Project final report

Climatic stress, structural change and farm and non-farm enterprise uptake by farmers in India and Bangladesh - final report

Date released
02 March 2017
Publication Code

Ram Ranjan, Thiagu Ranganathan, Asif Reza Anik, Kanchan Joshi, Deepa Pradhan and Brajesh Jha


This project aimed to understand why farmers take up entrepreneurial ventures, and to understand how climate change-related resource scarcity and shocks influence this decision.

Climate change-induced water scarcity and high salinity threaten the livelihoods of millions of farmers in India and Bangladesh. The agricultural sector's lack of structural transformation makes farmers more vulnerable to these stressors. This sector employs many people but contributes little to these country's GDPs.

Rural non-farming (economic activities not associated with farming) could improve farmer's lives. Over the past two decades, more farmers in India and Bangladesh have turned to non-farming, and now almost half of farming household incomes come from non-farming. More frequent floods, droughts, irregular rainfalls and higher temperature and salinity levels will make it difficult for poor farmers to improve their livelihoods.

Understanding why farmers turn to rural enterprise would help design better policy, and ensure that farmer's transition to non-farming was rapid and successful.

This project studied the livelihood choices (especially entrepreneurial choices) that climate-stressed farmers made in water scarce areas of West Bengal and Bihar in India, and in salinity-prone regions of south-west Bangladesh. It examined how householder's natural, physical, human, financial and institutional capital bases influenced the uptake, competitiveness and profitability of their entrepreneurial ventures and other livelihood choices such as rural labour and migration.