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Growth Crisis in Agriculture

The sharp deceleration in the growth of the agricultural sector against the background of an impressive growth of the larger economy is widening disparities between the incomes of workers in non-agricultural and agricultural activities. It also adversely affects the welfare of the majority of the population, which is dependent on agriculture. This paper examines the trend in agricultural growth and factors underlying the slowdown and explores ways and means to bring about an acceleration.

Growth Crisis in Agriculture

Severity and Options at National and State Levels

The sharp deceleration in the growth of the agricultural sector against the background of an impressive growth of the larger economy is widening disparities between the incomes of workers in non-agricultural and agricultural activities. It also adversely affects the welfare of the majority of the population, which is dependent on agriculture. This paper examines the trend in agricultural growth and factors underlying the slowdown and explores ways and means to bring about an acceleration.


conomic reforms initiated in India during 1991 have put Indian economy on a higher growth trajectory. Annual growth rate in total gross domestic product (GDP) has accelerated from below 6 per cent during the initial years of reforms to more than 8 per cent in the recent years. The approach paper to Eleventh Five-Year Plan finds that 8.5 per cent growth in GDP is feasible during the next five years. What now seems more challenging than growth in total GDP, is the sectoral composition of growth, which is related to the well-being of a very large segment of population. Agriculture, which accounted for more than 30 per cent of total GDP in the beginning of reforms failed to maintain its pre-reform growth or keep pace with growth in the non-agricultural sector [Chand 2005a]. On the contrary, it witnessed a sharp deceleration in growth after the mid-1990s.1 This happened despite the fact that agricultural productivity in most of the states was quite low and there was a lot of scope and potential for the growth of agricultural output.

Right from the Ninth Five-Year Plan (1996-97 to 2001-02) onwards, India has been targeting a more than 4 per cent growth rate in Indian agriculture, but the actual growth rate has not turned out to be even half of this target. The poor performance of agriculture against the background of an impressive growth of the overall economy is having serious implications. One, it is causing wide disparities between income in agriculture and nonagriculture. The slow growth of agriculture would not have caused an increase in disparities, if there was a commensurate decline in population dependent on agriculture. But this is not happening and the population dependent on agriculture is increasing.2 Two, as more than 50 per cent of the workforce and about same proportion of the total population of the country depends on agriculture for income and livelihood, slow growth in agriculture is putting them in distress. Against this backdrop, this paper examines the trend in agricultural growth and factors underlying slowdown in agriculture and explores ways and means to accelerate it. Due to large interstate variations in productivity, the performance of agriculture and resource endowments, and specificities related to agriculture, the analysis is extended to the state level.

Performance at All-India Level

The GDP of agriculture increased annually at more than 3 per cent during the 1980s which was considered a reasonably satisfactory performance of the sector. During 1991, the country initiated economic reforms aimed at far-reaching changes in regulations, fiscal policy, trade policy, exchange rate, role of market forces, private sector participation in economic activities, and government controls and intervention in market. The agricultural sector was not targeted directly by the reforms for a couple of years, but it was affected indirectly through changes in the exchange rate, export liberalisation and terms of trade resulting from disprotection to industry.

The only measure taken during the early years of reform that had a direct impact on agriculture was decontrol of fertilisers and reduction in the fertiliser subsidy.3 The disprotection to industry resulted in improvement in terms of trade for agriculture during the initial years of reforms. Another factor, which contributed positively to agricultural growth during the initial years of reform was a substantial hike in minimum support prices given by the government, mainly to reduce the gap between domestic and international prices [Chand 2005b], that resulted largely from devaluation of the overvalued exchange rate. The impact of these changes and various other factors was a small acceleration in the growth rate of agriculture during the first six years of reforms (Table 1). The growth rate of GDP in agriculture and allied sectors turned out to be 3.64 per cent during 1990-91 to 1996-97 which was 0.5 percentage points higher than the previous decade. In fact, during the early years of reforms, gap in the growth rate between agriculture and non-agriculture slightly narrowed down.

Disaggregation of agriculture into sub-sectors shows that fisheries and horticulture, which accounted for 4.6 per cent and 19.0 per cent of the value of output of agriculture and allied sectors, were the main sources for the acceleration in growth rate of agricultural output in the initial years of reforms (Tables 1 and 2). However, the situation for agriculture turned adverse with the beginning of 1997-98 and this covered all the sub-sectors of agriculture. The growth rates in output of fruits and vegetables decelerated from 5.92 per cent to 3.28 per cent, while fisheries witnessed a decline from 7.41 per cent to 4.30 per cent. The deceleration is also seen in the livestock sector. Output of nonhorticulture crops and cereal groups experienced nil growth after 1996-97. Output of the total crop sector showed an annual growth rate of mere 0.79 per cent while the agricultural sector excluding fisheries showed a growth rate of 1.65 per cent per annum. These growth rates are lower than the growth rates in rural population and workforce employed in agriculture. A clear implication of this growth trend is that the per capita or per worker income in agriculture is declining. This seems to be one of the factors for rising rural and agricultural distress in the country.

