Exploring
proper determinants is required to better targeting and restructuring public policy. This
calls for further research.
III. Data, Variables and Methods
The present paper has considered a list of variables which could influence crop
diversity. This includes credit, fertiliser, seed type, rainfall, irrigation, per capita income,
and rural infrastructure. Although rural infrastructure can comprise several items
covering economic, social and institutional dimensions, this study has given emphasis
to economic factors like irrigation, rural electrification, transportation, and
communication. The details of such potential variables are presented in Table 1.
An index is prepared for rural infrastructure on the basis of the principal component
analysis. Similarly an index is also prepared to measure crop diversity in all the districts
of the state. District-wise data pertaining to the chosen variables are collected from
Statistical Abstracts of Orissa 2003 and 2012, Odisha Agricultural Statistics from 200-01
to 2013-14, Income Division of Directorate of Statistics and Economics 2001-02 and
2011-12 and Census of India 2001 and 2011. An attempt has been made to make a
comparison of improvement of crop diversification between 2001-02 and 2011-12.
Measurement of INFI
First of all, the items of infrastructure have been normalised to make themselves
unit-free. Since, the analysis observes a high degree of correlation between the items
of infrastructure resulting in multicollinearity problem, these items have been combined
to be called as Rural Infrastructure Index (INFI) as a remedy. The method of Principal
Component Analysis (PCA) is used for the measurement of rural infrastructure index
(RNFI). Principal components were selected on the basis of Eigen value criterion and
Bartlett score.
Table 1: Determinants of Crop Diversification

Factor Abbreviation Measurement Data Source

Rural Infrastructure RNFI Percentage of gross irrigated area to gross cropped area Odisha Agriculture Statistics
Percentage of rural households with electricity connection Census 2001 & 2011
Density of rural roads per thousand ht. of gross cropped area Statistical Abstracts of Odisha
Percentage of rural household with telephone connection -do
Credit CRDT Agricultural credit per hectare of gross cropped area Statistical Abstracts of Odisha
Fertiliser FERT NPK (in kg) used per hectare of gross cropped area Odisha Agriculture Statistics
Seed type HYV Percentage of gross cropped area under High Yielding Variety Odisha Agriculture Statistics
Rainfall RNF Total rainfall from June to September in unit mm Odisha Agriculture Statistics
Per Capita Income PCI Per Capita Income from agriculture Income Division, Directorate of Statistics
and Economics
Crop Diversification in Odisha: An Empirical Assessment
169
170 Agrarian Distress and Farmers’ Suicides in India

k
INFIi  wi j x i j
j 1

where INFIi is infrastructure index of the ithdistrict, wj = weight of the jthfactor and
xj = normalised variables of the jth (ELCT,PGIA,TELC and RDEN) factor for the ithdistrict.
INFI  2011  12    0.902 ELCT    0.719 PGIA   0.954 TELC      0.129 RDEN
INFI(2001-02)= 0.957 ELCT + 0.684 PGIA + 0.877 TELC + (-) 0.0764 RDEN
Measurement of Crop Diversification
Crop Diversification has been measured on the basis of Theil Entropy Index,
termed as crop diversification index (CDI) where Pi =the proportion of area under ith crop
in gross cropped area (GCA), n= the number of crops.

n 1
 Plog P
i i

Theil  Entropy  Index  (CDI T )  i

log n
T
0 < CDI < 1, when CDI = 0, there is complete concentration (no diversification),
and where CDI = 1, there is complete diversification
Regression Model
The analysis has fitted a linear multiple regression models for the year 2001-02
and 2011-12 with CDI as the left hand side variables and the variables explained in
Table 1 as the right hand side variables. However, the final selection of variables is
done on the basis of regression through backward elimination. The model giving the
highest adjusted R2 is considered for the analysis. The model is scrutinised for possible
problems in regression analysis like multicollinearity and autocorrelation. A categorical
regression (grouping method) is also attempted after bootstrapping in order to test
robustness of the linear regression and the relative importance of the regressors. The
study develops on the hypotheses that the variables explained in Table 1 are the
determinants of crop diversification.
IV. Results and Discussion
Starting from standard deviation to Atkinson Index, crop diversification can be
measured in a number of ways. Some studies have also measured it by the percentage
of cropped area under high-valued crops (Ashok and Balsubramanian, 2006). However,
the present study utilised Theil Entropy Index, named as CDI. The Theil index measures
an entropic “distance” the population is away from the “ideal” egalitarian state of
everyone having the same value. It may be noted that Nayak and Kumar (2015) have
attempted for both Herfindahl and Theil Entropy Indices and the study observed the
Pearson’s correlation coefficient between CDIT and CDIH was 0.99. In addition, the
ranks of the districts are exactly the same in both measures. In order to escape from
repetition, one has been taken for further scrutiny.
 Crop Diversification in Odisha: An Empirical Assessment 171

