This paper investigates the impact of financial Inclusion on household poverty and vulnerability by constructing a household financial inclusion index using the China Household Finance Survey 2015. It is found that financial Inclusion significantly reduces the probability of poverty and vulnerability of households and has a more significant impact on vulnerable groups such as rural and urban low-income people. Further, financial Inclusion has a more significant effect on poor families that do not receive government support for poverty alleviation and can complement co-insurance mechanisms to help families better cope with vulnerabilities caused by synergistic community shocks. Finally, promoting entrepreneurship and improving risk management capabilities are the main channels of financial Inclusion. Compared with static poverty indicators in a general sense, household poverty vulnerability portrays the likelihood of household poverty in the future and is a forward-looking indicator reflecting the dynamic changes of household poverty, which helps to represent and reflect the issue of poverty eradication quality. Financial poverty alleviation is a necessary support and guarantee for poverty eradication in China. Financial development can alleviate poverty through the indirect mechanism of promoting economic growth and the direct means of providing financial services –3. HowevFinancial Inclusion is an important initiative of China’s current economic reform. Unlike traditional economic development that overemphasizes the depth of financial services, financial Inclusion focuses on the breadth and outreach of financial services, aiming to provide appropriate and effective financial services at affordable costs to all social classes and groups in need of financial assistance. The comprehensive strength of China’s financial sector has increased significantly in recent years. However, the distribution of economic resources has not been fundamentally improved, and some disadvantaged groups still have difficulties receiving adequate financial support. According to the World Bank’s 2014 Financial Inclusion Survey, only 9.5% of adults in China have access to bank loans, while 20–30% of adults in developed countries such as the United States, Germany, and the United Kingdom have access to bank loans, and 11.6% and 6.2% of people in the top 60% and bottom 40% of China’s income have access to bank loans, respectively. To this end, the Chinese government has proposed the development of inclusive finance, and the "Implementation Opinions on Financial Assistance to Fight Poverty" issued by the People’s Bank of China and others also proposed to take the development of inclusive finance as the foundation and make every effort to promote financial services in poor areas to villages and households to people.Whether financial Inclusion effectively reduces poverty in China is the core of this paper. In recent years, although domestic and foreign scholars have begun to pay attention to the poverty-reducing role of financial Inclusion, the research is not yet sufficient. First, the literature has studied chiefly the impact of financial Inclusion on poverty at the macro level, with a relative lack of micro evidence and insufficient evidence on the mechanism of financial Inclusion’s action in reducing poverty. For example , 14, fouGiven this, based on the China Household Financial Survey (CHFS) 2015 data, this paper studies the impact of financial Inclusion on household poverty and vulnerability in China and its mechanism of action by constructing a household financial inclusion index, and further analyzes what role financial Inclusion plays in poverty reduction, whether it can improve the effectiveness of poverty alleviation, and whether it can serve as a supplement to the co-insurance mechanism to help households effectively cope with synergistic vulnerability due to shocks. The main contributions of this paper are (1) incorporating poverty and vulnerability into a unified framework, analyzing not only the impact of financial Inclusion on poverty, but also examining the impact of financial Inclusion on vulnerability, and examining the role of financial Inclusion on the vulnerability of different sources of risk shocks through vulnerability decomposition. (2) The household financial inclusion index is constructed using microdata, and the mechanism of financial Inclusion’s impact on poverty and vulnerability issues is critically analyzed. (3) Urban poverty is added to study the impact of financial Inclusion on different groups’ poverty status, such as urban and rural areas, which is an essential reference for formulating and implementing China’s future poverty alleviation strategies. The rest of the structure is arranged as follows: the second part is data and variables, the third part is empirical analysis, the fourth part is impacted mechanism analysis, the fifth part is further analysis, and finally, the conclusion and policy implications.This paper uses the China Household Finance Survey (CHFS) 2015. The survey adopts a three-stage stratified sampling method proportional to the population size, and the sample is representative and of high data quality . 2015 suWe removed the extreme value of 0.5% above and below the assets and income data. In addition, because in China, if the age of the head of household is less than 16 years old or above 80 years old, it is considered to be incapable of working, so this paper deletes the age of the head of household less than 16 or more than 16 years old. 80-year-old sample. It should be noted that there are 177 samples in the deleted data, accounting for 0.47% of the total number of samples 37,300. Therefore, it can be considered that deleting extreme values has a limited impact on the total number of samples and little impact on the empirical results. There are 49 samples with missing data, accounting for 0.13% of the total number of samples of 37300. We use the following method to fill in linear interpolation.y = f(x) at the two points x0, x1 be y0, y1 respectively, and find the polynomial φ1(x0) = y0, φ1(x1) = y1,so that it satisfies.Linear interpolation is a relatively simple method, and its interpolation function is a first-order polynomial. Let the value of the function From analytic geometry: The above interpolation polynomial is a first-order polynomial, and this kind of interpolation is called linear interpolation.This paper mainly uses the World Bank’s consumption poverty line. On the one hand, China only has a rural poverty line and lacks an urban poverty line; on the other hand; the literature points out that there are significant measurement errors in income data from micro surveys and that consumption data can be a more accurate measure of household welfare . The WorStarting from the definition of VEP, vulnerability can be expressed by a general formula.Vht indicates the vulnerability of the hth household in period t, ch,t+1 indicates the welfare level (income or consumption) of the family in period t + 1, and F indicates the distribution function of the welfare level in period t + 1. IT shows the information provided by the panel data in period t. The implication of the above formula is clear: the magnitude of household vulnerability depends on the characteristics of the distribution of future levels of household welfare: the form of the distribution and the parameters of the distribution, which need to be estimated based on the information available IT.Where About the form of the income distribution, after a dFor the poverty indicator After determining the form of the distribution of income, it is then necessary to estimate the mean and variance of the distribution, which can be complex or straightforward: firstly, according to Friedman’s theory of persistent income, long-term consumption expenditure depends on a steady income, which is a stable flow of income expected over a long period (more than three years) and can be calculated from the weighted average of income observations over several years, i.e., we can This means that we can directly calculate the intertemporal mean and variance of household income as the mean and variance of the future income distribution. However, the author’s study found that the lack of data for some of the income determinants in the CHNS is significant, making the regression-based vulnerability measure less efficient. Therefore, in this paper, the first approach uses the directly calculated inter-period mean and variance of household income as the mean and variance of the future income distribution.It follows that vulnerability is a probability that measures the likelihood of experiencing poverty in the future, and a household is vulnerable if it exceeds a set vulnerability line. In the context of China’s poverty eradication efforts, we set the vulnerability line mainly based on the incidence of poverty , 32. ForWe use factor analysis to construct a household financial inclusion index in five dimensions: having a bank account, access to formal credit, commercial insurance coverage, using digital financial services, and holding a credit card. On the one hand, the existing literature mainly constructs national