Agricultural productivity growth in India

Updated: Sep 16 2002, 05:30am hrs
Two decades ago, it was an extremely educative experience to listen to Professor Kazushi Okhawa who visited the Centre for Development Studies in Thiruvanant-hapuram, Kerala, to initiate a project on the relevance of Japans economic development to developing countries like India. Since then, it has always fascinated one to keep abreast of the research of Japanese institutions on India. It was therefore with great interest that one read these two discussion papers* from the University of Tsukuba in Ibaraki.

Trends in agricultural productivity between 1970 and 1993 is the focus of the first paper co-authored by Anit Mukherji and Yoshimi Kuroda. The time period chosen has been dictated by the fact that it follows the introduction of the seed-water-fertiliser packages termed as the Green Revolution. Subsequently, there has been an effort to increase agricultural productivity through scientific methods throughout India. What then does the relevant data indicate on trends in total factor productivity (TFP) in agriculture

If one abstracts from any discussion on the methodology adopted to measure total factor productivity and the quality of data, the story these authors relate is that there have been substantial improvements in total factor productivity at the national level - especially from the late 1970s to the late 1980s - but there are wide divergences across 14 important states. At an all-India level, the trend growth rate total factor productivity thus shows an acceleration from 1.45 percent between 1973 and 1980 to 2.33 percent in the 1980s. But since then, there has been a discernible decline in total factor productivity growth to 1.21 percent till 1993.

The total factor productivity growth pattern thus is consistent with the favourable impact of the Green Revolution in the 1970s, which gathered strength till the first half of the 1980s. According to Mukherji and Kuroda, the experience of the years from the second half of the 1980s indicates that the Green Revolution has perhaps run its course and that it would be difficult to sustain a high rate of total factor productivity growth in the absence of a major technological breakthrough in the field of agricultural science.

During the 1970s, the best performance in total factor productivity was registered by the vanguard agrarian states of Punjab and Haryana. This is not surprising as they had a headstart over the rest in the introduction of the Green Revolution. Other regions which showed high rates of total factor productivity growth were those with a high level of rural industry concentration such as Gujarat, Maharashtra and West Bengal, which suggested that their adoption of Green Revolution technologies was also better.

During the following decade, total factor productivity growth was better in most regions, but a slowdown is discernible in Haryana and Punjab due to diminishing returns to technology in agriculture. According to the authors, this period saw the fruits of technology being harvested by most major agricultural states in India and went a long way towards the achievement of agricultural self sufficiency in foodgrain production by the early 1980s. But from then onwards, there is substantial evidence of an overall slowdown in total factor productivity growth.

The regions that have bucked this trend are Haryana, Karnataka, Kerala, Maharashtra, Orissa and West Bengal. As noted earlier, some of these are ones where rural industry is prominent and hence non-farm employment is important.

The authors therefore argue that its necessary to take a more holistic approach to development by including the non-farm sector. Such states have been able to generate substantial non-farm employment opportunities, thereby lowering the share of agricultural employment and registered better total factor productivity growth rates. Even so, the next jump in Indias agricultural productivity awaits another revolution.

*Agricultural productivity growth and the non-farm sector in India: An assess-ment of the data and Effect of rural non-farm employment and infrastr-ucture on agricultural productivity: Evidence from India, productivity , Discussion paper series no 937 and 938, July 2001, Institute of Policy Planning and Analysis, University of Tsukuba, Ibaraki, Japan.