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Crop diversification and risk: an empirical analysis of Indian states

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  • Mukherjee, Sanchita

Abstract

The current study explores relationship between the crop diversification and risk in India. Herfindahl Index has been used to analyse the level of crop diversification across the major states over the period of study. An effort has been made to compute yield risk and price risk of each state using the Markowitz's Mean-variance theory and map it with the crop diversification for the corresponding states. Result shows that, while the relationship is positive in the case of crop-diversification and yield risk, we cannot conclude the relationship between crop diversification and price risk.

Suggested Citation

  • Mukherjee, Sanchita, 2010. "Crop diversification and risk: an empirical analysis of Indian states," MPRA Paper 35947, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:35947
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    File URL: https://mpra.ub.uni-muenchen.de/35947/1/MPRA_paper_35947.pdf
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    References listed on IDEAS

    as
    1. Rao, P. Parthasarathy & Birthal, P. S. & Joshi, P. K. & Kar, D., 2004. "Agricultural diversification in India and role of urbanization," MTID discussion papers 77, International Food Policy Research Institute (IFPRI).
    2. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    3. Firdu Gemech & Sushil Mohan & Alan Reeves & John Struthers, 2011. "Market-Based Price-Risk Management: Welfare Gains for Coffee Producers from Efficient Allocation of Resources," Oxford Development Studies, Taylor & Francis Journals, vol. 39(1), pages 49-68.
    4. Birthal, Pratap Singh & Joshi, P.K. & Roy, Devesh & Thorat, Amit, 2007. "Diversification in Indian agriculture towards high-value crops: The role of smallholders," IFPRI discussion papers 727, International Food Policy Research Institute (IFPRI).
    5. Lindon J. Robison & John R. Brake, 1979. "Application of Portfolio Theory to Farmer and Lender Behavior," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(1), pages 158-164.
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    Cited by:

    1. Saravanakumar, V. & Malaiarasan, Umanath & Balasubramanian, R. & Angles, S., 2020. "Production efficiency and profitability of major farming systems in Tamil Nadu," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 33(Conferenc), December.

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    More about this item

    Keywords

    crop diversification; farm risk; yield risk; farm price risk; agriculture risk;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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