or regional macro-financial inclusion indices –37. MacrOn the other hand, bank accounts are the groundwork for financial Inclusion . MoreoveConsider the simplest linear probability model:β satisfies the consensus estimate, then Cov = 0 is required. However, since i must be related to i depends on y between 0 and 1, given the independent variable, consider the following two-point distribution.If Since the value of the above function is either 0 or 1, it obeys a two-point distribution, and because:F is the standard normal cumulative distribution function, then:If F is the cumulative distribution function of the "logistic distribution", then:This model is called the "Probit" model, and if This model is called the "Logit" model.yi = 1 indicating that household i is a poor or vulnerable household, findexi the household financial inclusion index, and a set of control variables.This paper uses the Probit model. This section uses the Probit model to examine the impact of financial Inclusion on household poverty and vulnerability. The explanatory variables are the household poverty and vulnerability dummy, which are assigned a value of one of the households is poor and zero otherwise. In addition, one of the households is vulnerable and zero otherwise. The explanatory variables are household poverty dummy and vulnerability dummy, the explanatory variables are household financial inclusion index, and the control variables include household characteristics and regional characteristics variables. The model is set up as follows (1), Consider the simplest univariate linear regression model:If there is endogeneity in the model, it means that the explanatory variable is related to the disturbance term:Then, the explanatory variables are endogenous variables, and the endogeneity of the model may lead to inconsistent estimation results. No matter how large the sample size is, the model estimated value will not be infinitely close to the true value parameter.The idea of instrumental variables is actually quite simple. While an endogenous variable is a "bad" variable (related to the perturbation term), there may still be a "good" part (the part that is not related to the perturbation term). If an endogenous variable can be decomposed into the sum of its endogenous and exogenous components, it is possible to obtain a consistent estimate using its exogenous component.To achieve this separation, it is usually necessary to rely on another variable, called "Instrumental Variable" , because it plays an instrumental role. Obviously. Not any variable can be used as an instrumental variable. The instrumental variables themselves must be "clean", that is, "exogenous" (unrelated to perturbation terms).Second, the instrumental variables must also satisfy the correlation:Assuming that a suitable instrumental variable is found, it can be regressed on the dependent variable to separate out the exogenous part:This regression is the first stage regression. The fitted value is This decomposes the endogenous variable into two parts:The fitted value is a linear function of the instrumental variable, so it is exogenous; and the residual part is the endogenous part. Finally, OLS is used to obtain a consistent estimate of the parameters:This regression is the second stage regression. In this way, the fitted value of the independent variable is not correlated with the disturbance term.The explanatory variable in this paper is consumption poverty, and controlling for variables such as household income and assets in the model avoids reverse causality due to income or asset differences. However, some uncontrollable factors may still lead to endogeneity problems, such as omitting other non-financial poverty alleviation support available to households or informal financial services usage habits may lead to underestimating the impact of financial Inclusion. Given this, we use an instrumental variables approach to address the endogeneity issue. Referring to the common practice of designing instrumental variables in the literature, we mainly use the financial inclusion index of other households in the same community as the instrumental variable, denoted as "Bartik IV" , 42. FinIn contrast, the financial inclusion status of other households does not directly affect the poverty or vulnerability of the family, thus satisfying the basic requirements of the instrumental variable. The between-group differences of this instrumental variable across communities ensure that the estimation is technically feasible and realistic. In addition, we construct as an instrumental variable "the time horizon of financial inclusion promotion at the provincial level × the dummy variable that the mean value of the financial inclusion index of other households in the community is higher than its national mean value". Provincial promotion of financial Inclusion can increase the financial Inclusion of households in the province. Local actions are relatively exogenous to micro families, so the instrumental variable satisfies the requirements of relevance and homogeneity. The instrumental variable implies that households are more likely to improve exogenously when their province promotes financial inclusion development and when the financial inclusion status of other homes in the community is higher than the national average households’ financial inclusion status.Household vulnerability, on the one hand, maybe due to its risk factors (idiosyncratic shocks), and on the other hand, it may be due to external risk factors (synergistic shocks). Communities are the grassroots governance units in China, and many policies are promoted and implemented. In addition, essential public services are provided from communities to households, so we define the scope of extrinsic risks in communities. Currently, different communities in China differ significantly in terms of economic development, public services, and natural conditions. Therefore, distinguishing various sources of risk, helps to implement targeted measures in reducing household vulnerability.yi = 1 indicating that household vulnerability is due to synergistic shocks, yi = 0 indicating that vulnerability is due to idiosyncratic shocks only, findexi being the household financial inclusion index, and Xi being the control variable.Regarding its economic significance, households can rely on themselves to cope with shock events when they face idiosyncratic shocks, or they can be dealt with through co-insurance mechanisms within the community. However, when households are exposed to synergistic community shocks, where all homes in the same neighborhood may be at risk, community co-insurance mechanisms will be challenging to help families deal with them effectively, and households will have to rely more on themselves. Therefore, financial Inclusion may be an effective complement. To this end, we adopt the vulnerability decomposition method of , which dyi = 1 indicating that household i is a poor or vulnerable household, findexi the household financial inclusion index, and a set of control variables.This paper uses all data from the China Household Finance Survey (CHFS) 2019, including poor and non-poor households, rural and urban households, mainly using the World Bank’s poverty line and the vulnerability indicator based on the standard definition of poverty proposed by . This seUsing the $1.9 poverty line, The explanatory variable in this paper is consumption poverty, and controlling for variables such as household income and assets in the model avoids reverse causality due to income or asset differences. However, some uncontrollable factors may still lead to endogeneity problems, such as omitting other non-financial poverty alleviation support available to households or informal financial services usage habits may lead to underestimating the impact of financial Inclusion. Given this, we use an instrumental variables approach to address the endogeneity issue. Referring to the common practice of designing instrumental variables in the literature, we mainly use the financial inclusion index of other households in the same community as the instrumental variable, denoted as "Bartik IV" , 42. FinIn contrast, the financial inclusion status of other households does not directly affect the poverty or vulnerability of the family, thus satisfying the basic requirements of the instrumental variable. The between-group differences of this instrumental variable across communities ensure that the estimation is technically feasible and realistic. In addition, we construct as an instrumental variable "the time horizon of financial inclusion promotion at the provincial level × the dummy variable that the mean value of the financial inclusion index of other households in the community is higher than its national mean value". Provincial promotion of financial Inclusion can increase the financial Inclusion of households in the province. Local actions are relatively exogenous to micro families, so the instrumental variable satisfies the requirements of relevance and homogeneity. The instrumental variable implies that households are more likely to improve exogenously when their province promotes financial inclusion development and