Agricultural productivity growth in India: An analysis accounting for different land types

Agricultural endeavour in India has moved from being a traditional farming practice to a more modern and mechanized enterprise. One of the important prerequisite for raising agricultural production and mitigating supply constraints is enhancing agricultural productivity. Since traditional input resources are limited, an increase in agricultural production has to come from enhancing agricultural productivity. With the onset of Green Revolution in India, the contribution of modern technology towards raising agricultural production has been immense. Total Factor Productivity (TFP) growth in agriculture assesses the contribution of knowledge and efficiency towards raising agricultural production. For a comprehensive study of growth of the agriculture sector, TFP analyses should include the allied sectors like livestock, forestry and fishing as well. However, in estimating agricultural TFP growth, it is essential to account for the type of land being used for crop production. An addition of an acre of irrigated land will be much more productive than an addition of rainfed land. Similarly, an acre of rainfed land will yield more crop than an acre of pastureland, which is usually used for grazing purpose for livestock. Access to irrigated land protects farmers from the risks and uncertainties of vagaries of weather. In this study we derive weights for rainfed cropland, irrigated cropland and pastureland based on their relative productivity. Using the traditional Solow index method and accounting for different land type viz. rainfed land, irrigated land and pasture land, we measure TFP growth of the agriculture and allied sector in India from 1981 to 2008. Our results show that agricultural TFP growth in India for this period ranged between 1% during 1981-1990 to about 1.7% during 2000-2008. Growth in TFP was higher during the post reform period than during the pre reform period. We also find that usage in agricultural inputs has declined during the post reform period compared to the pre reform period. Our findings also show that, though contribution of TFP towards output growth was declining during the initial years, it however shows a rising trend towards explaining output growth during the last decade.