Pattern and Consequences Pattern and Consequences of Intensive Agricultural of Intensive Agricultural

Growth in PunjabGrowth in Punjab

Pattern and Consequences Pattern and Consequences of Intensive Agricultural of Intensive Agricultural

Growth in PunjabGrowth in Punjab

R.S. SidhuR.S. Sidhu

Issues• Agriculture growth in Punjab is ‘most often

cited’ success story. It has been made possible by new technology, development of infrastructure and institutional support. But recently the growth has shown signs of deceleration. This paper therefore deals with the following issues.

1. What is the pattern of growth?2. What are the determinants?3. What are the constraints to future growth?4. What are the policy options to accelerate

growth?

Fig. 1: Crop Value Output of Punjab (at 2001 prices)

y = -10.126x2

+ 769.43x + 11154

R2

= 0.9157

y = -7.1863x2

+ 640.76x + 4409.7

R2

= 0.9565

0

5000

10000

15000

20000

25000

30000

1967-681970-711971-721972-731973-741974-751975-761976-771977-781978-791979-801980-811981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-991999-002000-012001-02

Per cropped hectare (Rs)

Total value output (Rs crores)

3.70%

3.70%

0.34%

5.94%

5.16%

0.83%

Gross value of crop output at 2001-02 prices (Rs. crore)

  Rice Wheat CottonOilseed

s PulsesSugarc

aneOther

cerealsAggreg

ate

1967-68 2394 21036 10203 4571 7637 432 5872 52145

% 4.59 40.34 19.57 8.77 14.65 0.83 11.26 100

1980-81

18757 48365 17490 2677 6675 353 4111 98428

% 19.06 49.14 17.77 2.72 6.78 0.36 4.18 100

1990-91

37735 76602 29062 1150 7872 540 2272 155232

% 24.31 49.35 18.72 0.74 5.07 0.35 1.46 100

2001-02

51133 98217 19569 930 2006 838 2696 175389

% 29.15 56.00 11.16 0.53 1.14 0.48 1.54 100

CGR (%) 8.56 4.10 1.35 -4.58 -1.35 1.38 -3.17 3.53

Source: Singh and Sidhu, 2004

Share of different crops in GV of crop output

0102030405060

1967-68 1980-81 1990-91 2001-02

Year

Per

cen

t sh

are

Rice Wheat Cotton Oilseeds Pulses Sugarcane Other cereals

Source: Singh and Sidhu, 2004

Decomposition of Agricultural Growth in Punjab

0

20

40

60

80

1967-1981 1981-1991 1991-2001

Year

Per c

ent

Con

trib

utio

n

Area Effect Aggregate crop yield effect

Inter crop shift effect (static) Inter crop shift effect (dynamic)

Agricultural Growth:1967-81 5.64%1981-91 5.16%1991-2001 0.83%

Source: Singh and Sidhu, 2004

Year Area under HYV

Fert.Use Irrigated area (%)

Tube-wells(In

’000)

Tractors Cropping

Intensity

(%)Rice(000ha)

Wheat(000ha)

Total(000

Nutrient tons)

Per Ha NSA(nutrient kgs)

Total(In Thousands)

No./000 ha

70-71 130 1589 213 50 71 192 5.3 1.3 140

80-81 1095 2757 762 180 81 600 119 28.4 161

90-91 1906 3271 1220 290 93 800 289 68.5 178

02-03 2530 3375 1441 340 95 1150 451 106.8 185

Average use of inputs for wheat and rice in Punjab (Per ha)

Year/Crop Fertilizer use (kg of nutrients)

Chemical Use (Rs. at 1980-81

prices)

Machine Use (Rs. at 1980-81 prices)

Wheat

1981-84 156.70 57.31 495.34

1998-2000 224.00 202.27 680.11

Paddy

1981-84 180.50 113.69 379.55

1998-2000 182.80 267.75 629.06

Role of Agricultural Technology Development

Crop No of Research Scientists

Varieties Developed

Wheat 72 43

Rice 62 25

Cotton 35 25

S’cane 18 18

Other cereals 24 40

Oilseeds 41 42

Pulses 45 43

Fodder 8 36

Fruits 17 124

Vegetables 21 69

Livestock 73 na

Total 416

Note: Fruits include 21 fruit crops and vegetables 25 vegetables

Role of Technology Development: Growth and Variability in

Productivity

Crop CGR 1965/66 to 2001-02 CV of de-trended yield 1970-71 to 2001-02

Paddy 2.72 9.08

Cotton 0.27 25.74

Sugarcane 1.66 15.65

Maize 1.39 13.33

Wheat 2.76 4.88

Gram 0.25 19.57

Rapeseed 2.57 13.15

Role of Price Policy

Two issues are important• Movement in the relative prices • Variability in prices

