Risk in agriculture: A spatio-temporal analysis of agricultural income of Kerala

Anjana Vijayan, P. Indira Devi


Agriculture and allied sectors are the crucial sectors of Kerala economy as they provide livelihood to approximately 40 per cent of the rural households. But over the past two decades its relative importance in the state economy has been dwindling. The present study discusses the trends and patterns in agricultural income of the state over a period of 15 years from 1999-00 to 2015-16. The analysis shows the nominal income as increasing steadily over the period, while the real income as stagnating. The rate of growth in nominal income is 10.6 per cent and that of real income is -0.8 per cent. The price trend of agricultural commodities of Kerala shows adverse terms of trade in price received and price paid by the farmers. The index of agricultural production of prominent crops of Kerala halved from 107.85 (1999-00) to 48.05 (2015-16) highlighting the severe set-back in agricultural production. Palakkad, Idukki and Kottayam were the districts that contributed highest to state agricultural income (2015-16) while Idukki, Kottayam, Malappuram in that order were the ones that showed consistent share over a span of 15 years. The level of agricultural risk in the state, estimated as the instability index was found to be 0.086 at current prices and 0.067 at constant prices. Kasaragod, Alappuzha and Wayanad were the high risk districts. The paper recommends that the policy instruments are to be designed taking into consideration the relative importance of districts in the state’s agricultural performance and risk factors.


Agricultural income, Risk, Instability, Nominal price, Real price, Compound growth rate, District, Kerala

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