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The risk in agriculture sector is due to various factors like weather and market conditions, particularly the demand of the commodities. This uncertainty can result in variable returns (farm income) to the decisions that farmers make in a particular season. Diversification is a frequently used risk management strategy that involves participation in more than one activity. It has the added advantage of mitigating price risk as well as fluctuations in outputs. The main purpose of this paper was to determine the factors affecting crop diversification. For determining the effect of different factors on diversification a multiple regression model was used. The values of Entropy index computed for measuring horizontal diversification were taken as dependent variable and different factors affecting diversification were taken as independent variables. The results showed that the main factors affecting diversification were size of land holding, age of respondent, education level of respondent, farming experience of respondent, off farm income of respondent, distance of farm from main road, distance of farm from main market and farm machinery.