Economic and Political Weekly June 30, 2007

In contrast to the slowdown in agriculture, the GDP of the nonagricultural sector shows a robust and rising growth rate. Using the new base (1999-2000) of National Accounts Statistics, for which some of the data is available, annual growth rate in nonagricultural GDP after 2000-01 is 7.6 per cent, whereas the growth rate in agriculture is hardly 2 per cent.

Factors Related to Growth at National Level

In order to find out the reasons for the slowdown in the growth rate of agricultural output, we first estimated the effect of various factors on agricultural output and then examined change in these factors to link these changes to output growth in various periods. It was hypothesised that the level of agricultural output over time was affected by area, inputs like irrigation and fertiliser, prices, technology and infrastructure. Year to year changes in agricultural output were also influenced by weather, particularly monsoon rainfall. The effect of these various factors on agricultural output was estimated on the basis of the following functional relationship for the period 1970-71 to 2003-04:

GDPA = f(rainfall, terms of trade (ToT) between agriculture and non-agriculture, fertiliser, irrigation, crop intensity, institutional credit, public investment in agriculture).

Rainfall refers to the amount of rain received from June to September as a percentage of long-run average rainfall. The ToT for agriculture was estimated by taking the ratio of implicit price deflator of GDP agriculture and GDP non-agriculture at 199394 prices and base 1993-94=100. Institutional credit was taken as a sum of short-term and long-term direct agricultural loans advanced during the year by all institutional sources. Public investment in agriculture was taken as a stock of net fixed capital in public sector on March 31 of each year.4 All financial variables were expressed at 1993-94 prices. Fertiliser was measured as the amount of nitrogen, phosphorous, potassium (NPK) used during a year. Irrigation refers to gross cropped area.

Using all these variables in a single equation is not appropriate on econometric ground and it also poses serious problems of multicollinearity. Therefore, the relationship between agricultural output and factors affecting it was estimated by using different sets of variables as explanatory variables. The results of different formulations of econometric models are presented in (Table 3) along with their level of significance and other statistics. All the models show serious problem of autocorrelation which was overcome by including auto regressive term (AR(1)) as explanatory variable in all the models.

In model I, rainfall, terms of trade, public sector capital stock and institutional credit were used as explanatory variables. All these variables turned out to be statistically significant with level of significance varying from 0 to 2.1 per cent. Rainfall showed the most significant impact on output; 1 percentage increase in rainfall resulted in 0.21 per cent increase in GDP agriculture. Improvement in terms of trade for agriculture by 1 per cent led to a 0.42 per cent increase in output. Similarly, a 1 per cent increase in existing level of capital stock and institutional credit increased agricultural output by 0.61 and 0.14 per cent, respectively.

Fertiliser and irrigation are well known for raising agricultural output in the country. Fertiliser showed very high multicollinearity with Net Fixed Capital Stock (NFCS) of the public sector which rendered its coefficient non-significant (model 2) and was thus detrimental. However, when NFCS public sector was replaced by irrigation (gross irrigated area as per cent of gross cropped area) then both these variables turned significant without causing much effect on coefficient of the other factors. Inclusion of irrigation in place of NFCS public sector is justified on the ground that more than 90 per cent of public investment in agriculture is used for development of medium, major and minor irrigation [Chand 2002]. Elasticity of GDP agriculture with respect to fertiliser and irrigation was estimated to be 0.157 and 0.5274.

Progress and changes in various factors affecting agricultural output, in the corresponding period for which the growth rates were discussed above, are presented in (Table 4). The table shows that as compared to 1980s there was a sharp increase in the terms of trade for agriculture during the initial years of reforms. Agriculture prices relative to non-agriculture prices increased annually by 0.95 per cent. There was also some improvement in the growth of irrigation during the early years of reforms. Public sector investments did not grow during these years, and consequently, growth in the stock of public sector capital formation declined from 3.94 per cent to 1.87 per cent. However, private sector investments in these years showed more than three times growth as compared to 1980-81 to 1990-91. This resulted in the same growth rate in total capital stock in agriculture during 1990-91 to 1996-97 as seen during the decade of 1980s. The pace of expansion in gross cropped area and the pace of diversification were also as strong as 1980s. There was a sharp decline

Table 1: Growth Rate in GDP Agriculture and Non-Agriculture Before and After Reforms

Total culture Agri- Fishery Non
and Allied culture Agriculture
1980-81 to 1989-90* 5.52 3.12 3.29 5.93 6.88
1990-91 to 1996-97* 6.01 3.64 3.69 7.41 7.04
1996-97 to 2004-05* 5.72 1.66 1.65 4.30 7.06
2000-01 to 2005-06# 6.34 1.97 7.65

Notes: * At 1993-94 prices; # At 1999-2000 prices.

Source: National Accounts Statistics, various issues, Central Statistical Organisation, government of India, New Delhi.