when the financial inclusion status of other homes in the community is higher than the national average households’ financial inclusion status.The purpose of financial Inclusion is to extend the outreach of financial services and provide sustainable financial services to disadvantaged groups that are financially excluded. The Plan for Promoting the Development of Inclusive Finance (2016–2020) formulated by the State Council states that farmers, low-income urban people, poor people, and special groups such as people with disabilities and the elderly are the current key service targets of inclusive finance in China. In other words, financial Inclusion’s motive is to let the disadvantaged groups enjoy the financial services they deserve, and Financial Inclusion should play the role of " fuel in snowy weather " in poverty alleviation. However, suppose financial Inclusion is only the icing on the cake and has a more favorable impact on non-disadvantaged groups. In that case, we need to be cautious about its role in the fight against poverty in China.To this end, we study the role of financial Inclusion in poverty alleviation in China by constructing interaction terms between the financial inclusion index and related variables in rural areas, agricultural household registration, urban household income, elderly head of household, and household members with serious chronic diseases. Using the LPM model and Bartik IV for estimation, the explanatory variables are dummy variables for household poverty, and column (1) of First, we tested using other poverty lines  and other vulnerability lines (50% and 29%) and obtained consistent findings. Second, the  method wThe existing literature theorizes that financial Inclusion can positively impact poverty by promoting productive activities such as entrepreneurship, but mainly does not provide empirical evidence , 46. TheUsing Bartik IV, entrepreneurship is measured by whether the household is involved in business and industry, and the estimates are reported in Household vulnerability is determined by the size of risk shocks on the one hand and is also constrained by the household’s risk management capacity on the other. In general, the larger the risk shock, the greater the likelihood of household vulnerability, but if homes have poor risk management capacity themselves, they are more likely to fall into poverty when faced with a risk event. Financial Inclusion, by providing households with needed financial services such as commercial insurance coverage or emergency loan support, can serve as an effective tool for families to dispose of risks and help them improve their risk management capacity . Given tUsing Bartik IV, Precision poverty alleviation is an important initiative in China’s efforts to solve the problems of mistargeting and elite capture in previous poverty alleviation efforts. What role can financial Inclusion play in China’s precise poverty alleviation, and whether it can promote precise poverty alleviation and improve the effectiveness of poverty alleviation are questions we are interested in and try to answer further? To this end, we analyze the differential impact of financial Inclusion on different poor households by poor grouping families based on "whether they belong to the government’s poverty alleviation households" and "whether they receive government transfer income," and then explain the role that financial Inclusion can play in China’s precise poverty alleviation. The analysis of the differential impact of financial Inclusion on different poor households and financial Inclusion in poverty alleviation in China. In addition to consumption poverty, we also use  counterfInstrumental variables were estimated using IV, and the results of the estimates are reported in Household vulnerability, on the one hand, maybe due to its risk factors (idiosyncratic shocks), and on the other hand, it may be due to external risk factors (synergistic shocks). Communities are the grassroots governance units in China, and many policies are promoted and implemented. In addition, essential public services are provided from communities to households, so we define the scope of extrinsic risks in communities. Currently, different communities in China differ significantly in terms of economic development, public services, and natural conditions. Therefore, distinguishing various sources of risk, helps to implement targeted measures in reducing household vulnerability.yi = 1 indicating that household vulnerability is due to synergistic shocks, yi = 0 indicating that vulnerability is due to idiosyncratic shocks only, findexi being the household financial inclusion index, and Xi being the control variable.Regarding its economic significance, households can rely on themselves to cope with shock events when they face idiosyncratic shocks, or they can be dealt with through co-insurance mechanisms within the community. However, when households are exposed to synergistic community shocks, where all homes in the same neighborhood may be at risk, community co-insurance mechanisms will be challenging to help families deal with them effectively, and households will have to rely more on themselves. Therefore, financial Inclusion may be an effective complement. To this end, we adopt the vulnerability decomposition method of , which decomposes household vulnerability into vulnerability due to idiosyncratic shocks and exposure due to synergistic shocks according to the source of risk shocks, and investigate whether financial Inclusion can help households better cope with vulnerability due to synergistic shocks. The model is set up as follows (2), using a sample of vulnerable families, Based on the 2015 data of the China Household Finance Survey, this paper investigates the impact of financial Inclusion on household poverty and vulnerability by constructing a household financial inclusion index. It is found that financial Inclusion can significantly reduce the probability of poverty and vulnerability of households and that financial Inclusion can play a snowy role in poverty alleviation, i.e., it has a more positive impact on farmers, urban low-income people, and special groups such as the chronically ill and the elderly. Using the mean value of the financial inclusion index of other households in the same community as the instrumental variable, the linear probability model estimation shows that a one standard deviation increase in the financial inclusion index will reduce the household’s probability of poverty and vulnerability. The linear probability model estimates show that a one standard deviation increase in the financial inclusion index decreases the likelihood of poverty and vulnerability by 8.75 percent and 7.43 percent, respectively.Further, it is found that financial Inclusion can reduce household poverty and vulnerability through promoting household entrepreneurship and improving risk management capacity, respectively. Among them, financial Inclusion encourages household participation in business operations and reduces the probability of household exit from the business. In contrast, continuous process significantly reduces household poverty, while the impact of withdrawal from the company and new business creation is not significant. Finally, the study finds that financial Inclusion contributes to the effectiveness of poverty reduction and can serve as an effective complement to co-insurance mechanisms to help households better deal with vulnerabilities caused by synergistic shocks.The findings of this paper have important policy implications. First, it is necessary to construct a system of financial inclusion indicators at all levels. In addition to national and regional financial inclusion indices, consideration should be given to creating a micro household financial inclusion index, as this directly reflects micro households’ financial resource allocation status. Second, besides focusing on the current poverty situation, the government also needs to increase its attention to vulnerable families to avoid the emergence of new poor households and return to poverty; at the same time, efforts should be made to promote economic development, infrastructure improvement and modern governance in grassroots communities, especially to promote rural grassroots development, to prevent synergistic shocks from leading to the absence of co-insurance mechanisms and widespread exposure of households to vulnerability risks. Third, we will continue to improve the environment for innovation and entrepreneurship, provide financial support to small, medium, and micro enterprises using a financial inclusion approach, and combine tax and fee reductions to improve business sustainability and reduce business exit rates to ensure that entrepreneurial activities play a role in poverty eradication in the long term. Fourth, actively promote innovation in financial products and services, encourage county financial institutions to set aside funds for local use, guide commercial, financial institutions to provide support to the three rural areas, poor households, and micro and small enterprises, and accelerate the construction of a credit system and build a national credit sharing mechanism to reduce financial risks that may arise in the development of financial Inclusion.S1 Data(XLSX)Click here for additional data file.S1 Table(DOCX)Click here for additional data file.


