How socio-economic and natural resource inequality impedes entrepreneurial ventures of farmers in rural India

Ram Ranjan*

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    2 Citations (Scopus)

    Abstract

    Entrepreneurial ventures potentially offer a way out for farmers facing stagnant livelihoods in drought-ridden farming. We develop a model where entrepreneurial success of marginal farmers is linked to their ability to overcome the challenges posed by the existent socio-economic and environmental inequalities. Farmers with lower socio-economic status receive an unequal share of irrigation water from common reservoirs, which impedes their ability to accumulate financial capital and start an enterprise. Findings suggest that less endowed farmers could end up inefficiently dedicating resources towards reducing social inequality through a process of social friction, which adversely affects their livelihood prospects. When both farming and entrepreneurial ventures are prone to failure, farmers may stay within farming for longer despite higher failure risk. When agricultural exit risk is higher and enterprise failure risk lower, farmers are forced to invest more time in farming and mitigating such risks, which, in turn, delays their success in business.

    Original languageEnglish
    Pages (from-to)433–460
    Number of pages28
    JournalEuropean Journal of Development Research
    Volume31
    Issue number3
    Early online date24 Jul 2018
    DOIs
    Publication statusPublished - Jul 2019

    Keywords

    • Caste-based conflicts
    • Environmental injustice
    • Non-farm enterprise
    • Rural entrepreneurship
    • Social inequality
    • Water scarcity

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