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strategy in the future (Ballabh and Pandey 1999), rice technologies that facilitate cropdiversification will complement farmers’ coping strategies. An example of such technologiesmay be improvements in direct-seeding methods to reduce the high labordemand associated with transplanting. This will help relax labor constraints that maylimit crop diversification.Another important risk-coping mechanism of farmers is the maintenance offlexibility in their decision-making processes. The results show that farmers adjustcrop establishment methods and varieties over time depending on the amount of rainreceived at the beginning of the cropping season. Improved varieties that performequally well under direct-seeding or transplanting methods will contribute to flexibility.Similarly, an accurate forecast of the early season rainfall pattern and disseminationof forecasts to farmers will help adapt rice production methods to match rainfall.High intensity of land use for production of cash crops during the rabi season isan important feature of the study villages. A substantial proportion of household incomeis generated from the rabi crops. In addition, the proximity of study villages tourban centers has expanded the nonfarm employment opportunities available to farmingfamilies in the study villages. As a result, the share of rice income in the total householdincome in these villages is below 10%. Even though the rice income is highlyunstable, farmers have been able to stabilize total household income through diversificationof income away from rice. This strategy seems to have been quite effective instabilizing total household income, even in Itgaon, which has a higher proportion ofrainfed area. Policies such as the development of infrastructure and rural industrializationthat facilitate income diversification can thus play an important role in reducingthe effect of risk in rice production.A low proportion of rice in total household income also means that risk in riceproduction per se is relatively unimportant in these villages. The estimated cost ofrisk was found to be below 1% of mean income. This implies that breeding programsthat sacrifice some yield gain in the pursuit of yield stability are likely to be lessattractive than those that aim to improve the average yield. Similarly, farmers’ demandfor crop insurance to stabilize income from rice is likely to remain low. A cautionarynote is in order here. These conclusions may not be applicable to other partsof eastern India where the share of rice in total income is higher due to the lack ofincome diversification opportunities.The results of the study also show that the modern varieties currently beinggrown are not necessarily more risky than the traditional varieties. The conventionalwisdom that modern varieties increase risk is not supported by the data. The spread oftubewell irrigation in the study villages contributed to risk reduction by creating morefavorable growing conditions for modern varieties. However, the fact that traditionalvarieties rarely had higher yields than modern varieties over the study period is anindication of a lower risk associated with these more recent modern varieties.Despite the apparent effectiveness of farmers’ coping mechanisms in reducingrisk associated with rice production, the spread of modern varieties is still constrainedby the unavailability of irrigation and limited farm size. Although access to irrigationhas improved in more recent years because of increasing investments in tubewellRainfed rice, risk, and technology adoption: . . . 335