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Why is it important to have agricultural diversification?

Why is it important to have agricultural diversification?

Agriculture Diversification refers to either a change in cropping pattern or the farmers opting for other non-farming options like poultry farming, animal husbandry, etc. This practice allows farmers to expand the production, which helps generate a higher level of income.

What are the benefits of agricultural diversification?

Conclusively, major advantages of crop diversification include income increases of small farm holdings; less risk for price fluctuation, climatic variability etc.; balancing food demand; increasing the production of quality fodder for livestock animals; beneficial for conserving natural resources; minimize …

How the system of rural credit helps in economic development?

Answer: Rural development focuses on increasing productivity in rural areas. Credit plays an important role in rural development as discussed below (i) Credit is needed by fanners to meet the initial Investment on seeds, fertilisers, implements, etc till the crop is ready.

Why is diversification not a good investment strategy?

1. A badly diversified portfolio can lend itself to poor performance, higher risk and increased investment fees. 2. A diversified portfolio will not protect you from devastating losses in severe bear markets or a panic like the steep declines of 1987, 2000-02 or 2008-09.

Can you be too diversified?

However, too much diversification, or “diworsification,” can be a bad thing. Just like a lumbering corporate conglomerate, owning too many investments can confuse you, increase your investment cost, add layers of required due diligence and lead to below-average risk-adjusted returns.

What is vertical diversification strategy?

Vertical diversification is also known as vertical integration. In this growth strategy, a company expands its business in the forward or backward direction. Firms add new products (or services) complementary to the existing products. If a firm manufactures rayon and textiles, it grows through vertical diversification.

What is diversification of crop production class 12?

Diversification of crop production refers to a system of multiple cropping rather than mono cropping. It may also mean a shift from subsistence farming to commercial farming. It has the three advantages: (i) It lowers the risk of farmer on account of failure of monsoon.

What is product diversification strategy?

What is Product Diversification? Product diversification is a strategy employed by a company to increase profitability. They show how well a company utilizes its assets to produce profit and achieve higher sales volume from new products. Diversification can occur at the business level or at the corporate level.

Does Warren Buffett believe in diversification?

Warren Buffett (Trades, Portfolio) has famously said he is against diversification. “Diversification is a protection against ignorance,” Buffett once said. “[It] makes very little sense for those who know what they’re doing.”

How diversification reduce the risk of failure?

Diversification is a technique that reduces risk by allocating investments across various financial instruments, industries, and other categories. It aims to maximize returns by investing in different areas that would each react differently to the same event.

What is the concept of diversification of agriculture?

In the agricultural context, diversification can be regarded as the re-allocation of some of a farm’s productive resources, such as land, capital, farm equipment and labour to other products and, particularly in richer countries, to non-farming activities such as restaurants and shops.

What is diversification strategy with example?

An example of concentric diversification would be a computer manufacturer who diversified from clunky desktop PCs into laptop production. This would allow them to immediately take advantage of the new wave of computer users who demanded more portable solutions.

What is the need for diversification Class 12?

Accordingly, the need for diversification is required to enable the farmers to earn from other alternative non-farm occupations. This lessens excess burden on agriculture by reducing disguised unemployment. 2. The kharif season opens up ample opportunities for agricultural employment.

What are the two important aspects of diversification of agricultural activity?

There are two ways to achieve diversification. The first aspect refers to changing the cropping patterns which further means a change in the proportion of areas dedicated to the cultivation of various crops. The second aspect focuses on the shift of workforce to other related activities (poultry, husbandry etc.)

What are the step taken by the government to promote rural development?

Four such measures taken by the government are as follows: Regulation of markets to create orderly and transparent marketing conditions which benefitted both farmers and consumers. Improving and developing infrastructure facilities like roads, railways, transport, warehousing, cold storages and processing units.

What is agricultural diversification and why is it important?

Agricultural diversification is one of the essential components of economic growth. It is the stage where traditional agriculture is transformed into a dynamic and commercial sector by shifting the traditional agricultural product mix to high standard products, that has a high potential in stimulating production rate.

Do you think various measures taken by government to improve agricultural marketing are sufficient?

Government has adopted various measures for improving agricultural marketing such as regulation of markets, provision of physical infrastructure, co-operative marketing and policy measures like MSP, etc. The current infrastructure facilities are inadequate to meet the growing demand and need to be improved further.

What do you mean by agricultural diversification Why is agricultural diversification essential for sustainable livelihood?

The agricultural diversification implies diversification of crop production and shifting of agricultural workforce to other allied activities such as livestock, poultry, fisheries, etc. A substantial portion of Indian farming is dependent on the vagaries of monsoon, making it a risky affair to rely upon solely.

How do you explain diversification?

Diversification is a risk management strategy that mixes a wide variety of investments within a portfolio. A diversified portfolio contains a mix of distinct asset types and investment vehicles in an attempt at limiting exposure to any single asset or risk.