Income and Expenditure of Farm Households: A Micro Perspective

Abstract

This micro level study, conducted in the Southern Karnataka to examine the sources of income and pattern of household expenditure, revealed that farm activities are the main sources of income in both progressive and less progressive areas and non-farm and off-farm activity (mainly agricultural labour) contributes only a negligible portion. The smallholders as well as rainfed households during the slack agricultural season depend on rural non-farm activities through non- agricultural labour as the source of earning in progressive area where as in less progressive area, all the categories of farmers had their non-farm income earned majorly from house rent. Percentage of spending on various items varied with category of farmers. With the increase in income, there was increase in expenditure on non-food items, which was observed in both areas. Inequality in income distribution was less than consumption expenditure due to unequal non-food consumption expenditures in both areas. There was a relatively higher income and expenditure inequality has observed in less progressive area compared to progressive area. Overall, it was evident from the results that, even though farm income contribution was more in both areas, still improving off and non-farm employment opportunities that adds to income and helps for further savings.