Propellers of Agricultural Productivity in India

India’s decelerating wheat- and rice-yield growth rates have led to questions of whether India’s agricultural sector will be able to meet future food demands. To explore this issue, ERS researchers measure sector-level agricultural total factor productivity (TFP) growth and evaluate how public policies affected TFP from 1980 to 2008. During this period, substantial regional differences in TFP growth emerged: the Indian West and South achieved faster TFP growth than the rest of the country, largely due to rapid growth in horticulture and animal products. Of the policies hypothesized to stimulate TFP, India’s public agricultural research and higher education programs had the greatest effect on TFP growth, followed by public investments in irrigation infrastructure. These effects propelled TFP in Northern and Western India more than in the rest of the country. Groundwater irrigation from wells accelerated TFP more than surface-water irrigation from canals. Other drivers of TFP growth included research investments of international institutions and an emerging private sector. Public investment in rural education has had mixed effects, depending on education levels. These findings support an optimistic view that Indian agriculture will be able to meet the broadening spectrum of future food demands. Critical to that optimism, though, is continued innovation from public and private research systems, especially in seed development, and from irrigation and high-value-commodity production technologies.