Table 2: Growth Rate in Output of Various Sub-sectorsof Agriculture at 1993-94 Prices

Period Crop Livestock Fruits and Non-Horticulture Cereals Sector Vegetables Crops

1980-81 to 1989-90 2.71 4.84 2.42 2.77 3.15 1990-91 to 1996-97 3.22 4.12 5.92 2.59 2.23 1996-97 to 2004-05 0.79 3.67 3.28 0.05 0.02

Source: As in the Table 1.

Table 3: Estimates of Effect of Different Factors on Outputof Agriculture: 1971 to 2004

(Dependent variable: log (GDP agriculture at 1993-94 prices))

Explanatory Model I Model II Model III Variables Coefficient Prob Coefficient Prob Coefficient Prob

C 0.7689 0.6010 4.8016 0.7024 -3.7524 0.1964 Rainfall (per cent of long

run average (LRA) 0.2189 0.0000 0.2280 0.0477 0.1893 0.0000 Terms of trade (-1) 0.4211 0.0082 0.4386 0.1497 0.3164 0.0447 Public sector capital

stock (-1) 0.6136 0.0010 0.4812 0.0135 Institutional credit 0.1442 0.0210 0.1528 0.0452 0.1168 0.0551 Fertiliser: NPK 0.1570 0.0827 Crop intensity (per cent) 1.4314 0.0886 Irrigation (per cent) 0.5274 0.3076 AR(1) 0.7564 0.0000 0.6272 0.1506 0.7528 0.0000 Important statistics: R-squared 0.9871 0.0000 0.9884 0.9886 0.0000 Adjusted R-squared 0.9846 0.9857 0.9858 Log likelihood 66.2511 69.4678 68.1705 Durbin-Watson stat 2.0726 1.8409 2.0022

Economic and Political Weekly June 30, 2007 in the growth of fertiliser use and electricity used in agriculture, but this was more than compensated by expansion in area, irrigation, diversification5 and movement of terms of trade in favour of agriculture.

After 1996-97, almost all factors except credit, turned unfavourable for the growth of agricultural output. Net sown area witnessed a decline at the rate of 0.55 per cent which was not compensated by an increase in cropping intensity. Gross cropped area also declined on the trend. The biggest setback to output of the crop sector came from the decline in terms of trade for agriculture and slowdown in expansion of irrigation. The terms of trade for agriculture after 1996-97 declined annually by 1.63 per cent. Liberalisation of trade has led to increased integration of the domestic market with the international market. Accordingly, a downward trend in international prices of agricultural commodities after 1997-98 has been transmitted to domestic prices resulting in a deterioration in ToT for agriculture.

As compared to 2.62 per cent annual growth in irrigated area during 1990-91 to 1996-97, the later period shows an annual expansion in irrigation by just 0.51 per cent. The main causes of slowdown in irrigation are (a) deceleration in public and private sector capital formation after 1996-97, (b) decline in electric power to agriculture most of which is used for tubewells, and

  • (c) stress on water resources. The pace of diversification also slowed down in the recent years. Thus, the main factors which led to a slowdown in agriculture at national level after 1996-97 are: (a) decline in the area under cultivation, which seems to be a result of expanding urbanisation and industrialisation,
  • (b) deterioration in the terms of trade for agriculture, (c) stagnant crop intensity, (d) poor progress of irrigation and fertiliser,
  • (e) decline in supply of electricity to agriculture, and (f) slowdown in diversification.
  • One more factor related to the performance of agricultural sector is risk in agriculture. Risk in agriculture, measured as deviation from trend in GDP at current prices, shows a more than 50 per cent increase between 1985-86 and 1995-96 and 1995-96 and 2004-05 (Table 5).

    Regional Scenario of Agricultural Growth

    There is a clear evidence of sharp deceleration in agricultural growth at the all-India level. However, due to very large inter state variations in the agricultural aspects of various states, it is pertinent to look at the state level growth scenario. The level of agriculture productivity, measured by value added in agriculture (crop and livestock) per hectare of net sown area, and, growth rate in net state domestic product (NSDP) agriculture during 1984-85 to 1995-96 (refereed as Period I) and 1995-96 to 2004-05 (referred as Period II) are presented in (Table 6). States are arranged in an ascending order of productivity during mid1990s. Per hectare productivity during the mid-1980s was highest in Kerala closely followed by West Bengal. Jammu and Kashmir ranked third and Punjab ranked fourth. The lowest level of agricultural productivity was recorded in Rajasthan, followed by Madhya Pradesh. Maharashtra ranked third from bottom with per hectare productivity of Rs 2,863 which was just 58 per cent of all-India average.

    Ranking of various states based on the productivity witnessed profound changes during next 10 years after 1984-85 because of variations in the growth rate of NSDP agriculture. It is interesting to note that the two states, namely, Rajasthan and Maharashtra, which were among the bottom three states in term of level of productivity in mid-1980s, topped in the growth rate of NSDP agriculture during 1984-85 to1995-96. These states recorded 5.52 and 6.66 per cent annual growth rate in value added in agriculture during Period I. Another low productivity state which witnessed more than 5 per cent annual growth in output during the first period was Gujarat. All the states except Orissa, which had productivity lower than the national average, witnessed a higher growth in productivity as compared to the national average during 1984-85 to 1995-96. This shows that the growth experience during the decade before 1995-96 favoured agriculturally underdeveloped states more than the other states.

