IDEAS home Printed from https://ideas.repec.org/a/ags/aolpei/327260.html
   My bibliography  Save this article

A Historical Cum Empirical Overview of Agriculture Spending and Output Nexus in India

Author

Listed:
  • Hassan, Samir Ul
  • Khanday, Shafi Ahmad
  • Ahmad, Masroor
  • Mishra, Biswambhara
  • Rymbai, Motika Sinha

Abstract

This research aims to have a holistic view of the relationship between agriculture outcome/output and agricultural spending in India. The unique part of the study is that it highlighted the nexus between agriculture outputs from a historical point of view. The empirical part of this study is analyzed using the development of the co-integration method followed by the VECM model. The empirical analysis shows -a long-run association between agriculture spending and production, and this feedback is bidirectional. Agricultural production positively responds to agricultural spending in India both in the short and long run, especially in sowing seasons. However, the exciting finding of the study is that the speed of adjustment of agricultural spending on output is plodding. This implies that any shock of the agricultural production can be corrected by agricultural spending by just 20 percent, and it will take more than four years to stabilize the agricultural output with agricultural expenditure. Thus the tendency of agrarian spending to stabilize agrarian output in India is not so encouraging.

Suggested Citation

  • Hassan, Samir Ul & Khanday, Shafi Ahmad & Ahmad, Masroor & Mishra, Biswambhara & Rymbai, Motika Sinha, 2022. "A Historical Cum Empirical Overview of Agriculture Spending and Output Nexus in India," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(3), September.
    • Handle: RePEc:ags:aolpei:327260
    DOI: 10.22004/ag.econ.327260
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/327260/files/544_agris-on-line-3-2022-hassan-khanday-ahmad-mishra-rymbai.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.327260?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jayson Beckman & Munisamy Gopinath & Marinos Tsigas, 2018. "The Impacts of Tax Reform on Agricultural Households," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(5), pages 1391-1406.
    2. R. P. Pradhan, 2007. "Indian Agriculture in the Globalization Era: The Performance and Determinants," Journal of Global Economy, Research Centre for Social Sciences,Mumbai, India, vol. 3(1), pages 3-12, February.
    3. Abhijit Banerjee & Lakshmi Iyer, 2005. "History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India," American Economic Review, American Economic Association, vol. 95(4), pages 1190-1213, September.
    4. R. Ramakumar, 2020. "Agriculture and the Covid-19 Pandemic: An Analysis with Special Reference to India," Journal, Review of Agrarian Studies, vol. 10(1), pages 72-110, January-J.
    5. Nisha Bharti, 2018. "Evolution of agriculture finance in India: a historical perspective," Agricultural Finance Review, Emerald Group Publishing Limited, vol. 78(3), pages 376-392, May.
    6. Kumar, Anjani & Singh, K.M. & Sinha, Shradhajali, 2010. "Institutional Credit to Agriculture Sector in India: Status, Performance and Determinants," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 23(2), July.
    7. Uris Lantz C Baldos & Frederi G Viens & Thomas W Hertel & Keith O Fuglie, 2019. "R&D Spending, Knowledge Capital, and Agricultural Productivity Growth: A Bayesian Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(1), pages 291-310.
    8. Pardey, Philip G & Roseboom, Johannes & Craig, Barbara J, 1992. "A Yardstick for International Comparisons: An Application to National Agricultural Research Expenditures," Economic Development and Cultural Change, University of Chicago Press, vol. 40(2), pages 333-349, January.
    9. T.S. Jayne & Thomas Reardon & Yougesh Khatri & Colin Thirtle, 1994. "Determinants of Productivity Change Using a Profit Function: Smallholder Agriculture in Zimbabwe," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(3), pages 613-618.
    10. Mark W. Rosegrant & Robert E. Evenson, 1992. "Agricultural Productivity and Sources of Growth in South Asia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 757-761.
    11. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
    12. Mozumdar, Lavlu, 2012. "Agricultural productivity and food security in the developing world," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 35(1-2).
    13. Ioannis Skevas & Alfons Oude Lansink, 2020. "Dynamic Inefficiency and Spatial Spillovers in Dutch Dairy Farming," Journal of Agricultural Economics, Wiley Blackwell, vol. 71(3), pages 742-759, September.
    14. C. A. Bayly, 1985. "State and Economy in India over Seven Hundred Years," Economic History Review, Economic History Society, vol. 38(4), pages 583-596, November.
    15. repec:oup:apecpp:v:40:y:2018:i:3:p:421-444. is not listed on IDEAS
    16. Tirthankar Roy, 2002. "Economic History and Modern India: Redefining the Link," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 109-130, Summer.
    17. Utpal Kumar De & Dahun S Dkhar, 2018. "Public Expenditure and Agricultural Production in Meghalaya, India- An Application of Bounds Testing Approach to Co-Integration and Error Correction Model," International Journal of Environmental Sciences & Natural Resources, Juniper Publishers Inc., vol. 8(2), pages 71-78, January.
    18. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    19. Lachaal, Lassaad, 1994. "Subsidies, Endogenous Technical Efficiency And The Measurement Of Productivity Growth," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 26(1), pages 1-12, July.
    20. Ramakumar, R., 2020. "Agriculture and the Covid-19 Pandemic: An Analysis with Special Reference to India," Review of Agrarian Studies, Foundation for Agrarian Studies, vol. 10(1), July.