Index of relative farm harvest proices of different crops in Punjab

020406080

100120140

Ind

ex V

alu

e1970-71 2001-02

Coefficient of Variation of Prices

0

5

10

15

20

25

30

Per c

en

t

Index of Income and Yield for Paddy

0.0

50.0

100.0

150.0

200.0

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

Ind

ex (

%)

Yield Income/TC Income/GR

MSP Increase: 9.52% MSP Increase: 14.88%

Role of Price Policy in Profitability

MSP Increase: 7.31% MSP Increase: 17.11%

Role of Price Policy in Profitability

Index of Income and Yield for Wheat

0.0

50.0

100.0

150.0

200.0

250.0

300.0

1981-82

1982-83

1983-84

1984-85

1985-86

1986-87

1987-88

1988-89

1989-90

1990-91

1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

Ind

ex (

%)

Yield Income/TC Income/GR

MSP Increase: 7.31% MSP Increase: 17.11%

Realisation of cost and level of subsidy on power supply to

agriculture 1991-92

1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

ACR(%)

10.44 9.39 13.81 22.27 23.83 16.34 0 0 0

Subsidy Rs. million

4664.2 6448.4 7706.5 7201.6 7226.2 9250.4 14701.9 16903.9 20161.8

Constraints to Growth

• Technology fatigue• Agrarian structure• Rise in fixed costs• Minimum support prices versus

International prices• Lack in value addition• Depleting groundwater resources• Declining fertility status of soils

Deceleration/Stagnation in Productivity Growth

Crop Actual1999-02(q/ha)

Highest As % of Potential CGR of Yield

1979/80 to 1989/90

CGR of Yield (1989/90 to 2001/02Actual Highest

Wheat 45.42 46.96 81.73 84.50 2.89s 2.02s

Rice 34.66 35.79 75.86 78.33 1.74s 0.09ns

Cotton (lint)

3.85 6.36 50.59 83.60 7.0s (-) 5.80s

Maize 26.97 27.93 60.66 62.10 (-) 0.99 3.26s

Rapeseed and Mustard

11.75 12.62 64.28 69.04 4.96s 1.38ns

Sugarcane

(in gur)

64.01 65.29 76.22 77.74 0.64 0.13

Land –man ratio in the farming sector of Punjab

Year NSA/agril. worker (ha)

GCA/agril. worker (ha)

1961 1.93 2.44

1977 1.65 2.32

1981 1.46 2.36

1991 1.25 2.22

2001 1.19 2.20

Trends in machinery cost for wheat and paddy in Punjab (In

Rs/ha)Year Wheat Paddy

Machine cost at 1980/81p

Labour use (man-days/ha)

Machine cost at 1980/81p

Labour use (man-days/ha)

1981-84 495.34 49.44 379.55 103.60

1985-88 569.28 52.35 432.47 102.35

1991-94 540.19 43.89 546.66 70.60

1995-98 534.07 42.24 579.08 59.21

1998-2000 680.11 38.88 629.06 56.32

% change (simple)

1991-94 over1981-84

9.05 -11.22 44.03 -31.85

1998-2000 over 1991-94

25.90 -11.41 15.07 -20.22

1998-2000 over 1981-84 (%/annum)

1.87 -1.06 3.29 -2.28

Wheat:MSP and International prices

(Rs/t)

0

1000

2000

3000

4000

5000

6000

7000

1981-

82

82-

83

83-

84

84-

85

85-

86

86-

87

87-

88

88-

89

89-

90

90-

91

91-

92

92-

93

93-

94

94-

95

95-

96

96-

97

97-

98

98-

99

99-

00

20

00-

01

20

01-

02

20

02-

03

20

03-

04

MSP

International

Rice:Miller price and International price (Rs/t)

02000400060008000

100001200014000

Miller price

International price

Compound growth rates of production for wheat and rice (In per cent per annum)

State Wheat Rice

1971-72 to 1981-82

1981-82 to 1991-92

1991-92 to 2000-01

1971-72 to 1981-82

1981-82 to 1991-92

1991-92 to 2000-02

Punjab 5.23 3.57 2.53 16.91 5.48 2.86

Haryana 6.55 5.48 4.20 12.06 3.46 4.80

Madhya Pradesh 1.74 3.55 5.86 - - -

Bihar -0.91 4.36 3.00 -0.06 3.79 6.18

Rajasthan 5.34 2.81 4.96 - - -

West Bengal -4.44 -0.74 6.13 - - -

Karnataka 2.18 -5.16 4.46 1.87 1.55 2.72

Maharashtra 10.32 -1.86 4.79 - - -

Tamil Nadu - - - 0.18 3.07 2.00

Increase in proportionate area of the central zone under water table depth of

more than 10 meter

Year Central zone South west zone

5-10 mt >10 mt 5-10 mt >10 mt

1996 69 25 47 8

1998 49 42 43 12

2000 41 53 50 9

2004 10 90 52 10

In per cent

Ground Water Status in Punjab

Rate of Exploitation (%)

