Changes in Land Use Pattern Vis-a-Vis Urbanisation and Credit

What is it about?

This study analyses the changes in land use pattern of farm households in relation to urbanisation and credit, based on a survey among 50 randomly selected farmers in rural, transitional (peri-urban) and urban areas of the research transect north of Bengaluru, India. Data on cropping patterns before and after availing credit, and the Herfindahl Index were used to analyse crop diversification across the rural– urban interface. Credit enhanced diversification in all three areas, whereby the effect was stronger in transitional and urban areas than in the rural area. After availing credit, rural farmers diversified from staple crops to vegetables, fruit crops and livestock, while transitional and urban farmers diversified from staple and vegetable crops to high-value fruit crops, livestock and poultry. The area under staple crops decreased by 18.4%, 32.5% and 41.5% in rural, peri-urban and urban areas, respectively, while area under vegetables, flowers and fruit crops increased by 7.9%, 9.9% and 32.8%. Urbanisation provided an incentive for shifting from food crops to highvalue horticultural crops and for more diversification towards commercial crops due to better access to market information and new supply and demand chains. Credit provided to farmers in time and in the required quantity would thus reduce the risk of incurring losses. Increasing the awareness on cultivation of high-value crops can lead to improvement in farmers’ welfare and help to assure their food and livelihood security.

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