    Agriculturally developed states, in terms of productivity, namely, Punjab and West Bengal, also witnessed a reasonably high growth in output during 1984-85 to 1995-96. However, the growth rate in Kerala was just close to the national average. Haryana witnessed a relatively high growth (4.60 per cent) in this period. Agricultural output in Tamil Nadu also increased at a high rate between mid-1980s and mid-1990s. This decade turned out to be very adverse for Orissa and Bihar (including Jharkhand) both of which witnessed very high year to year fluctuations in agricultural output with a negative growth rate.

    High growth rates in NSDP agriculture during 1984-85 to 1995-96 helped West Bengal and Punjab maintain their lead in agricultural productivity towards the mid-1990s. But Rajasthan, despite a high growth rate during the first period, remained at the bottom in agricultural productivity. On the other hand, Kerala maintained the top position despite a relatively moderate growth rate.

    The growth experience of the decade after 1995-96 is very different than that of the previous decade. It turned adverse for most of the states. The most affected state was Kerala, where the NSDP in agriculture shows an annual decline of 3.54 per cent. This relegated Kerala from top position to fifth position in productivity per unit of land. The other states to witnessed a declining trend in NSDP agriculture during 1995-96 to 2004-05 were Tamil Nadu and Madhya Pradesh (both new Madhya Pradesh and Chhattisgarh).

    Table 4: Growth Rate in Area, Input Use, Credit and CapitalFormation in Agriculture Before and After Reforms

    (Per cent/year)

    Variable 1980-81 to 1990-91 to 1996-97 to 1990-91 1996-97 2004-05

    Gross cropped area 0.430 0.430 -0.480 Net sown area -0.080 0.040 -0.550 Cropping intensity 0.510 0.390 0.070 Gross irrigated area 2.280 2.620 0.510 NPK use/ha NSA 8.255 2.401 2.044 Electricity consumed in agriculture/ha NSA 14.162 9.390 -0.159 Area witnessed crop shift (per cent) 5.600 5.600 4.800 Terms of trade 0.189 0.947 -1.630 Public sector net fixed capital stock/ha NSA 3.939 1.872 1.976 Private sector net fixed capital stock/ha NSA 0.642 2.134 1.721 Total net fixed capital stock/ha NSA 2.085 2.010 1.838 Credit supply/ha NSA 3.810 7.466 15.336

    Note: Growth rates in the area and crop intensity are up to year 2003-04. Sources: (1) National Accounts Statistics, various issues.

  • (2) Agricultural Statistics at a Glance, Ministry of Agriculture, Government of India, New Delhi.
  • (3) Economic Survey, Ministry of Finance, GoI, New Delhi.
  • Table 5: Risk Revealed by Instability@ in GDP Agriculture

    Period Instability (Per Cent)

    1985-96 to 1995-96 4.16 1995-96 to 2004-05 6.58

    Note: @ Instability indices measured as: stdev [ln(Yt+1/Yt)]. Source: See Table 1.

    Economic and Political Weekly June 30, 2007

    After witnessing a growth rate of 6.66 per cent during 198485 to 1995-96, Maharashtra’s NSDP in agriculture remained almost stagnant during the next 10 years. Similar was the experience of Orissa, where agricultural output remained almost stagnant even after witnessing a negative growth during 1984-85 to 1995-96. Except Bihar, Jammu and Kashmir and Himachal Pradesh, all other states showed a deceleration in growth of NSDP agriculture after 1995-96. Agriculturally developed states like West Bengal and Punjab had been able to maintain a growth rate higher than the national average during 1995-96 to 2004-05. However, agriculturally underdeveloped states like Rajasthan, Maharashtra, Karnataka, Gujarat, Orissa and Madhya Pradesh witnessed a less than 0.50 per cent growth rate after 1995-96, which was very low in itself and as compared to national average of 1.85 per cent.

    The growth experience of the two periods shows that before 1995-96 the growth rate of agriculture in most of low productivity states was much higher than the national average and after 199596 their growth rates not only declined, but also turned out to be much lower than the national average.

    Factors Affecting Growth at State Level

    Area under irrigation and use of fertiliser and electric power show a moderate to high increase in various states during the first period (1985-86 to 1995-96). The only exception to this was the use of power in agriculture in Himachal Pradesh. Net sown area in all the states either showed an increase or a stagnation, except in Bihar and Himachal Pradesh, which showed a slight decline during 1985-86 to 1995-96. During the second period, i e, 1995-96 to 2003-04 input use in most of the states either declined or increased at a slower rate as compared to the first period, with a few exceptions (Table 7).

