The Impact of Information on Returns from Farming

Information has considerable potential to influence agricultural outcomes, i.e., agricultural productivity, farm incomes and ultimately farmers’ welfare. It is vital input in agricultural production. Through its interaction with other factors of production, such as land, labour, capital and managerial ability, it improves production efficiency. The evidence presented in this study shows that information raises farm income by about 12%; the impact being bigger in the diversified cropping systems. The need for information is more pronounced in smallholderdominated agricultural systems as in India where farmers struggle to produce more to meet the growing demand for food, feed and fibre under resource constraints of land, water and energy that have already reached their extensive limits. Moreover, climate change is emerging as a big threat to agriculture. At the same time, demand for diverse, safe and quality food is becoming stronger in domestic as well in international markets. Future agriculture, thus, will become more information-intensive. Agricultural research generates new technologies and agricultural practices that need to be disseminated to farmers and other stakeholders in right form and at right time. There are various means, such as public extension systems, mass media, social networks, and private agribusiness and marketing firms, through which the information can be disseminated. These information nodes, however, may differ in their outreach and efficiency. This study finds that formal information sources though are limited in their outreach; these have a larger impact on farm incomes. However, in a vast country, as India with considerable agro-ecological and social heterogeneity the need for a pluralistic information system cannot be undermined. The newer sources of information, such as mobiles and internet that are cost-effective and faster means of information dissemination, can fill the gap. The findings of this research will be useful in designing digital information system for Indian agriculture.