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This paper provides empirical evidence of nonlinearity in the relationship between crop specialization in a village economy and the extent of the market (size of the urban market) relevant for the village. The results suggest that the portfolio of crops in a village economy becomes more diversified initially as the extent of the market increases. However, after the market size reaches a threshold, the production structure becomes specialized again. This evidence on the stages of agricultural diversification is consistent with the stages of diversification identified in the recent literature for the economy as a whole and also for the manufacturing sector. The evidence highlights the importance of improving farmers' access to markets through investment in transport infrastructure and removal of barriers to trading.

Access to markets --- Agriculture --- Commercialization --- Crops and Crop Management Systems --- Debt Markets --- Expenditure --- Finance and Financial Sector Development --- International trade --- Macroeconomics and Economic Growth --- Marketing --- Markets and Market Access --- Political Economy --- Price risk --- Relevant market --- Sales --- Spread --- Thin market --- Transport --- Transport Economics, Policy and Planning