    After 1995-96, net sown area showed a decline in all the states except Bihar, Jammu and Kashmir and Punjab. The decline was more than 2 per cent per annum in Tamil Nadu and more than half a per cent in Orissa, Andhra Pradesh, Madhya Pradesh, Karnataka and Kerala. Net sown area remained stagnant in Uttar Pradesh and in West Bengal. Area under irrigation followed a sharp decline in Andhra Pradesh, Tamil Nadu, Orissa, Rajasthan and Kerala. The magnitude of decline varied between 0.57 and

    3.01 per cent per annum.

    Expansion of irrigation slowed down in all the states. Use of fertiliser declined at more than 4.6 per cent in Madhya Pradesh. Other states which recorded a decline in fertiliser use were Rajasthan, Tamil Nadu and Gujarat. Only four states, namely, Assam, Himachal Pradesh, Jammu and Kashmir and Punjab showed higher growth in fertiliser after 1995-96 as compared to the period between 1985-86 and 1995-96. All the remaining states show lower growth in fertiliser after 1995-96 as compared to the previous decade. Power supply to agriculture witnessed a setback after 1995-96 in all the states except Himachal Pradesh which showed close to 9 per cent growth rate in power supplied to agriculture. States like Bihar, Jammu and Kashmir, Kerala, Madhya Pradesh, Maharashtra, Orissa, Rajasthan, Uttar Pradesh and West Bengal experienced a decline in power supply to agriculture while the remaining states witnessed lower growth rate of power supply in the second period.

    Pace of crop diversification slowed down in all the states except Tamil Nadu and Maharashtra. The pace of diversification remained high in Rajasthan and Andhra Pradesh though it was lower compared to 1985-86 to 1995-96. It is interesting to observe that even high level of diversification in Tamil Nadu, Maharashtra and Rajasthan did not help in maintaining the tempo of growth in

    Table 6: Level of Aggregate Productivity and Growth in NSDP Agriculture in Various States

    NSDP Ag/Ha NSA at Trend Growth Rate in NSDP Current Prices Agri at 1993-94 Prices State 1984-85 1994-95 2003-04 1984-85 1995-96 and and and to to 1985-86 1995-96 2004-05 1995-96 2004-05

    Rajasthan 2264 7912 13984 5.52 0.30 Chhattisgarh 8586 13013 -0.91 Madhya Pradesh (old) 2319 9406 16745 3.63 -0.23 Madhya Pradesh (new) 9667 17939 -0.05 Maharashtra 2863 12712 19375 6.66 0.10 Orissa 4168 13499 26115 -1.18 0.11 Gujarat 3748 14175 26404 5.09 0.48 Karnataka 3496 14481 19842 3.92 0.03 All-India 4973 17763 34349 3.62 1.85 Bihar (new) 18622 28915 2.82 Bihar (old) 6654 18743 32654 -1.71 3.51 Jharkhand 19124 44727 5.39 Andhra Pradesh 4478 20204 40653 3.18 2.69 Uttar Pradesh (new) 20413 39811 1.91 Uttar Pradesh (old) 5863 20896 40426 2.82 1.87 Assam 6617 23283 40671 1.65 0.95 Tamil Nadu 5338 24228 36677 4.95 -1.36 Himachal Pradesh 6561 25270 71775 1.64 3.51 Haryana 6672 26604 48154 4.60 1.98 Jammu and Kashmir 8736 30554 69113 2.18 3.25 Uttranchal 31296 53743 1.36 West Bengal 9499 34863 72295 4.63 2.67 Punjab 8467 35417 66864 4.00 2.16 Kerala 9564 38370 56341 3.60 -3.54

    Sources: (1) State Domestic Product (State Series), Central StatisticalOrganisation, GoI, New Delhi, various issues (available at

    (2) Agricultural Statistics at a Glance, Ministry of Agriculture, GoI, New Delhi.

    Table 7: Growth Rate in Factors Affecting Growthof Agricultural Output

    State Period Net Irrigated NPK Power ChangeSown Area Consum-in Crop Area (Per Cent) ption Pattern in Agri (Per Cent)

    Andhra 1985-86 to 1995-96 0.11 1.85 7.01 15.52 16.4 Pradesh 1995-96 to 2003-04 -0.71 -1.70 0.03 4.18 9.9 Assam 1985-86 to 1995-96 0.22 0.00 10.36 16.99 5.3

