Small Farm Holder’s Wellbeing: Evidence From Punjab (Pakistan)
Keywords:Income Diversification, Socio-Economic Indicators, Principal Component Analysis, Treatment Effect Model, Well-Being, Small Farm Holders
The study investigates the impact of income diversification on the well-being of
small farm holders in Punjab, the most populated and agrarian province of Pakistan. It
benchmarks the levels of well-being of small farm holders who opt income diversification
(off-farm) with those who remain exclusively indulged in agricultural farm activities(only-
farm). The data of 1607 farm families are retrieved from the PSLM (2015–16) survey to con-
struct a fully representative well-being index using Principal Component Analysis (PCA).
Empirical analysis is obtained through the treatment effect model. The results of the treatment effect show that income diversification has positively significant impact on household
well-being and cast noticeable improvements in well-being of off-farm strata as compared to that of only-farm income earners. Furthermore, net saving, access to credit, dependence ratio, and farm size are the critical factors that enable land assets to have a favorable and substantial impact on both welfare and income diversification. Importantly improved education drives small farmers’ decision to diversify their sources of income.