is provided in tables 7 and 8, both for the entire sample (panel A) and with heterogeneity by farm size class (panel B). Results with respect to the first set of variables suggest that MNREGS had no significant impact on the value of total or per acre output. At the same time, it is estimated to have led to a marked increase in the use of machinery, with a point estimate of 5.5%. As would be expected with direct effects of MNREGS affecting mainly the poor, such effects were more pronounced among small and medium farmers (estimated coefficients of 8.5% and 9.3%). Increases, of 10% and 6% respectively, of organic and chemical fertilizer by small producers suggests that program-induced alleviation of liquidity may have helped small producers move closer to the optimum level of variable input use although output and yields are not (yet) affected significantly. We also note that, in addition to irrigation-related spending, which increased by some 8% overall due to the program, MNREGS is estimated to have led to an increase in the share of cultivated area irrigated by some 6% overall and by 10% among small farmers. Physical works, in particular cleaning of canals to rehabilitate infrastructure and establishment of new small-scale water conservation structures under MNREGS is a plausible contributing factor that may have helped create the preconditions for more intensive land use, in particular planting of a second or third crop beyond wheat or paddy which normally depends on availability of sufficient soil moisture for plants to survive.

While higher returns to farming require diversification of output beyond rice and wheat, the non-traditional crops involved are not covered by government-imposed floor prices and more vulnerable to climatic shocks, both of which would increase price and production risk. Assessing if MNREGS helped to increase the number of crops grown and the share of area devoted to non-traditional higher value crops can thus serve as a proxy for the extent to which it increased the ability of different types of farmers to manage risk. Results in table 8 suggest that MNREGS did indeed increase the number of crops grown, with the largest effect (0.41 vs. 0.17 and 0.19 in the first and second season) in the third season (cols. 1-3). Again, this is most pronounced among small and to some extent medium sized farmers who are directly targeted by resource transfers through MNREGS wages. Adding information on the share of area devoted to irrigation and different crops in cols. 4-7 suggests that MNREGS is estimated to have triggered a 5.7 percentage point increase in irrigated area -possibly by alleviating capital constraints to operate necessary equipment- as well as a 3.5 point increase in the share of high value crops that was compensated by an equivalent decrease in the area planted to paddy. In all cases, effects are most pronounced among small and medium-sized farmers, supporting the hypothesis of them being linked to direct MNREGS effects.

Estimating the production function specified in (2) with indicators of program implementation as shifters in a standard production function allows us to explore if or to what extent MNREGS affected productivity and we report results for the panel with household fixed effects (cols. 1-4 and 7) and the cross-section of villages where MNREGS was implemented only (cols. 5-6 and 8). The positive but insignificant MNREGS 13