The development of irrigation is generally considered an efficient way to reduce poverty in rural areas, although its impact on the inequality between farmers is more debated. In fact, assessing the impact of water management on different categories of farmers requires resituating it within the different dimensions of the local socio-technical context. We tested this hypothesis in a semi-arid area in Karnataka, South India, where groundwater irrigation was introduced five decades ago. Using the conceptual framework of comparative agriculture, based on farmers’ interviews, we built a farm typology, traced the trajectories of farm types over the last decades and assessed their current technical and economic performances. Our results show that the differentiation of farm trajectories since the 1950s has been linked with the development of groundwater irrigation, interplaying with their initial assets, and the evolution of the national and local contexts. We highlight the mechanisms by which irrigation indeed reduces poverty but engenders fragilities, particularly for poor households, whose situation was aggravated by the depletion of water resources over the last two decades. Finally, this extensive understanding of the agrarian context allowed us to formulate and assess the potential of different ways forward, including irrigation technology, change in cropping or livestock systems, land tenure, and value added distribution. As such, this analysis would be of major interest to policy makers involved in reforming the agricultural context for better agricultural water management. Whether it be through an increase in food production, a rise in farmers’ incomes or the creation of jobs in the farm sector and other associated sectors, irrigation improves the economic situation of rural households8. This global conclusion is nonetheless nuanced by the works dealing with the issue of equity, which show that the development of irrigation can go hand in hand with a reinforcement of inequalities13. These inequalities are partially geographical14—the regions offering better possibilities for irrigation benefit more from the positive effects of its development—but are also due to the contrast between households within a same region15. Households’ access to land17, the capital they possess19, their precocious or late investment in irrigation21, the sources of irrigation they make use of22, the social relationships they are part of and that structure water governance24 translate into differentiated effects of irrigation development between households. Another emerging question is how the depletion of water resources observed in certain irrigated agriculture regions affects equity27: are poor households more vulnerable than better-off households? If so, what are the contributory mechanisms?.The links between irrigation and poverty are the subject of a vast literature that converges towards the idea that the development of irrigation constitutes an efficient means of fighting poverty28. Such studies carried out at a regional or micro-regional scale, which includes field surveys, are nonetheless necessary to allow us to understand how water management is embedded in a local socio-technical context and to take this into account in policy formulation and irrigation development actions31. By studying the trajectories of farms in the region over time, it is for example possible to identify the mechanisms that give the households who first developed irrigated cropping an advantage over those who turned to irrigation later and to assess the resulting income differences that exist today. Such studies also enable an objectivisation of the role the capital assets agricultural households possess play in their ability to take advantage of irrigation, and to assess the effect of debt on their income. The work and jobs generated by the development of irrigation are a third field of investigation that deserves to be explored using these integrated approaches: what is the scale of the labour requirement induced by irrigated agriculture in comparison to rainfed agriculture? Is the increase equivalent for all irrigated cropping systems? Who does the work and what kind of value sharing exists when the workers are paid labourers? A combined approach to these different dimensions  seems to be particularly useful when it comes to understanding the impact of the development of irrigation on agricultural households, and assessing the extent to which it reduces poverty and ensures equity.Apart from the question of the differentiated effects of the depletion of water resources on households, the subject of the links between irrigation and poverty is not new. However, the works that articulate these different dimensions and assess the effects of the development of irrigation on different social categories, remain relatively rare33. We based our analysis on a field study making use of the conceptual framework of comparative agriculture, which allowed us to trace the trajectories of different types of farms over the last decades, and to assess their current technical and economic performances. The overall results highlight the mechanisms by which irrigation indeed reduces poverty but engenders fragilities, particularly for poor households, whose situation was aggravated by the depletion of water resources over the last two decades.In this article, we provide an integrated analysis of the development of irrigation in a semi-arid zone in the State of Karnataka in South India. As is the case in many places in India, this development has taken place through deep borewell drilling, often considered more accessible to smallholders than vast irrigation projects34, 18,91% of the population was poor and the multidimensional poverty index was 0,079, figures that are rather high for Karnataka  but low for India .The study area Fig.  located 2, and is centred around Gundlupet town . It belongs to the Kabini Critical Zone Observatory35 and to the Environmental Research Observatory M-TROPICS36 (https://mtropics.obsmip.fr), which is part of the Research infrastructure OZCAR37 . It is part of a steep climosequence caused by the Western Ghats rain shadow38, with the average annual rainfall decreasing from about 900 mm in the West to 600 mm in the East  on the hillslopes and deep black soils (Vertisols and Vertic intergrades) in the valley bottoms41.The study area covers about 300 km42 (AI = P/PET) ranges from about 0.75 in the West (sub-humid) to 0.5 in the East (semi-arid). This makes the region very vulnerable to negative water balances, leading to groundwater depletion when the area under groundwater irrigation increases. The major effect of groundwater pumping on the progressive groundwater resource depletion observed since the 1990s was demonstrated at the scale of the Gundal river basin43. Remote sensing approaches enabled a reconstruction of the evolution of the spatial distribution of groundwater irrigation since the 1990s for the Berambadi watershed, showing that while it started in the valley bottoms and in the East, it later developed on the hillslopes and towards the West of the watershed44. To date, even though many more borewells have been drilled in the East, many of them have stopped yielding water there and the average number of functioning borewells per farm is uniform across the watershed45. Excessive groundwater pumping impacted not only groundwater availability35 but also its quality, with widespread contamination by nitrates46 and incipient salinization47.The West and South of the area are covered by a dry deciduous forest, which is part of the Bandipur National Park, the most protected zone (“core area”) of the Nilgiri Biosphere Reserve. The rest of the area is dominated by agriculture. The monsoon dynamics drive three main cropping seasons: the Kharif season , the Rabi season  and the Dry season . The Potential Evapotranspiration (PET) is about 1200 mm/y and the aridity Indexcomparative agriculture framework designed to study and compare agricultural development processes in different parts of the world and historical periods48. The combination of social and biotechnical sciences that view agriculture within a single framework is one of the main specificities of comparative agriculture. This is what enables an analysis at different scales, as well as the articulation of scales. A first concept, the agrarian system, is used at the broader regional or micro-regional scale49. Defined as “the theoretical expression of a historically constituted and geographically localized type of agriculture”50, the agrarian system is composed of two interacting elements: (i) the farmed ecosystem, encompassing one or several ecosystems and the associated farming practices and (ii) the social relations and rules organizing access to resources, production and trade. An agrarian system includes a limited number of so-called production systems. This second concept—the production system—refers to “a group of farms with the same range of