Households’ Choices and Their Drivers to Rural Non-Farm Livelihood Diversification in West Bengal, India

Abstract

There are inadequate empirical studies on non-farm livelihood choices of rural households in the state of West Bengal, India. This study aims to explore the determinants that effect the choice of households to engage in non-farm economic activities. The present study found that non-farm livelihood diversification factors are more heterogeneous and mainly depend on households’ strategic decisions. A household’s choice of non-farm livelihood activity is determined by binary aspects opportunity-driven versus distress-driven, but it is a complex transformation phenomenon. It has been noticed that within the non-farm livelihoods, share of wage labour (38.3%) is higher, followed by non-farm businesses (19.8%), service providers (18.0%), and salaried jobs (3.4%). The location and distance to the town from the households, food insecurity, and agricultural land size are more influential and statistically significant factors in choosing non-farm livelihood practices. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has negatively impacted rural non-farm livelihood activities. There is an 18% and 39% probability of reducing non-farm business and services compared to the increasing MGNREGA work opportunities. Moreover, the likelihood of non-farm business choices has increased by 56% due to rainfall and temperature-change-induced disasters.