Changing Sources of Growth in Indian Agriculture: Implications for Regional Priorities for Accelerating Agricultural Growth

56 Pages Posted: 27 Mar 2014

See all articles by Pratap Birthal

Pratap Birthal

National Centre for Agricultural Economics and Policy Research (NCAP)

P. K. Joshi

International Food Policy Research Institute (IFPRI)

Digvijay Negi

Indian Statistical Institute, New Delhi

Shaily Agarwal

National Centre for Agricultural Economics and Policy Research (NCAP)

Date Written: February 2014

Abstract

Indian agriculture was transforming from a cereal-based production system toward high-value crops (HVC) during the 1990s. However, food security concerns resurfaced during the first decade of the 21st century, and the policy environment tilted in favor of cereal-based production systems, especially rice and wheat. This paper revisits an earlier study to evaluate how the policy shift influences the patterns and the sources of agricultural growth in India and assesses their implications for regional priorities for higher, more sustainable, and more inclusive agricultural growth. The study found that technology has remained the most important source of agricultural growth due to policy emphasis on cereal-based food security. Nevertheless, agricultural diversification toward HVCs, driven by a sustained rise in per capita income and urbanization, among other factors, emerged as the next most important source of agricultural growth. The growth in high-value agriculture has come largely from area reallocation from less profitable coarse cereals, mainly millets and sorghum. The contributions of area expansion and commodity prices to agricultural growth have been erratic and small, suggesting that these cannot be sustainable sources of agricultural growth.

The sources of agricultural growth, however, have varied widely across the regions; while the irrigated northern region followed a technology-led growth trajectory, the rainfed western and southern regions followed diversification toward HVCs as the main strategy to enhance and sustain agricultural growth. Agricultural diversification toward HVCs was found to exhibit a pro-poor bias and thus can serve as an important pathway for smallholders to move out of poverty.

In the long run, growth in agriculture must come from technological change and diversification toward HVCs. To sustain agricultural growth, investment in agricultural research must be increased, and the agricultural research agenda must be revisited in view of the emerging challenges and market opportunities in agriculture and the agrifood industry. Promoting high-value agriculture will require enabling policies, institutions, and infrastructure that facilitate farmers’ access to remunerative markets.

Keywords: India, South Asia, Asia, agricultural growth, agricultural policies, smallholders, high value agricultural products, high value agriculture

Suggested Citation

Birthal, Pratap and Joshi, Pramod Kumar and Negi, Digvijay and Agarwal, Shaily, Changing Sources of Growth in Indian Agriculture: Implications for Regional Priorities for Accelerating Agricultural Growth (February 2014). IFPRI Discussion Paper 01325. Available at SSRN: https://ssrn.com/abstract=2405698 or http://dx.doi.org/10.2139/ssrn.2405698

Pratap Birthal (Contact Author)

National Centre for Agricultural Economics and Policy Research (NCAP) ( email )

Library Avenue, Pusa, P.B. No. 11305
New Delhi 110012
United States

HOME PAGE: http://www.ncap.res.in

Pramod Kumar Joshi

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Digvijay Negi

Indian Statistical Institute, New Delhi ( email )

7 S. J. S. