Diversification involves a shift of workforce from agriculture to allied activities like livestock, fisheries, and horticulture. The need for diversification arises from the fact that there is greater risk in depending exclusively on farming for livelihood. It is necessary not only to reduce risk from the agriculture sector but also to provide productive sustainable livelihood options to rural people.

Animal husbandry plays a vital role as India's livestock population is quite impressive, though productivity is low compared to other countries. It requires improved technology and promotion of good breeds of animals to enhance productivity. Improved veterinary care and credit facilities to small and marginal farmers and landless labourers would enhance sustainable livelihood options through livestock production.

Fisheries production has already increased substantially. However, problems related to over-fishing and pollution need to be regulated. Welfare programmes for the fishing community have to be reoriented in a manner which can provide long-term gains and sustenance of livelihoods.

Horticulture has emerged as a successful sustainable livelihood option and needs to be encouraged significantly. Enhancing its role requires investment in infrastructure like electricity, cold storage systems, marketing linkages, small-scale processing units and technology improvement and dissemination.

Thus, diversification into these sectors is essential to make rural areas more vibrant, provide supplementary gainful employment, and enable rural people to realise higher levels of income to overcome poverty.