Livelihood diversification is an important strategy by which rural people may work to exit from poverty. It is a process by which rural families construct a diverse portfolio of activities and social support capabilities in their struggle for survival and in order to improve their standards of living.Livelihood diversification can improve resilience if efforts to increase income streams and assets diversify potential risks. Livelihood diversification has long been recognized as a risk management strategy and source of resilience. Agriculture Diversification refers to either a change in cropping pattern or the farmers opting for other non-farming options like poultry farming, animal husbandry, etc. This practice allows farmers to expand the production, which helps generate a higher level of income. Livelihood diversification refers to attempts by individuals and households to find new ways to raise incomes and reduce environmental risk, which differ sharply by the degree of freedom of choice, and the reversibility of the outcome. A livelihood that can cope with and recover from uncertainties, maintain or enhance its own capabilities and assets, while not undermining but properly using the natural and social resources of rural areas. A livelihood that can cope with and recover from uncertainties, maintain or enhance its own capabilities and assets, while not undermining but properly using the natural and social resources of rural areas. Diversification includes two aspects, one relates to diversification of crop production and the other relates to a shift of workforce from agriculture to other allied activities and non-agricultural sector. Agricultural diversification is one of the essential components of economic growth. It is the stage where traditional agriculture is transformed into a dynamic and commercial sector by shifting the traditional agricultural product mix to high standard products, which has a high potential in stimulating production rate. Diversification reduces asset-specific risk – that is, the risk of owning too much of one stock or stocks in general, relative to other investments. However, it doesn't eliminate market risk, which is the risk of owning that type of asset at all.