Chapter-I: Introduction and Review of Literature
1.3: Agriculture Production in India
1.5.1 Growth Rate of Agriculture and Crop Output in India
Indian agriculture has witnessed wide variations in growth performance during a span of seven decades after independence. This performance has been discussed by classifying it in different phases. Chand and Parappurathu (2011) of National Centre for Agricultural Economics and Policy Research, New Delhi identified five distinct phases of growth of Indian agriculture and outlined below as:
Phase-I: Pre-green revolution period (1950-51 to 1967-68) Phase-II: Early green revolution period (1968-69 to 1985-86)
Phase-III: Period of wider technology dissemination (1986-87 to 1996-97) Phase-IV: Post-reform period (1997-98 to 2005-06) and
Phase-V: Period of recovery (2006-07 to 2009-10)
The pre-green revolution period was characterized by steep decline in growth in GDP agriculture, with decadal growth rates found to plummet sharply from 2.78 percent to 1.06 percent. The overall agricultural growth rate in the Nehruvian period was impressive, but by mid-sixties agricultural sector was jolted by repeated droughts and food shortage. The early green revolution period observed a visible reversal of growth in
GDP agriculture. The decadal growth rate reached near 3 percent by the decade ending with 1985-86. The period of wider dissemination of technology was characterized by sustained growth in the sector for over a decade peaking at the year 1996-97. The deceleration of growth was started from 1997-98 onwards and a clear indication of slumping of the agricultural sector was visible till the year 2005-06. This slump is widely perceived as an outcome of substantial diversion of resources away from agriculture to other sectors of the economy. However, a significant recovery of growth is observed in the last few years that has pushed the decadal growth rate of agriculture above 3 percent.4 The target of 4 percent growth in agriculture and allied sector was surpassed during the Eleventh Plan, the highest achieved in any plan period. But the average growth rate of first four years of the 12th Plan has fallen to 1.6 percent.
Bhalla and Singh (2009) did a similar periodization with a shorter time span. The economic planning in India after 1951 and the new agricultural technology introduced during the mid1960s led to significant growth in yield and output levels of some crops and of aggregate crop output in India. In the initial period, the new technology was confined to wheat in the irrigated north-western region of India, its benefits mostly accrued to areas growing wheat. But over time, new technology spread to rice and some other crops and its geographical coverage extended to many other parts of the country.
By 2003-06, despite considerable inter-state variation, most states in India were able to share the gains of the new technology. The deepening and extension of new technology led to significant growth of agricultural output (Bhalla and Singh, 2009). Table 1.7 shows the growth of annual average value of output and annual compound growth rate of states of India grouped into four regions, viz. North-Western, Central, Southern and Eastern and compared this growth in Assam with the regions and all India level.
Table-1.7: Region-wise levels and growth of value output during 1962-65, 1970-73, 1980-83, 1990-93 and 2003-06: (Value of 44 crops at 1990-93 constant prices)
Region Annual Average Value of Output (in Rs. Million) CAGR of Output (in %)*
1962-65 1970-73 1980-83 1990-93 2003-06 (A) (B) (C) (D) North-Western 136926 181727 249331 353444 433389 3.39 3.55 1.58 2.85
Central 157469 166909 227231 313613 469240 2.06 3.27 3.15 2.70
Southern 155230 187691 214796 300455 319549 1.82 3.41 0.48 1.78
4 Chand, R. & S. Parappurathu. Historical and Spatial Trends in Agriculture: Growth Analysis at National and State level in India, National Centre for Agricultural Economics and Policy Research, New Delhi.
Eastern 111298 126032 140488 200274 227919 1.30 3.61 1.00 1.76
Assam 15,039 17419 22964 29154 31798 2.38 2.42 0.67 1.84
All-India 565643 666706 843474 1174471 1469719 2.24 3.37 1.74 2.36
CV (%) 54.19 51.07 118.59 43.95
Note: North-West region includes states of Haryana, Himachal Pradesh, J & K, Punjab and U.P.
Central region includes states of Gujrat, M.P., Maharashtra and Rajasthan Southern region includes states of Andhra Pradesh, Karnataka, Kerala and T.N.
Eastern Region includes states of Assam, Bihar Orissa and W.B.
*per cent Annual Compound Growth Rate: (A) =1980-83/1962-65; (B) = 1990-93/1980-83; (C) =2003-06/1990-93 and (D) =2003-06/1962-65: CV: Coefficient of Variation
Source: Bhalla and Singh, 2009.
During the entire period from 1962-65 to 2003-06, total agricultural output (value of 44 crops) in India at constant 1990-93 prices increased at a CAGR of 2.36 percent. During this period, the highest output growth rate of 2.85 percent per annum was recorded by the north-western region of India, followed by the central region (2.70%) and southern region (1.78%). The lowest growth rate of 1.76 percent was registered by the eastern region where the CAGR of Assam was 1.84 percent (better than eastern region CAGR) during the entire period. The new technology was mainly beneficial for wheat which is the main crop of north western states of India while it had modest impact on rice, the main foodgrain crops of eastern region. During the initial period of Green Revolution (1962-65 to 1980-83), all states in the north-western region registered high growth rates of agricultural output. Assam recorded highest CAGR (2.38%) in the eastern region during this period.
As noted by Bhalla and Singh (2009), the period from 1980-83 to 1990-93 (maturing of Green Revolution) makes a turning point in India‟s agricultural development. At the all-India level, the growth rate of crop output accelerated from 2.24 percent per annum in initial period to 3.37 percent per annum in the maturing period.
Table1.7 shows that during the period of 1980s agricultural growth spread throughout all regions in India. During this maturing period agricultural growth rate in eastern India as well as in Assam was highest in the entire period from 1962-65 to 2003-06.
Agricultural growth during 1990-93 to 2003-06 (post-liberalization period) reflects the impact of economic reforms on agricultural performance. As it is clear from table 1.7, the period marks by sharp deceleration in agricultural growth rate at the all India level and in all regions. At the all-India level, the output growth decelerated from 3.37 percent per annum during 1980-83 to 1990-93 (pre-reform era) to only 1.74 percent
per annum during 1990-93 to 2003-06 (post-reform era) which reflects the negative impact of economic reforms on agricultural performance in India. During the period, the growth rate of agricultural output of Assam decelerated to 0.67 percent per annum which was lower than the eastern region‟s growth rate. Thus, regional inequalities were accentuated during this period. The main reason for the deceleration of growth during the post-reform period was decline in investment in irrigation and other rural infrastructure (Bhalla and Singh, 2009).
Sen (2011) said, “by taking the long time series data of Indian agriculture output or GDP from agriculture, it is difficult to find a positive growth continuously for more than four years. Now, it is more than eight years since we had negative growth. The overall GDP is growing at over 9 percent per annum while agriculture is growing at about 3 to 3.5 percent and the farmers are obviously falling behind.” The main component of growth of value output is growth of yield, since there is not much scope to expand the sown area. Productivity per acre has fluctuated much more than sown area, and output has grown mainly through increase in productivity per acre. Fluctuations in productivity are measured by the co-efficient of variation and they were found to be highest during 1990-93 to 2003-06, the post-reform period.