    21. Lachaal, Lassaad, 1994. "Subsidies, Endogenous Technical Efficiency and the Measurement of Productivity Growth," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(1), pages 299-310, July.
    22. Tyrychtr, Jan & Vasilenko, Alexandr, 2015. "Transformation Econometric Model to Multidimensional Databases to Support the Analytical Systems in Agriculture," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(3), pages 1-7, September.
    23. Wiens, Thomas B, 1983. "Price Adjustment, the Responsibility System, and Agricultural Productivity," American Economic Review, American Economic Association, vol. 73(2), pages 319-324, May.
    24. Ghose, Ajit Kumar, 1982. "Food Supply and Starvation: A Study of Famines with Reference to the Indian Sub-Continent," Oxford Economic Papers, Oxford University Press, vol. 34(2), pages 368-389, July.
    25. Chavas, Jean-Paul & Aliber, Michael, 1993. "An Analysis Of Economic Efficiency In Agriculture: A Nonparametric Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(1), pages 1-16, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mozumdar, Lavlu, 2012. "Agricultural productivity and food security in the developing world," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 35(1-2).
    2. Edet Joshua Udoh & Sunday Brownson Akpan, 2019. "Macroeconomic variables affecting fish production in Nigeria," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 9(2), pages 216-230, December.
    3. Fernando M. Aragon, 2014. "Do better property rights improve local income?: Evidence from First Nations' treaties," Discussion Papers dp14-02, Department of Economics, Simon Fraser University.
    4. Khalil Ahmad & Amjad Ali, 2016. "Rising Population and Food Insecurity Linkages in Pakistan: Testing Malthusian Population Growth Theory," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 4(1), pages 1-8, January.
    5. Laure Latruffe & Yann Desjeux, 2016. "Common Agricultural Policy support, technical efficiencyand productivity change in French agriculture," Review of Agricultural, Food and Environmental Studies, INRA Department of Economics, vol. 97(1), pages 15-28.
    6. Hertel, By Thomas W. & Baldos, Uris L.C. & Fuglie, Keith O., 2020. "Trade in technology: A potential solution to the food security challenges of the 21st century," European Economic Review, Elsevier, vol. 127(C).
    7. Laure Latruffe & Boris E. Bravo-Ureta & Alain Carpentier & Yann Desjeux & Víctor H. Moreira, 2017. "Subsidies and Technical Efficiency in Agriculture: Evidence from European Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 783-799.
    8. Huang, Qiuqiong & Rozelle, Scott & Lohmar, Bryan & Huang, Jikun & Wang, Jinxia, 2006. "Irrigation, agricultural performance and poverty reduction in China," Food Policy, Elsevier, vol. 31(1), pages 30-52, February.
    9. Laure Latruffe & Boris E. Bravo-Ureta & Alain Carpentier & Yann Desjeux & Víctor H. Moreira, 2017. "Subsidies and Technical Efficiency in Agriculture: Evidence from European Dairy Farms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(3), pages 783-799.
    10. Rishabh Kumar, 2020. "Top Indian wealth shares and inheritances 1966–1985," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(3), pages 551-580, September.
    11. Kundu, Amit & DAS, SANGITA, 2021. "Accessibility of Institutional Credit among the Agricultural Labour Households and its Impact on their Livelihood," MPRA Paper 112791, University Library of Munich, Germany, revised 03 Mar 2022.
    12. Mitchell, Matt & Farren, Michael & Gonzalez, Olivia & Horpedahl, Jeremy, 2019. "The Economics of a Targeted Economic Development Subsidy," Annals of Computational Economics, George Mason University, Mercatus Center, November.
    13. Latruffe, Laure & Bravo-Ureta, Boris E. & Moreira, Victor H. & Desjeux, Yann & Dupraz, Pierre, 2011. "Productivity and Subsidies in European Union Countries: An Analysis for Dairy Farms Using Input Distance Frontiers," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114396, European Association of Agricultural Economists.
    14. Lien, Gudbrand D. & Kumbhakar, Subal C. & Hardaker, J. Brian, 2008. "Determinants Of Part-Time Farming And Its Effect On Farm Productivity And Efficiency," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6701, European Association of Agricultural Economists.
    15. Bishnupriya Gupta, 2019. "Falling behind and catching up: India's transition from a colonial economy," Economic History Review, Economic History Society, vol. 72(3), pages 803-827, August.
    16. Xu, Yingfeng, 1999. "Agricultural productivity in China," China Economic Review, Elsevier, vol. 10(2), pages 108-121.
    17. Moreira, Victor H. & Bravo-Ureta, Boris E. & Dunner, Roberto & Vidal, Ricardo, 2012. "Total Factor Productivity Change in Dairy Production in Southern Chile: Is Farm Size Significant?," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126895, International Association of Agricultural Economists.
    18. Xiaohua Yu & Guoqing Zhao, 2009. "Chinese agricultural development in 30 years: A literature review," Frontiers of Economics in China, Springer;Higher Education Press, vol. 4(4), pages 633-648, December.
    19. Deininger, Klaus & Jin, Songqing, 2009. "Securing property rights in transition: Lessons from implementation of China's rural land contracting law," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 22-38, May.
    20. Lachaal, Lassaad, 1998. "Production Structure Characteristics and Adaptations of Productivity Growth Measures : A Survey," Cahiers d'Economie et de Sociologie Rurales (CESR), Institut National de la Recherche Agronomique (INRA), vol. 48.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aolpei:327260. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/fevszcz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.