Crop Diversification in Odisha

An attempt has been made to understand the relative positions of all the thirty
districts of Odisha in relation to crop diversification. Eight variety of crops like food
grains, oil seeds, fibre, spices, vegetables, fruits, sugarcane and tobacco have been
included. CDI in the state from 2000-01 to 2013-14 is presented in Fig.1. In the year 2000-
01, it is found that the CDI of Odisha is only 0.39 and slowly it has increased to 0.45 in
the year 2013-14.
Albeit it is an observable tepid growth, we develop a curiosity to examine if there
has been any relative change in CDI from the year 2000-01 to 2013-14. The One-Sample
t-test results show that even this modest growth in CDI is significant (Table- 2). The
null hypothesis that CDI=0 (not significant) is rejected. A low base and low standard
error of CDI explains this phenomenon.

Fig.1: Crop Diversification in Odisha 2000-2013

Table 2: One-Sample Test for CDI

2000-01 Test Value = 0

to t df Sig. (2- Mean Difference 95% Confidence Interval of the Difference
2013-14 tailed) Lower Upper
CDI 88.922 13 .000 .4316162 .421130 .442102

Source: Authors’ computation

Crop Diversification across the Districts
The position of all the thirty districts of the state in CDI is presented in Table 3
and Fig 2. Surprisingly, a backward district like Kandhamal districts remains in the top
rank with CDI value 0.61 and 0.67 in both the years 2001-02 and 2011-12 respectively.
Baragarh district, which is considered as the rice bowl of Odisha, is in the last rank of
the state for the year 2011-12 but it was placed in 27th rank in 2001-02.The study
observes that mostly the tribal dominated KBK districts are in the top ten positions,
whereas the relatively richer coastal districts of Odisha except Jajpur are in the bottom
ten both in 2001 and 2011. The central Odisha districts are also relatively better in
diversification. However, there have been significant changes in the ranking of the
districts during 2001-11. For example, Khordha has improved from 29th to 13th place, and
Nayagarh from 30th to 12th position. On the other hand, Sambalpur has deteriorated from
Table 3a: District-wise Crop Diversification Index of 2001-02 172

RANK DISTRICT CDI 01 RANK DISTRICT CDI 01 RANK DISTRICT CDI 01

1 Kandhamal 0.61 11 Balangir 0.44 21 Baleshwar 0.36

2 Gajapati 0.55 12 Jajapur 0.44 22 Baudh 0.36
3 Rayagada 0.55 13 Jharsuguda 0.44 23 Cuttack 0.36
4 Debagarh 0.53 14 Nabarangpur 0.44 24 Mayurbhanj 0.35
5 Anugul 0.51 15 Nuapada 0.43 25 Jagatsingpur 0.34
6 Koraput 0.49 16 Kalahandi 0.39 26 Sundargarh 0.33
7 Malkangiri 0.49 17 Puri 0.39 27 Baragarh 0.32
8 Sambalpur 0.47 18 Ganjam 0.38 28 Bhadrak 0.31
9 Dhenkanal 0.45 19 Kendrapara 0.37 29 Khordha 0.31
10 Keonjhar 0.45 20 Sonepur 0.37 30 Nayagarh 0.31
Source: Authors’ calculation
Table 3b: District-wise Crop Diversification Index of 2011-12

RANK DISTRICT CDI 11 RANK DISTRICT CDI 11 RANK DISTRICT CDI 11

1 Kandhamal 0.67 11 Jajapur 0.48 21 Cuttack 0.4

Agrarian Distress and Farmers’ Suicides in India

2 Rayagada 0.59 12 Nayagarh 0.46 22 Jagatsingpur 0.4

3 Malkangiri 0.57 13 Kalahandi 0.45 23 Ganjam 0.38
4 Dhenkanal 0.55 14 Khordha 0.45 24 Mayurbhanj 0.38
5 Koraput 0.55 15 Sundargarh 0.44 25 Puri 0.37
6 Anugul 0.54 16 Jharsuguda 0.43 26 Sonepur 0.37
7 Gajapati 0.54 17 Baleshwar 0.41 27 Bhadrak 0.35
8 Debagarh 0.53 18 Nuapada 0.41 28 Kendrapara 0.35
9 Keonjhar 0.51 19 Sambalpur 0.41 29 Nabarangpur 0.35
10 Balangir 0.48 20 Baudh 0.4 30 Baragarh 0.27
Source: Authors’ calculation
 Crop Diversification in Odisha: An Empirical Assessment 173

