Sources of Output Growth in Indian Agriculture during the Post-Reform Period
AbstractEconomic growth has failed to be sufficiently inclusive, particularly after the mid-nineties. Although agriculture is still a single major sector providing livelihood to more than 60 percent of the population, it has lost its growth momentum and the share has been declining continuously for a variety of reasons like low income due to inadequate output growth, low productivity, lack of credit at reasonable rates, natural calamities and unavailability of proper extension services. Realizing the importance of this sector and its current crisis, the Eleventh Plan aims to reverse this trend. Output growth could be possible by increasing input growth, technical progress and improvement in technical efficiency. In order to identify the source of the problem, this paper attempts to decompose the agricultural output growth obtained in 15 major states for the period 1994-95 to 2003-04 into the above three components using the random coefficients frontier production function model. Results of the study indicate that the efficiency has declined over time for all the states and the average technical efficiency is only 72 percent. This means that there is a potential to increase the existing output by 28 percent without increasing inputs.We found that inmost of the states, growth was only due to higher inputs. Investment in extension services along with sustained investment in agricultural research and development, and infrastructure is the need of the hour. West Bengal is the most efficient state in applying labor and fertilizer inputs and also has a very high over all efficiency. This can be linked to the successful land reform policies of the state.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Development Economics Working Papers with number 22515.
Date of creation: Jan 2008
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economic growth; technical efficiency; Eleventh Plan; frontier production function; land reform;
Find related papers by JEL classification:
- Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
- Saikia, Dilip, 2009. "Total Factor Productivity in Indian Agriculture: Some Conceptual and Methodological Issues," MPRA Paper 28578, University Library of Munich, Germany, revised Apr 2010.
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