    1995-96 to 2003-04 -0.03 0.00 19.92 NAC 4.8 Bihar 1985-86 to 1995-96 -0.54 1.37 2.40 4.44 5.7 1995-96 to 2003-04 0.26 0.58 0.79 -4.33 3.2 Gujarat 1985-86 to 1995-96 -0.01 3.62 6.84 17.92 14.3 1995-96 to 2003-04 -0.19 0.63 -0.74 5.36 8.7 Haryana 1985-86 to 1995-96 0.06 2.30 7.18 11.41 15.9 1995-96 to 2003-04 -0.37 1.67 3.37 4.26 9.4 Himachal 1985-86 to 1995-96 -0.26 0.23 1.76 -6.83 4.0 Pradesh 1995-96 to 2003-04 -0.31 0.51 5.31 8.75 3.0 Jammu and 1985-86 to 1995-96 0.14 0.71 2.95 17.83 3.8 Kashmir 1995-96 to 2003-04 0.29 0.14 4.14 -16.68 5.2 Karnataka 1985-86 to 1995-96 0.13 3.51 4.89 18.00 15.0 1995-96 to 2003-04 -0.68 0.28 3.22 1.74 11.0 Kerala 1985-86 to 1995-96 0.27 1.31 2.52 10.48 8.5 1995-96 to 2003-04 -0.50 -0.57 -0.26 -8.16 8.0 Madhya 1985-86 to 1995-96 0.30 7.46 6.93 28.49 13.1 Pradesh 1995-96 to 2003-04 -0.67 1.50 -4.66 -7.72 7.3 Maharashtra 1985-86 to 1995-96 -0.11 3.36 8.11 13.62 10.4 1995-96 to 2003-04 -0.28 2.43 2.48 -5.73 11.1 Orissa 1985-86 to 1995-96 0.10 2.08 5.10 16.92 23.1 1995-96 to 2003-04 -0.80 -1.06 2.84 -7.03 7.7 Punjab 1985-86 to 1995-96 -0.05 1.26 1.58 7.66 10.3 1995-96 to 2003-04 0.30 0.65 1.82 -0.73 6.6 Rajasthan 1985-86 to 1995-96 1.68 4.92 12.29 11.56 10.7 1995-96 to 2003-04 -0.23 -0.89 -2.35 -1.19 10.5 Tamil Nadu 1985-86 to 1995-96 0.02 1.64 2.04 9.63 12.5 1995-96 to 2003-04 -2.09 -3.01 -0.41 4.92 18.0 Uttar Pradesh 1985-86 to 1995-96 0.08 3.16 3.45 9.09 8.1 1995-96 to 2003-04 0.05 1.41 2.65 -10.06 7.7 West Bengal 1985-86 to 1995-96 0.11 2.93 4.99 27.35 9.5 1995-96 to 2003-04 0.00 NAC 4.38 -7.05 4.7 All-India 1985-86 to 1995-96 0.29 2.91 5.20 13.36 7.9 1995-96 to 2003-04 -0.46 0.68 2.10 -0.46 5.1

    NAC: Not available or not comparable.

    Sources: (1) Land Use Statistics at a Glance, Directorate of Economics and Statistics, Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India, New Delhi.

    (2) Agricultural Statistics at a Glance, Ministry of Agriculture, Government of India, New Delhi.

    Economic and Political Weekly June 30, 2007 these states. We tried to explore this further, and from the secondary data, it seems as if farmers in these states are shifting crop pattern away from cash crops to low value crops. The reason for this could be a stress on water resources and high level of market risk associated with high value crops. However, this needs further probing.

    Options for Revival of Agricultural Growth

    Some of the important causes for slowdown and poor growth of agriculture are obvious from the results discussed above. Most of the states have witnessed either a slowdown in growth or a negative growth in the area under irrigation, application of fertiliser, use of electric power used in agriculture and cropping intensity. Even the net cultivated area is also showing a decline in some of the states. Agricultural diversification, which is generally considered as a shift in resources from low value crops to high value crops also shows a slowdown after 1995-96. In some places diversification seems to be moving in a reverse direction – with crop pattern shifting to low value crops. In order to find pragmatic options to revive agricultural growth, it is pertinent to explore the possibilities of raising level of factors associated with growth from their current level, which is presented in Table 8.

    Despite progress in irrigation, the level of crop intensity continues to be quiet low in most of the states. In Andhra Pradesh, Karnataka, Tamil Nadu, Madhya Pradesh, Maharashtra, Gujarat and Rajasthan more than one crop is taken on less than 30 per cent of area under cultivation. This shows there is considerable scope to raise output through an expansion of area under double cropping.

    Fertiliser use in the recent years is as low as 28 kg per/hectare in Assam and as high as 328 kg per/hectare of net sown area in Punjab. Similarly, fertiliser use is below 40 kg per hectare in Rajasthan and Madhya Pradesh, and 55 kg in Orissa. Increasing fertiliser use is a significant option for raising agricultural output in most of the states. Elasticity of crop output with respect to fertiliser use is estimated to vary between 0.134 and 0.700 in various states [Chand 2005a].

    Consumption of electric power per hectare was just 9 kWh in Assam, 30 kWh in Orissa and only 34 kWh in Himachal Pradesh. Electric power used in agriculture varies between 80 and 300 kWh in Kerala, Jammu and Kashmir, Bihar, Madhya Pradesh, West Bengal, UP and Rajasthan, whereas it exceeded 1,000 kWh in Andhra Pradesh, Gujarat, Haryana, Punjab and Tamil Nadu. Increase in electric supply to agriculture is important for promoting irrigation and thus raising output.