8th to 19th position, Nabarangpur from 14th to 28th, Puri from 17th to 25th and Kendraparda
from 19th to 29th. Districts like Mayurbhanj, Bhadrak, and Cuttack more or less continue
in the bottom ten districts in crop diversification.
Analysis with help of the tables and graph so far gives a sketchy picture on the
comparison of crop diversification between the year 2001-02 and 2011-12. From Table 4,
a remarkable observation can be made that the crop diversification of Odisha between
the year 2001-02 and 2011-12 has changed significantly. The Paired Samples T-test has
shown that p-value is 0.004. For a comparison apropos algebraic values, Fig 2 may be
referred to.

Fig. 2: District -wise Crop Diversification Comparison between 2001-02 and 2011-12
Table 4. Paired Samples t-Test

Paired Differences t df Sig. (2-

Mean Std. Std. Error 95% Confidence Interval of tailed)
Deviation Mean the Difference
Lower Upper

CDI 11
.03167 .05509 .01006 .01110 .05224 3.148 29 .004
CDI 01
Table 4 explains that between 2001 and 2011, CDI has increased by 0.032. Even
this increase is significant at 1 per cent level.
Comparison of Land Allocation between High Value Crops and Low Value
Crops
An attempt is also made to examine the percentage share of gross cropped area
for high value crops (HVC) and low value crops (LVC) cultivated by the farmers of
174 Agrarian Distress and Farmers’ Suicides in India

Odisha. The percentage share of high value crops are found more in districts like
Kandhamal, Malkangiri, Angul, Debagarh, Dhenkanal, Gajapati, Raygarha and
Jharsuguda. The percentage share of Kandhamal district is in top rank in both 2001-02
and 2011-12. This district has increased a remarkable share of HVC from 43 per cent in
2001-02 to 51 per cent in 2011-12. Another district Malkangiri also raised its share from
33 percent to 43 per cent between 2001-02 to 2011-12. Similarly, the districts like Angul,
Debagarh, Dhenkanal, Gajapati, have also increased their percentage share of HVC
during 2001-02 to 2011-12. It is found that the various districts like Bhadrak, Cuttack,
Jagatsihpur, Jajpur, Keonjhar, Mayurbhanj, Nayagarh and Sundergarh have also
increased their share of HVC but in low magnitude.
On the contrary, the percentage cropped area under HVCs has declined for
Rayagarha and Jharsuguda districts from 32 to 28 and 30 to 26 respectively during
2001-11. The same is the story of districts like Bargargh, Kendrapara, Koraput,
Nabarangpur, Nuapada and Sambalpur. The districts like Balangir, Ganjam, Puri and
Sonepur remain same as its percentage share of HVC between the year 2001-02 and
2011-12.

Fig. 3: Comparison of Percentage share of High Value Crops between 2001 and 2011

The analysis observes that the area under HVC has increased by about 2 per cent
during 2001-11 on an average, and this increase is significant at 5 per cent level (p-
value =0.031, Refer Table 5).
Table 5: Test for Mean Difference of HVC 2011 and 2001

Paired Differences
95% Confidence Interval of
the Difference
Std. Std. Error Sig. (2-
Mean Deviation Mean Lower Upper t df tailed)
2011 HVC - 1.9564457 4.7158419 .8609910 .1955214 3.7173700 2.272 29 .031
2001 HVC
 Crop Diversification in Odisha: An Empirical Assessment 175