resources  in similar socio-economic contexts, with a similar crops and livestock mix”51. Highlighting the differentiation process of these groups of farms, and thus the current diversity of production systems within the agrarian system, is an essential step in the research in comparative agriculture. Finally, a third category of concepts taken from agronomy and animal sciences, respectively the cropping system and the livestock farming system, makes it possible to tackle practices implemented by the farmers at plot and herd scale. Far from stable, the cropping systems, livestock farming systems and production systems as well as the agrarian system of a given region are constantly evolving, owing to several internal and external factors 52. Paying attention to the identification of these factors of change and the analysis of their systemic impacts at different scales ensures a dynamic perspective on agriculture.Agrarian diagnosis is an approach to farming system dynamics and diversity at the micro-regional scale. It is part of the The approach is largely based on interviews. In this study, all interviewees gave informed consent for participation. No personal information is disclosed in this publication. The research protocol wasn’t subject to formal review by an Institutional Review Board as it didn’t meet requirements for assessment .53 and contributes to explaining the diversity of farming systems.Agrarian diagnosis relies on intensive fieldwork, which was carried out for this study between March and August 2016. It started with landscape analysis through one-month direct observations and a review of available maps, biophysical environment data and satellite imagery aiming at identifying landscape zones that were homogeneous in terms of biophysical conditions  and agricultural patterns . The underlying assumption is that biophysical conditions define at least partly the range of farming practices that can be implemented. Having access to one agro-ecological zone or another is thus not neutral for farmers54.Then, the following month (April–May 2016), 46 interviews were conducted, mostly with older farmers, combined with the consultation of available written sources on the agrarian history of the area. Here, the objective was to reconstitute the local agrarian dynamics since the 1950s and identify the main environmental, technical and socio-economic drivers of changes. Special attention was paid to the different trajectories of farms over time, and to the factors explaining such differences. The sample was built progressively: first respondents were selected randomly within each agro-ecological zone and the following chosen to cover the diversity of farm trajectories that we gradually highlighted. We identified them based on our direct observations as well as on suggestions from previous participants The agro-ecological zoning of the study area and the reconstitution of its agrarian dynamics led to a first understanding of the current diversity of farms, which helped select farmers for the next round of interviews.The second phase of the fieldwork, spread over approximately three months (May–August 2016), consisted in observations of agricultural practices and about 90 interviews with active farmers. It aimed at characterizing more precisely the structure and the functioning of the farms in their diversity, and assessing their technical and economic results. Farm structure refers to access to land, water, equipment and labour force. Farm functioning is defined by cropping practices , and livestock farming practices . It also includes material and energy flows between crop and livestock, work organization at the farm level as well as economic data regarding prices, equipment lifetime and day labourers’ wages. Observations and interviews were conducted so as to cover the diversity of farms, which had been pre-identified during the first phase and was finally translated into a typology of farms. The same methods used in first phase served to identify interlocutors fitting the criteria for the interviews .55. In methodological terms, they correspond neither to real farms, nor to sample values averages. They are the product of a modelling process consisting in “performing an informed reduction of the observed variations”55, based on an understanding of the technical and socio-economic processes operating on the ground acquired through the previous research steps. Compared with multivariate clustering procedures56, this method has proven successful in characterizing regional farming system heterogeneity57.Based on this in-depth understanding, we then built archetypes representing the highlighted diversity of production systems (6), cropping systems (8) and livestock farming systems (2) in the area. A production system is composed of at least one cropping system or one livestock farming system and may combine several cropping and livestock farming systems. The archetypes are a detailed qualitative as well as quantitative characterization of the structure and functioning of each identified farming systemValue Added measures the wealth creation “intrinsic to the productive process”, whereas agricultural income results from a further distribution of the value added58. We calculated the value added at the level of the cropping system, livestock farming system and production system  in the Kharif season and pulses (horsegram) in the Rabi season while only large and medium farms also cultivated cash crops such as groundnut. Cereal surpluses and groundnut were sold in Terakanambi, the historical agricultural market located in the east of the taluk 63 also gave large landowners access to almost free labour, as people with nothing left to sell worked for the money lender until their loan was fully reimbursed. Smallholder farmers generally mortgaged their land in favour of their creditor in exchange for the loan of a sum of money, and when they were unable to repay the loans, they were forced to sell it to them. This practice, which was also described in Eastern India64, continues today, leading to significant land flows from small to larger farmers.Large landowners accumulated capital not only from their farm produce, but to a large extent from the loans they provided to other local stakeholders, at a high interest rate (about 25% per year in the case of consumption loans). Landless people took loans for consumption, as well as to pay the dowry to marry their daughters. This debt system observed elsewhere in India65. Yet, high yield seeds for a variety of crops, subsidized chemical fertilisers and pumps, became widely available. Sugarcane started to be an interesting gamble as production was largely encouraged by the Indian government and the market price for sugar tended to rise over the period. However, given the importance of the investment required, most of the farmers who could seize this opportunity were the better-off large landowners who owned land in the deep black soils in valleys  which mainly targeted existing surface irrigation infrastructure, and the production of rice and wheatA few mid-size landowners with access to suitable black soils and sufficient land to allocate a part of it to sugarcane, also dug open wells through loans taken from large landowners. Although they often had to get their production processed in their creditors’ jaggery mill (at a cost), they could generally pay off this loan quite easily thanks to the favourable market conditions for sugar at that time. As land pressure increased in their own State, some farmers from the neighbouring State of Tamil Nadu bought land from local indebted farmers and settled in this area. They looked for affordable farm land to avoid excessive subdivision of the family farm between heirs and they were attracted by the availability of cheap labour and groundwater in Gundlupet area. They came with a significant capital and were able to invest in open wells to grow sugarcane, as well as turmeric, that they introduced into the area.However, most of the small and mid-size landowners in the area did not have enough capital to invest in irrigation. Yet, their cropping patterns also evolved, as some began to grow hybrid varieties of rainfed crops (finger millet and sorghum) using chemical fertilisers. As the importance of subsistence agriculture decreased with the increase of subsidised food grains coming from the Indian surplus regions, they started growing rainfed cash crops such as sunflower and cotton.The development of irrigation provided more daily job opportunities for landless labourers and small farmers, particularly in the sector where sugarcane was the most developed (South and East of Gundlupet). Indeed, cropping systems either with sugarcane or turmeric were more labour-intensive than rainfed crops and in addition, digging open wells and sugarcane processing were labour intensive activities.61. The reduction of farm size, due to population increase and the division of farmland between heirs, was partly compensated by the expansion of cultivated lands on the hillslopes, at the expense of public grazing lands. With thin and rocky soils with minimal water holding capacity, these areas have a low agricultural potential.The