Pattern and Consequences of Intensive Agricultural Growth in Punjab

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Pattern and Consequences of Intensive
Agricultural Growth in Punjab

• R.S. Sidhu

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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.
• What is the pattern of growth?
• What are the determinants?
• What are the constraints to future growth?
• What are the policy options to accelerate growth?

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Gross value of crop output at 2001-02 prices (Rs.
crore)
  Rice Wheat Cotton Oilseeds Pulses Sugarcane Other cereals Aggregate
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
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Source Singh and Sidhu, 2004
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Agricultural Growth 1967-81 5.64 1981-91 5.16
1991-2001 0.83
Source Singh and Sidhu, 2004
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Year Area under HYV Area under HYV Fert.Use Fert.Use Irrigated area () Tube-wells (In 000) Tractors Tractors Cropping Intensity ()
Year Rice (000ha) Wheat (000ha) Total (000 Nutrient tons) Per Ha NSA (nutrient kgs) Irrigated area () Tube-wells (In 000) Total (In Thousands) No./000 ha Cropping Intensity ()
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
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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
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Role of Agricultural Technology Development
Crop No of Research Scientists Varieties Developed
Wheat 72 43
Rice 62 25
Cotton 35 25
Scane 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
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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
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Role of Price Policy

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

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Role of Price Policy in Profitability
MSP Increase 9.52
MSP Increase 14.88
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Role of Price Policy in Profitability
MSP Increase 7.31
MSP Increase 17.11
MSP Increase 7.31
MSP Increase 17.11
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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
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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

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Deceleration/Stagnation in Productivity Growth
Crop Actual 1999-02 (q/ha) Highest As of Potential As of Potential CGR of Yield 1979/80 to 1989/90 CGR of Yield (1989/90 to 2001/02
Crop Actual 1999-02 (q/ha) Highest Actual Highest CGR of Yield 1979/80 to 1989/90 CGR of Yield (1989/90 to 2001/02
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
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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
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Trends in machinery cost for wheat and paddy in
Punjab (In Rs/ha)
Year Wheat Wheat Paddy 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) change (simple) change (simple) change (simple) change (simple)
1991-94 over 1981-84 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
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Compound growth rates of production for wheat and
rice (In per cent per annum)
State Wheat Wheat Wheat Rice Rice Rice
State 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
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Increase in proportionate area of the central
zone under water table depth of more than 10 meter
In per cent
Year Central zone Central zone South west zone South west zone
5-10 mt gt10 mt 5-10 mt gt10 mt
1996 69 25 47 8
1998 49 42 43 12
2000 41 53 50 9
2004 10 90 52 10
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Ground Water Status in Punjab
Rate of Exploitation () Blocks (in per cent of total) Blocks (in per cent of total) Blocks (in per cent of total) Blocks (in per cent of total)
Rate of Exploitation () 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
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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 ?

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N, P, K Status of Punjab Soils, 1981 through
2002(In per cent samples deficient)
Nutrient availability Low Low Medium Medium High 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
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Average water table depth in some central
districts (in meters)
District Measured Measured Predicted 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
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Average water table depth (m) in different zones
Zones Measured Measured Predicted 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
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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

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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

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Thank You
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Decomposition of Agricultural Growth in
Punjab Average annual Growth rates ()
Period Agri. Growth Area effect Land productivity effects Land productivity effects Land productivity effects Land productivity effects
  Agri. Growth Area effect Land productivity effects Land productivity effects Land productivity effects Land productivity effects
Indian Punjab Agri. Growth Area effect Overall Aggregate crop yield effect Inter-crop shift effect (static) Inter-crop shift effect (Dynamic)
  Agri. Growth Area effect Overall Aggregate crop yield effect
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
contribution 100 37.54
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
contribution 100 28.29 -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 100 59.04
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Contribution of different crops to land
productivity (yieldcrop 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
Gnut -0.9
RM -1.4
S'cane -0.9
Am. Cotton 0.3
Desi Cotton -0.2
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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 Percentage of Research budget to Percentage of Research budget to Percentage of Research budget to Percentage of Research budget to Percentage of Research budget to Percentage of Research budget to Percentage of Research budget to
Year Research Budget (Rs. Million) Wheat rice Cotton and Scane 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
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N, P, K Status of Punjab Soils(in per cent
blocks)