    The coverage of irrigation in various states varies from 1497 per cent. As can be seen from Table 8, there is a large gap between the current level and the ultimate irrigation potential except in the case of Punjab, Haryana and Rajasthan which have already exceeded the potential irrigation level. Bihar has water resources to extend irrigation to entire gross cropped area, with a further scope to provide irrigation to expansion in gross cropped area through an increased cropping intensity. Similarly, Uttar Pradesh has the potential to raise the level of irrigation to 95 per cent from the present level of 68.4 per cent. In Orissa and Assam irrigation can be extended to more than two-thirds of cropped area, whereas at present this facility is available to less than 27 per cent area. Elasticity of crop output with respect to irrigation is estimated to vary between 0.303 and 1.004 in various states [Chand 2005a].

    Because of low use of inputs, level of productivity of most of the crops is quite low in most of the states. There are several reasons for this. One, a poor network of input distribution. Two, a lack of resources and non-availability of adequate credit for purchase of modern inputs. Three, decline or stagnation in public investments in irrigation and other infrastructure during the 8th and 9th Five-Year Plans in real terms.

    Improved technology is most important for the growth of output. Available evidence shows that there is a big gap between the level of yield with improved farm practices in farmers’ fields and the yield with practices followed by the farmers. Besides the need for extension to transfer improved technology to farmers, the critical factor in this is the availability of quality seed. Most of the farmers do not distinguish between “seed and grain” and use common grain as seed. Research institutes have very limited capacity for seed multiplication and they can supply only quality seeds in small quantity. So far production and supply of quality seed were mainly entrusted to public sector agencies, namely, the National Seeds Corporation and the state level seed corporations. Compared to the need for quality seed in the country, these corporations as such are serving a limited purpose. India needs to develop a competitive market for seeds by expanding the role of public sector and by encouraging private sector in seed business in a big way. We feel that transferring some of the subsidies from other inputs to seed would be more paying.


    The growth rate analysis shows that the initial years of reforms were somewhat favourable for agricultural growth, but the post-WTO period witnessed a sharp decline in the growth rate of almost all sub-sectors and commodity groups in the agricultural sector. Another disquieting aspect of the recent growth process is that the agricultural and non-agricultural sectors are on a disparate growth path. At the state level, the growth rate has turned negative in four out of 20 major states while six states show a growth rate ranging between 0.10 and 0.95 per cent. Further, the growth rate of agriculture in most of the low productivity states was much higher than the national average during 1984-85 to 1995-96. However, after 1995-96, their growth rates not only declined, but also turned out to be much lower than the national average. The main reasons for deceleration and stagnation in agricultural output after 1995-96 are a slowdown in growth of fertiliser use, irrigation, and energy (electric power) in some cases,

    Table 8: Level of Cropping Intensity, Irrigation, Fertiliser andPower Used in Agriculture during 2001-02 and 2003-04

    State Cropping NPK Power Irrigated Irrigation Intensity Kg/ Cons/ha Area Actual Potential as (Per Cent) Hectare KWh (Per Cent) Per Cent of Current GCA

    Andhra Pradesh 122 176 1240 41.1 75.6 Assam 146 28 9 14.3 66.8 Bihar 135 105 123 47.6 123.5 Gujarat 114 89 1577 35.9 44.6 Haryana 180 270 1415 83.2 71.7 Himachal Pradesh 173 80 34 19.3 35.0 Jammu and Kashmir 148 91 160 40.5 72.4 Karnataka 116 118 832 25.0 39.7 Kerala 135 87 85 14.9 70.8 Madhya Pradesh 127 38 274 26.1 44.7 Maharashtra 127 95 549 17.1 32.7 Orissa 150 55 30 26.6 69.9 Punjab 186 328 1374 96.6 82.5 Rajasthan 128 40 244 29.5 25.2 Tamil Nadu 117 171 1927 51.0 72.7 Uttar Pradesh 154 188 292 68.4 94.8 West Bengal 176 213 178 50.8 62.7 All-India 135 121 598 39.9 60.7

    Source: See Table 7.

    Economic and Political Weekly June 30, 2007

    a stagnation or even a decline in other cases. Crop intensity and area under cultivation have also shown either a poor growth or a decline. Diversification towards high-value crops has also slowed down and in some cases farmers have been diversifying away from the high-value crops towards low-value, less risky and less input-demanding crops. The terms of trade for agriculture have shown a deterioration and agricultural incomes faced an increased instability in the recent years. Low level of input use and low productivity in most of the states offer some ray of hope to revive agricultural growth, but this would require simultaneous efforts on several fronts. These include (a) stepping up investments and putting in place suitable institutional mechanisms to exploit irrigation potential that exists in most of the states;

    (b) increasing power supply to the sector; (c) promoting fertiliser use by expanding the distribution network and improving credit facilities for farmers; (d) establishing competitive seed markets and ensuring attractive prices for seeds; (e) improvement in terms of trade for agriculture; and (f) measures to mitigate risk in farming.




    1 According to the XIth Plan approach paper, agricultural growth rate has fallen from 3.2 per cent during 1980 and 1996-97 to a trend average of

    1.5 per cent subsequently.

    2 This is evident from growth rate in workforce in agriculture and rural population which showed an annual increase of 2.36 per cent and 1.61 per cent respectively between 1991 and 2001.

