Remittances, Farm Investments, Land Use, and Water Consumption: Interdependencies in Kerala, India

The research presented in this book assesses the effects of migrants' remittances on farm investments, focusing on the case of Kerala, India. The results indicate that remittances significantly enhance farm investments, whereby households' farm-related spending priorities are labour, fertilizer, and starting or extending rubber plantations. However, remittances have significantly negative impacts on land use change overall. Further, the results indicate that farm investments contribute to reduce water consumption because farmers tend to substitute irrigated crops by rain-fed crops. Although remittances cannot solve the structural problems of the farm sector, they provide farm households with capital and thus facilitate transitions or improve the production of existing crops. The study emphasizes the importance of remittances for mitigating credit constraints and facilitating investments, thus supporting the New Economics of Labor Migration (NELM). At the same time it draws attention to potential negative implications for the natural environment.