land reforms continued during this period. In particular, a land ceiling of 4 ha per household was set, and some of the large landowners’ land was redistributed to the tenants. However, the implementation of the reform was limited, and although some land was handed over to low caste farmers, the Lingayats still owned most of the best land in the areaThis reduction of the grazing land area partly explains the strong decline in livestock farming that occurred in this period. The cultivation of long cycle crops on irrigated land also reduced the surface available for grazing after harvest. Finally, access to the forest for grazing was restricted when the Bandipur national park was established as a tiger reserve in 1974. As a result, many large landowners decided to quit livestock farming and to specialize in irrigated crop production, and they partly replaced manure with chemical fertilizers. In contrast, small and mid-size rainfed farmers maintained their herds of local cattle. They continued to use draught power and produce farmyard manure for their own fields, and also started selling a part of it to farmers who no longer reared livestock.66. As groundwater table in the valleys decreased, open wells began to dry up. Borewells equipped with submersible pumps allowed to go deeper and were strongly incentivized by the Karnataka government, who started providing free electricity for farmers in 199267. Other factors contributed to the rapid expansion of borewells, and to the “golden age” of sugarcane, a crop that became ubiquitous in the centre and east of the area. First, in 1992, a sugar factory was opened in Nanjangud, 40 km north of Gundlupet, providing advances to farmers for inputs, and a guaranteed price fixed by the government; this removed the obligation for sugarcane growers to invest in their own mills. Furthermore, the evolution of relative prices of most irrigated crops and nitrogen fertilizers (subsidised) encouraged the development of fertilizer-intensive crops68. Finally, the links developed between Gundlupet and the neighbouring States of Tamil Nadu and Kerala created market opportunities for crops such as turmeric and onion (grown in association), and although very volatile, the prices were high at that time.In the early 1990s, the introduction of submersible pump technology was a game changer, allowing a wide range of land-owning farmers  to gain access to irrigation as in many parts of monsoonal AsiaLarge landowners and Tamilian farmers were the first to adopt the submersible pump technology, as they had sufficient capital to invest without taking loans. Despite their generally smaller farms, Tamilians mastered the agricultural techniques of groundwater irrigated crops, and in addition, had connections with the Tamil market. Otherwise, the large majority of small farmers required external capital support to take this step. As a result, they either sold a part or their land or livestock or took out heavy loans at high interest rates (between 3 and 5% per month), essentially from farmers who had invested in irrigation in the previous period. Therefore, although consumption loans—and hence the associated free labour—had nearly disappeared partly thanks to the development of food rations provided by the government, large landowners continued to procure these investment loans to accumulate capital—and land, when the borrower faced bankruptcy.The region became attractive to alien investors as cheap land was available due to farmer’s debt, labour wages were low and groundwater was available. Wealthy businessmen from Kerala bought plots of land along the main roads from different owners, to create medium to large estates, where they planted coconut trees and cultivated understorey irrigated crops, such as banana and ginger. The landowners were absentee and the farm was managed by a permanent worker who hired daily labourers.65 led to the expansion of sunflower to the detriment of groundnut and cotton. At the end of the 1990s, companies processing marigold into colourants settled in Gundlupet and contracted rainfed farmers in the west of the area to grow marigold. They provided advances for inputs and prices guaranteed through an annual contract. In addition to this new cash crop, the wetter climate in the west of the taluk allowed development of rainfed maize in the Rabi season at the expense of traditionally grown pulses.Many smallholders did not invest in irrigation, yet several changes occurred in their rainfed cropping systems. Government incentives for oilseed crops (the “yellow revolution”)The increase in population and land division was less and less compensated by the expansion of agricultural land, as available range land was shrinking. The average size of farms in all categories declined. However, as labour demand increased with the development of irrigated lands, small rainfed farmers were able to compensate the reduction of their farm size with more job opportunities, which also helped the increasing number of landless labourers to ensure their livelihoods.65, dairy milk cooperatives were created in the 1990s in villages in the Gundlupet Taluk. Milk was collected from any volunteer farmer, regardless of the volume supplied and was paid weekly at a stable price. Services and inputs such as artificial insemination and feed concentrate were also provided. Milk production became a valued source of income for farming families. Both rainfed farmers and new irrigators replaced their local cattle breeds with more productive cross-breed dairy cows. Even some of the first irrigators who had previously abandoned livestock farming, bought Jersey or Holstein cows to produce milk. From this period onwards, the main objective of livestock farming shifted from manure and draught power to milk, for sale and self-consumption. On irrigated farms, cows were easy to feed with crop by-products and irrigated forage . Rainfed farmers continued to rely mainly on pasture, complemented with cereal straws during the dry season, but as seen previously, they also began to grow fodder maize in the Rabi season. Even some landless labourers bought cows, which they fed with spontaneous grass collected on the roadsides or in the fields and supplement with purchased fodder and feed concentrate.Another market opportunity contributed to improving farmers’ livelihoods: within the framework of the government programme to increase milk production 44. The total investment cost could reach up to 170 000 Rs per hectare in 2016 . As a consequence, the Gundal river was disconnected from the aquifer and dried up completely in the early 2000s, as did most of the traditional tanks, marking the end of rice cultivation in their command areas. As the water table declined, so did the borewell yield.The rapid increase in the number of deep borewells during the previous period caused a dramatic decrease in groundwater table levels, first in the valleys, which had the highest density of drilling, especially in the centre and East of the study area45. The few smallholders who managed to retain their access to irrigation are now heavily indebted, while the others had no choice but to return to rainfed agriculture, often with a loan repayment burden, forcing them to sell their livestock or even to hand over their land to their creditor. In the west, where relatively shallow groundwater was still available, borewell drilling and the irrigated area continued to expand. A large number of irrigators, even the indebted smallholders, invested in drip irrigation in this area.In the east, as many borewells stopped yielding water, farmers tried to retain their access to irrigation by resorting to massive investments. Those who had started to grow irrigated crops in the earliest period possessed sufficient capital. They invested in deeper and deeper borewells (up to 300 m) and in newly available water saving techniques, such as sprinklers and more frequently drip irrigation69, the general decline in groundwater resource availability induced dramatic shifts in cropping patterns throughout the study area. Sugarcane is very water intensive, little adapted to drip irrigation and cannot be combined with shorter cycle crops which give a quicker return: it virtually disappeared from the area in a few years. On medium to large irrigated farms, it was partially replaced by banana, which is well adapted to drip irrigation and can be associated with one cycle of vegetables at the beginning of its cycle. Smallholders seldom cultivate banana, because the long duration of its cycle makes it too risky in the context of uncertain groundwater availability, and also because the price is highly volatile (ranging from 5 to 25 Rs/kg at the time of the study). Turmeric is currently the main irrigated crop on all the irrigated farms (except on investor estates). It is favoured because it has a shorter cycle , can be associated with one cycle of onion (3 months) at the beginning of its cycle, and brings high profits when the prices are favourable. Vegetable production is gaining importance as it involves short duration crops (2 to 4 months) that provide a quick return on investment and is less risky than annual crops particularly in situations