Lack of Infrastructure

The inability to deliver perishable produce to the right market at the right time can impair the efforts of producers. Lack of infrastructure and well developed markets make this a significant source of risk in one hand, and the large fluctuations in input output prices which restrict the reliability on price predictions on the other hand. Unstable farm income resulting from business and financial risk coupled with lack of infrastructures in the area may affect production decisions, delay adoption of the new technology, prohibit long term investment in agriculture and hence delay the agricultural development in this sector (Hazal and Ramasamy, 1991).

Lack of drought management of strategies

Implementations of farmers drought management strategies fail, however, in the event that widespread drought causes crop failure over a wide area and depresses the rural economy so much that all sources of income are affected. Such aggregate level, covariate risk calls for government intervention to help stabilize incomes and prevent famine. In this context, the effective implementation of rural employment and food subsidy programs deserve credit for reducing drought related hunger in India in the last two decades. On the other hand, government sponsored rainfall insurance schemes have probably not contributed to increased adoption of improved seeds, but they have done a great deal to drain public funds.

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