Cotton in India: Analysis of Differing Performance

This paper attempts to investigate the performance of Indian cotton sector and impact of economic and biological factors on acreage and yield of cotton in the major cotton growing states of the country using time series secondary data. The results indicate that the cotton production in the country increased significantly (2.37% per annum) between 1951-52 and 1995-96, largely as a result of improved productivity. This increase in productivity can be largely attributed to the technologies embodied in improved cotton varieties, efficient irrigation and cultivation, fertilisers and novel pest management. This growth has been accompanied by an increase in variability of production and the increase in yield variability was important source of generating instability in cotton production. Central region comprising Gujarat, Madhya Pradesh and Maharashtra was the major cotton producing zone accounting for about 51 per cent of the total production in 1971-75. However, major changes are occurring in the distribution of cotton growing and the main expansion in acreage and production is in North while the traditional cotton producing region (central zone) is tending to cutback on cotton planting. Research findings also indicate that the use of cotton textiles in the country has been steadily rising but the per capital availability and share of cotton use in total fibre use has been declining moderately. Results of cotton share equations revealed that cotton consumption in the country was not much responsive to the prices but the lagged consumption of cotton captured the strong trend in consumption which indicated that decline in share of cotton was not price related but due to technological improvements in the manufactured fibres industry. Per capital GDP was found to have a significant and positive impact on the per capita total fiber and cotton use and the income elasticity was 0.22 for total fibre use and 0.48 for cotton. Results from the acreage response models reveal that the relative prices of cotton vis-à-vis competing crops play a much greater role in determining the growers’ acreage allocations. Favourable weather and irrigation in the cotton yield equations was influenced the cotton acreage. The expected role of fertiliser and irrigation in the cotton yield equations was found in most of the states, indicating a crucial role of these factors in determining the yield. Therefore, if cotton production is to be promoted on sustainable basis, the farmers will have to be assured of not only remunerative and stable prices but also yields.