    3 However, subsidy on nitrogenous fertilisers was subsequently restored and other fertilisers remained decontrolled. This changed prices in favour of nitrogenous fertilisers, which accentuated in balances in use of different type of fertiliser.

    4 Some studies use public investment or capital formation made during a year to estimate impact of public sector capital formation or infrastructure investments on output. This represents only an addition to stock and amounts to using first difference of the variable of capital stock. As public investment has a life of several years, we feel that cumulative value of net fixed investments reported as NFC, stock is more relevant for growth of output than investment made during one year.

    5 Extent of diversification was captured by estimating changes in area under different crops between two points of time.


    Chand, Ramesh (2000): ‘Emerging Trends and Regional Variations in Agricultural Investments and Their Implications for Growth and Equity’, Policy Paper 11, National Centre for Agricultural Economics and Policy Research, New Delhi.

  • (2005a): ‘Exploring Possibilities of Achieving Four Per Cent Growth Rate in Indian Agriculture’, NCAP–Working Paper (01)/2005, National Centre for Agricultural Economics and Policy Research, New Delhi.
  • (2005b): ‘Whither India’s Food Policy: From Food Security to Food Deprivation’, Economic and Political Weekly, 40 (12): 1055-1061, March 12.
  • Planning Commission (2006): Approach Paper to 11th Five-Year Plan, Government of India, New Delhi.

    Life Eternal through Learning NATIONAL COUNCIL OF EDUCATIONAL RESEARCH AND TRAINING Sri Aurobindo Marg, New Delhi-110 016
    JUNIOR PROJECT FELLOWS (JPFs) REQUIRED If you are concerned about young children and wish to make their school life happy, stimulating and exciting, believe that it is important for teachers to be sensitive to every child’s needs, interests and expectations; you feel exams and tests cause stress, anxiety and fear amongst children and that there could be easier ways of assessing and improving their learning, then here is an opportunity for you. The National Council of Educational Research and Training (NCERT) is an apex body working for improving all aspects related to school education in the country. The NCERT has recently brought out the National Curriculum Framework (NCF)-2005, syllabi have been prepared and instructional materials are being developed/produced in a phased manner. The NCF-2005 propounds a significant pedagogical shift in education towards a constructive paradigm for learning and teaching, which would require suitable adjustment in textbook writing, classroom transaction and learner assessment. To translate this vision into practice, the Department of Elementary Education (DEE), NCERT, has undertaken a major programme of developing a Source Book on Learning Assessment at the Primary Level since June 2006. The next phase in the programme is trialling the draft Source Book document in 10 selected states in India. For this, the Department needs young people to work in schools for a period of six months in the selected states. Job Profile: Working closely with teachers in translating ideas in the Source Book into classroom practice for which school visits will be undertaken; Promote Continuous Comprehensive Evaluation (CCE) of every child, based on the Source Book material; Observe, monitor, record and report back to other functionaries about what is happening in classrooms; Identify current practices being used for pupil assessment and notice the shift in this approach through the use of the source book; Dialogue with teachers and the community on how to further improve the Source Book material. Essential Qualification: Masters Degree in Social Sciences/ Humanities/ Science with 55% marks or B+ Grade and Fluency in English and any one of the languages, namely: Hindi, Tamil, Oriya, Konkani, Marathi, Malayalam and Assamese. Desirable Qualification: NET/SLET; Experience of working in schools with young children; Working knowledge of computer and Willingness to travel extensively. Age Limit: 30 years (Relaxed up to five years for SC/ST/Female candidates) Tenure: Assignment is purely temporary for a period of six months. Salary Structure: Rs.8000/- per month (consolidated) with NET/SLET and Rs. 7000/- per month (consolidated) without NET/SLET. Travel costs will be taken care of for visits to schools, meetings, etc. under the project; Stay at district/ block level arrangements to be made by candidate herself/himself Field trailing will be undertaken in 10 states at the district level namely: Assam (Morigaon, Darrang), Rajasthan (Jaipur, Tonk), Tamil Nadu (Kancheepuram, Thiruvellore), Maharashtra (Jalna, Thane), Orissa (Khurda, Nayagarh), Jharkhand (Ranchi, Jamshedpur), Mizoram (Aizwal, Kolasip), Himachal Pradesh (Shimla, Solan), Kerala (Trivandrum, Kasargod), Goa (North, South). Candidates may apply on plain papers giving the above details along with bio data by the latest 10 July-07 addressed to The Principal, NERIE, Jowai Road, Laitumkhrah, Shillong for the states of Assam and Mizoram; The Principal, RIE, Shamla Hills, Bhopal-462013 for Maharashtra and Goa; The Principal, RIE, Manasagangotri, Mysore-570006 for Tamil Nadu and Kerala; The Principal, RIE, Pushker Road, Ajmer-305004 for Rajasthan and Himachal Pradesh; and The Principal, RIE, Sachivalaya Marg, Bhubaneswar-751022 for Orissa.

    Economic and Political Weekly June 30, 2007

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