Regression Results
The impact of the selected explanatory variables on CDI is assessed by running
two linear regressions in which the regressors are kept unchanged but the time points
are different. The regressors are chosen on the basis of backward elimination method.
The adj R square value was the primary basis of inclusion or omission of a variable. The
results are stated below in Table 6.
Table 6: Regression Results: Determinants of CDI
2001 2011
Unstandardized Unstandardized
Variables β Coefficients SE P-Values β Coefficients SE P-Values
Constant .554 .032 0.000 .655 .035 0.000
INF -.004 .008 0.674 -.02 .008 0.013
CRDT -7.922E-005 .000 0.162 3.131E-006 .000 0.441
FERT .000 .001 0.712 -.001 .000 0.009
HYV -.001 .000 0.030 -.000 .000 0.024
2
R 0.533 0.632
Adj R Square 0.458 0.573
F 7.121 10.731
Significance 0.001 0.000
d-stat 1.864 1.943
Dependent Variable: CDI
The individual and collective effects of the chosen explanatory variables on crop
diversification for the year 2001-02 are examined scrupulously. As a measure of
goodness of fit, R2 reveal that about 53.3 per cent variation in CDI is explained by all the
regressors taken together, and the p-value of F confirms that it is significant. The
explanatory variables, other than HYV, do not have significant effect. However, it is
important to observe that these regressors have negative impact on CDI. This means,
high yielding variety seeds, rainfall, credit, per capita income and rural infrastructure
result in concentration not diversification of crops. Except FERT other determinants
have negative impact on CDI. Regarding HYV seeds, the result is as per our expectation.
If more and more area is put to high yielding seed of principal crop, like paddy in
Odisha’s case, productivity rises. As a result, farmers do not develop any tendency to
diversify their farming.
As regards the regression of CDI on the chosen regressors for the year 2011, the
study observes goodness of fit, R2is 0.632. so about 63 percent variation in CDI is
explained by all the regressors taken together, and the p-value of F confirms that it is
significant. All the explanatory variables, except for Credit, do have significant effect.
However, it is important to observe that INFI, HYV, and FERT have significant but
negative impact on CDI. This means, high yielding variety seeds, fertiliser and rural
infrastructure result in concentration not diversification of crops. However, as regards
infrastructure, the result is contrary to the conventional wisdom that improved roads,
irrigation, electricity and tele-connectivity facilitate diversification because these
elements assuage the risk and uncertainty regarding production. The present study
176 Agrarian Distress and Farmers’ Suicides in India

observes the opposite. Possibly, not merely quantity but the functioning and
composition of infrastructure matters a lot. For example, canal irrigation in many places
in Odisha is available for the kharif crop, in which only paddy is cultivated. The
condition of rural roads, functioning of irrigation and availability of electricity for farm
use, warehousing and marketing infrastructure are some of the factors, which could
have made a difference in the result, but could not be incorporated due to lack of
district-wise data. Better the level of infrastructure, farmers try to adopt better practices
to get the optimum output from the crop.
Table 7: Results of Categorical Regression

2001 2011
Unstand. β  Bootstrap P- Relative Unstand. β  Bootstrap P- Relative
Coefficients SE Values Importance Coefficients SE Values Importance
Variables
INF -.061 .263 0.817 .060 -.564 .316 .087 .460
CRDT -0.370 .249 0.150 .381 .255 .386 .515 -.167
FERT -0.127 .193 0.516 .111 -.474 .217 .038 .473
HYV -0.434 .192 0.033 .448 -.284 .187 .140 .233
R2 0.549 0.632
Adj R2 0.476 0.573
F 7.597 10.731
p-alue 0.000 0.000

Dependent Variable: CDI

Table 7 gives some important information. First of all, the robustness of linear
regression is checked through bootstrapping standard error for 1000 samples. After
HYV remained as the most important regressor for CDI in 2001 but in 2011 fertiliser and
infrastructure emerge as the most important determinants of CDI. The relative importance
of infrastructure and fertiliser increased whereas CRDT does not seem to be an important
determinant of diversification. It is not surprising because farm credit can either be
diverted for non-agricultural purposes or for intensive cultivation of the same crops.
V. Conclusion
The study finds that crop diversification in Odisha is rising though the progress
is slow. But considering low base and less variability across districts even the sluggish
rise is found to be significant. Economically backward districts are ahead in
diversification, which indicates a paradoxical scenario. The conventional wisdom is
that crop diversity fosters resilience and gives a boost to the growth process in
agriculture. The present finding contradicts this notion. The districts which show
higher per capita agricultural output are not witnessing crop diversification as compared
to economically backward districts. This could be due to prevalence of continued
traditional crop practices in tribal districts of Odisha. Even diversity could be distress
driven. This means since these districts are not in a situation to produce major staples
in a substantive way, they rely on diversified output for their subsistence. However,
any such conclusion is subject to further scrutiny.
The factors like area under HYV crops, fertiliser uses and rural infrastructure have
significant impact but they have led to crop concentration in Odisha. The role of credit
could not be ascertained as in 2001 its sign was negative whereas in 2011 the coefficient
 Crop Diversification in Odisha: An Empirical Assessment 177

became positive. In none of these years, however, it was significant. Surprisingly,

many backward districts like Kandhamal and Malkangiri showed higher CDI, where
HYV seeds, fertiliser and infrastructure including irrigation are less in use. Surprisingly,
rainfall dummy is not seen as a significant determinant of diversification. Therefore,
what are exactly the positive contributors to diversification calls for a disaggregated
analysis at farm level.
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