of groundwater depletion in borewells. Indeed, when groundwater is available, 3 cycles of vegetables can be grown per year. Vegetable cultivation is undertaken mostly by irrigating smallholder farmers, who manage the risk associated with price volatility by diversifying their production on smaller and smaller plots.As observed in other parts of India70. In 2016 a tractor cost on average 600,000 Rs (8900 USD) and one-hour of tractor ploughing was charged 600 Rs (8.9 USD). Interestingly, rainfed farmers are increasingly using their services for ploughing operations in their own fields, while conversely they are paid to prepare the seedbeds for large landowners with the bullocks they still own.For rainfed farmers, there was little change in cropping patterns during this period. As the demographic trend described for the previous period continued, the size of landholdings continued to decrease—for all farm types—and was no longer balanced by an expansion of the cultivated area, as the territory had reached saturation. With the reduction of straw availability in the area, induced by the development of crops that do not provide straws , it became increasingly difficult to maintain dairy cows and some of the rainfed farmers cultivating marigold in the west abandoned livestock farming. The decline in livestock farming is also linked to the increasing mechanisation of certain cropping operations, particularly ploughing. Many large landowners who had invested in tractors in the previous period became rural entrepreneurs earning additional income by renting them out as in other parts of South AsiaOverall, the period has seen a decline in the demand for daily labourers, not only due to the reduction of the irrigated area, but also because micro-irrigation is less labour intensive than the traditional furrow technique. In addition, the new dominant crops such as banana and turmeric are less labour intensive than the former sugarcane processed in jaggery factories. Landless labourers from the villages in the east of Gundlupet commute daily to the west of the area, where the demand for daily labour is still high, but many of them now have to undertake seasonal migration, working as agricultural labourers on plantations in the neighbouring state of Kerala to supplement their incomes.As explained in the previous sections and represented in Fig. Investors from Kerala PS1) implement cropping systems based on ginger and banana, with high land and labour productivity (Table  implemenMid-size irrigated farm owners PS2) have two origins: they are either historical large landowners, mostly lingayats in this case, or Tamilians who settled in the area in the 1980s. They were the first to develop irrigation to grow sugarcane, and they have accumulated sufficient capital to retain their access to water via investments in storage and micro-irrigation equipment. Today this allows them to grow highly productive long cycle crops like banana or turmeric  is more diverse, from low  to higher castes (lingayats). They gained access to irrigation later, in the 1990s or 2000s, generally through loans given by PS2 farmers. They cultivate turmeric associated with onion like the former category, as well as shorter cycle vegetables  are either former irrigating farmers who no longer have access to irrigation as their borewells have dried up, or farmers who never invested in irrigation. They grow sunflower or sorghum crops in Kharif season, followed by pulses in Rabi season, which have the lowest land and labour productivity Table . They eaNon-irrigating smallholders in the Western zone (PS5) have not yet invested in irrigation, which developed later in this part of the study area. The slightly more humid climate allows them to cultivate rainfed maize and marigold with better and more stable yields and marginally higher productivities than for the rainfed cropping systems in the Eastern zone  have never owned land and work on other people’s farms as day labourers. Benefitting from the development of the milk collection scheme, they set up a small dairy herd which they feed on grazing land, with spontaneous collected fodder and purchased straw and concentrate. This livestock activity is labour intensive, but with the recent changes in irrigated agriculture, it is more secure than the local sale of daily labour, and also limits the need to migrate to more distant destinations such as plantations in Kerala. For these landless workers, livestock farming represents over half their total income, which is equal to the poverty threshold Table .Non irrigating farmers and landless people  rather belong to low or middle castes, except in the East part of the area where groundwater level is critical, hence many farmers, including lingayat, went back to rainfed agriculture.7 is confirmed by the results obtained in this research, where it is illustrated in an original manner by including labour and its productivity in the analysis. In the study zone, under the current price conditions, irrigated cropping systems indeed produce between 6 to 20 times more value added per hectare than rainfed crops. As they require more labour (up to seven times more workdays per hectare) they are capable of creating employment. The increased demand for labour is due to the irrigation work itself but also and above all to the multiplication of crop cycles, to the increase in yields with increased time dedicated to harvest and post-harvest activities and to the importance of manual labour in vegetables cropping systems. But to create employment, the irrigated cropping systems must however permit an increase in labour productivity, which is confirmed here: the value added per workday is between 1.2 and 7 times higher for irrigated cropping systems in comparison to rainfed crops. Finally, the agricultural incomes obtained by farmers with access to irrigation are 2 to 80 times higher than those of rainfed farms. More than the increase in productivity per hectare, it is the increase in labour productivity and income that explains the farmers’ huge shift to irrigated cropping systems when they have the means. The very small size of some of the farms that have experienced such an increase must also be highlighted: 0.6 irrigated ha allows two workers to each earn an annual income of nearly 60,000 Rs (890 USD), or double the poverty threshold, a performance that can be directly attributed to irrigation. Overall, irrigation enables greater wealth creation, employment and an increase in income, particularly on very small farms and hence has been a very efficient tool to reduce poverty in Gundlupet.The impact of irrigation on poverty reduction3. It is nonetheless difficult to apply this reasoning to situations such as those found in Gundlupet, where the development of irrigation is accompanied by a major transformation of the cropping systems, which involve new risks.Quite rightly, irrigation is often presented as a means of reducing the sensitivity of agriculture to climate variations, of stabilising production and ensuring the availability of food for farming families between years71, generating attractive and stable prices for urea, but this is not true of other nutrients. The main subsidy irrigating farmers benefit from in the study area is undoubtedly energy, electricity with 6 h of free pumping-a-day in the state of Karnataka. This free or very low-cost access to electricity has been a major driver of the development of groundwater irrigation in India72. These authors estimate that if farmers were charged for power consumption at the real cost, this would represent 50 to 100% of the gross output per hectare. For these two subsidised inputs—nitrogen-based fertilizers and electricity—irrigated farms are thus highly dependent on public support, which raises the question of their sustainability.First, irrigated crops require far higher quantities of inputs than rainfed crops. In the study area, three categories of inputs predominate: chemical fertilizers, pesticides and electricity. Irrigating farmers have become dependent on the supply of these inputs and therefore sensitive to fluctuations in their prices. Pesticide markets are little regulated and may thus vary, creating a risk for the farmers. The nitrogen-based chemical fertilizer sector is heavily subsidized in India73. Indeed, except in the case of contract farming (as it is the case for marigold in the area), the prices of most of these new irrigated crops are highly volatile, generating sometimes large incomes, but sometimes large losses, when the selling price does not cover the production costs.Farmers also depend on access to output markets. With the shift from sugarcane to new irrigated crops such as vegetables, turmeric, ginger and banana, farmers using irrigation in the study area have clearly increased the risks they face in marketing their products as they have to sell them to private buyers in the market, and, unlike for sugarcane, there is no policy regulating their prices73. In peninsular India, this difficulty is compounded by the nature of the subsoil, which makes the availability of groundwater in the deeper levels of the bedrock even more uncertain74. This generates high risks