Blocks (in per cent of total)

Sub-Mountainous

Central (Paddy zone)

South West(Cotton zone)

Punjab

Below 100 78 17 76 47

100-200 22 63 12 41

200-300 0 15 6 9

300-400 0 3 3 2

Above 400 0 2 3 1

Total Blocks 36 69 33 138

Rise/ fall in Water table

Sangrur (Barnala) 43

Patiala 33 Jalandhar 22

Amritsar 18

Kapurthala 17 Faridkot 13 Ludhiana 13 Ropar 08 Hoshiarpur-1 02 Gurdaspur 02 Hoshiarpur-2 05 Mansa 09

Ferozpur 17

Bathinda 21

N, P, K Status of Punjab Soils, 1981 through 2002

(In per cent samples deficient)

Nutrient availability

Low Medium High

1981-90 1991-2002

1981-90 1991-2002

1981-90 1991-2002

N (OC) 78 66 22 32 0 2

P 48 62 29 23 23 15

K 8 9 45 51 46 40

Average water table depth in some central districts (in

meters)

District Measured Predicted

1993 2003 2013 2023

Sangrur

13.8 20.6 27.5 34.3

Patiala 11.7 18.4 25.2 32.0

Moga 9.4 18.6 27.8 37.0

Average water table depth (m) in different zones

Zones Measured Predicted

1993 2003 2013 2023

Sub-montane

17.6 18.5 19.4 20.3

Central 11.1 16.2 21.3 26.5

South-west

6.8 8.9 10.9 13.3

Lack of Value Addition

• Only Primary processing for rice and wheat in the state

• Less than 2% of fruits and vegetables are processed due to-lack of vertical integration of the market-higher marketing charges-less developed marketing infrastructure to handle the perishables-damand issue

• About 26% of the milk production is processed in the organised sector

Policy Options• Promoting high value enterprises like

dairying, fruits and vegetables, poultry, etc.

• Promoting value addition and processing

• Vertical integration of the market• Rationalisation of the taxes and other

charges• Rational input and output pricing

policies• Improving water use efficiency

Thank You

Decomposition of Agricultural Growth in Punjab

Average annual Growth rates (%)

Period Agri. Growth

Area effect

Land productivity effects

 

Indian Punjab

Overall Aggregate crop yield effect

Inter-crop shift effect (static)

Inter-crop shift effect (Dynamic)

 

1967-1981 5.94 2.23 3.71 2.43 0.25 1.03

% contribution

100 37.54 62.46 40.91 4.21 17.34

1981-1991 5.16 1.46 3.7 2.71 0.81 0.18

% contribution

100 28.29 71.71 52.52 15.7 3.49

-100 -73.21 -21.82 -4.98

1991-2001 0.83 0.49 0.34 0.26 0.07 0.01

% contribution

100 59.04 40.96 31.33 8.43 1.2

Contribution of different crops to land productivity (yield+crop shift effects) growth (%)

Crop 2001-02 over 1970-71

Rice 66

Bajra -1.1

Maize -7.3

Wheat 52.9

Barley -4.4

Gram -2.8

G’nut -0.9

R&M -1.4

S'cane -0.9

Am. Cotton 0.3

Desi Cotton -0.2

Share of different crops/enterprises and other

activities in the research budget of the University

Year Research Budget (Rs. Million)

Percentage of Research budget to

Wheat & rice

Cotton and S’cane

Other field crops

Horticultre

Livestock and fishery

Post harvesting

Marketing

Others

1980 41.5 16 15 12 12 16 5 1.2 23

1990 144.1 18 12 18 13 11 3 0.5 24

2000 547.1 19 10 12 12 12 4 0.7 30

2001 608.5 20 9 11 11 11 5 0.7 31

Source: The World Bank, 2003

N, P, K Status of Punjab Soils(in per cent blocks)

Low

0

20

40

60

80

100

N (OC) P K

Low 1981-90 Low 1991-2002

Medium

0

10

20

30

40

50

60

N (OC) P K

Medium 1981-90 Medium 1991-2002

High

0

10

20

30

40

50

N (OC) P K

High 1981-90 High 1991-2002