at the time of drilling new borewells—a large number are unsuccessful—but also in the use of the old ones, as the yield remains uncertain.Finally, the other major risk irrigated farmers in the area face is the availability of groundwater itself. Like in other regions where the groundwater revolution occurred, the increase of groundwater pumping beyond the natural recharge capacity has depleted the groundwater17, which translates into the fact that farmers who possess more land benefit more from the productivity gains provided by irrigation.With ratios of incomes related to agriculture ranging from one to forty in the study zone today, it is clear that inequalities persist, and irrigation has not managed to overcome them. Looking in turn at each of the different social categories and their role in irrigation development, we can identify the different mechanisms at work in Gundlupet, which on the contrary have resulted in irrigation reinforcing the existing inequalities. The first is certainly access to land, widely underscored in the literature76. With a daily wage of 120 Rs (1.8 USD) for women and 250 Rs (3.7 USD) for men at the time of the study, the daily wealth creation . They nonetheless developed their irrigation systems in less favourable conditions than the first irrigators, both in terms of physical location (soils with a low water holding capacity), lower and far more fluctuating prices for their produce (vegetables) and lower availability of water which makes irrigated crops riskier and expensive. Above all, as they did not possess sufficient capital, they borrowed the capital required to drill their own borewells from the first irrigators. This study assesses the impact of debt, another clearly identified mechanism in rural IndiaUnder these circumstances, what are the paths worth exploring to encourage a more balanced development of irrigated agriculture?82 and the spread of this equipment is already well underway for certain cropping systems in Gundlupet. When it comes to equity, the cost of this equipment represents a first limit83—only the largest farms having the means to invest. This cost can be counterbalanced by subsidies targeting poor populations to enable them to acquire such equipment, and this is the focus of certain development programmes in India . They are nonetheless interesting in terms of diversification and a reduction in sensitivity to hazards; some also produce crop residues that can serve as animal feed and contribute to earning an income from dairy produce.Combining irrigated farming with other productive activities, less dependent on irrigation, is another path that emerges from the analysis carried out in Gundlupet. As in other parts of India, the development of milk collection has allowed numerous families to earn additional income from livestock farming and the regular sale of milk. Although most investors do not engage in livestock farming, and this activity only makes a modest contribution to the income of mid-size irrigated farms (4%), it represents over a third of the agricultural income for irrigating smallholders, two-thirds for smallholders cultivating unirrigated cereals, sunflower and pulses, and provides the landless labourers who have developed this activity an income equivalent to their earnings as day labourers. In addition, livestock farming ensures the recycling of vegetal matter  and plays a positive role in soil fertility via the application of manure89, this could take the form of transaction regulations governing, for example, indebted farmers’ loss of their land or large irrigated farms set up by investors, a new phenomenon that impacts water resource given their level of equipment.At the social level, like many other studies this analysis confirms the structural nature of the land issue in the irrigated agriculture development model and the issue of a more equal distribution of land. As we have seen, it is possible to live off 0.3 irrigated hectares per family worker, so every hectare counts! In addition to land redistribution, which has not been on any agenda in India for several decades now90. Owing to the hard rock aquifer context of the region, with low borewell yields limiting the opportunities of sharing pumped water74, Gundlupet has not seen the development of such a water market, but several authors underline that it is in fact more likely to increase rather than reduce inequalities in such a context91. Establishing tariffs for water pumping, or, more socially and politically acceptable, providing variable power supply depending on crop needs, seems to be a more hopeful solution93. Such variable power supply could be used to encourage the development of monsoon and winter crops that have less impact on water resources, to the detriment of long cycle crops such as banana, for example, which requires a large quantity of water particularly during the dry summer period, when potential evapotranspiration is at its peak. The emergence of collective management of irrigation95 is also likely to provide answers to the water crisis and the existing inequalities in Gundlupet. This collective management can focus on the infrastructure associated with irrigation, through tubewell partnerships69 or in the groundwater recharge movement96. It can also concern the water itself, which would become a “common good” regulated by “water parliaments” assembling stakeholders at the scale of an aquifer77. Collective actions of this type encounter numerous obstacles but the recent national “groundwater bill” seems to have opened up possibilities in this area98.When it comes to managing water, in Gundlupet, like in a large part of the Indian peninsula, a great deal needs to be done to better balance the lifting of water for irrigation and the recharging of the water table to limit futile investment in borewells that do not work, and to ensure a fairer overall distribution of water between irrigators. The development of a water market is often highlighted in the literature76. The wage daily labourers earn, which is a key issue in Gundlupet given the number of families concerned and their fragile economic situation, has almost doubled for both men and women since 2016. At the Indian level, there has been an increase in agricultural workers’ salaries over the last few years99. This could indicate progress in value distribution to the benefit of agricultural workers and an improvement in their livelihoods. In order to be certain this is really good news, we need to see whether this salary increase does not translate into a shift to crops that require less labour, like banana, or investment in motor-mechanised equipment for harvesting grains, for example, which would reduce job opportunities.This study also highlights a less explored field, the issue of a fairer distribution of the value added from irrigated agriculture. In the case of Gundlupet, this concerns both the interest on loans taken to buy irrigation equipment, which is a heavy burden on smallholders’ incomes, and the question of day labourers’ wages, which are far lower than the value added created. It could also involve, as is the case for investors here, value sharing between the owner, tenant and possibly the sharecropper, when the land is not exploited by the ownerThe comparative agriculture framework used in this study, by documenting farming system dynamics and diversity in the Gundlupet Taluk, showed how the differentiation of farm trajectories over time was determined by the development of groundwater irrigation. It revealed the importance of farm initial assets—and in particular land tenure and capital—which allowed better-off farmers to seize the opportunities offered by the evolution of the global and local contexts. We showed that the development of groundwater irrigation clearly increased wealth in the region, in particular by increasing dramatically labour productivity, allowing even very small farms to generate decent livelihoods. However, this was linked with an increase of vulnerabilities, mostly related to the high price volatility of most of the irrigated crops, and to the decline in groundwater resources. We also showed that groundwater irrigation did not reduce inequality, in particular due to the high burden faced by most of the small irrigators, and, a more original result of this study, due to the unfair repartition of the value added between land owners and salaried workers.The extensive understanding of the socio-technical functioning of the region allowed us to review and assess potential ways forward. While technological solutions to improve the efficiency of water management should be encouraged, they are unlikely to reduce both the social inequality and the pressure on the groundwater resource, and might even worsen the problem, if implemented without considering the socio-economic context. We believe that paths towards fair and sustainable development must include at least some degree of collective water management, however challenging this as proven to be, especially in India. Studies such as the one presented here, by revealing the agrarian system functioning and the farm diversity, can help taking up this challenge.Supplementary Information.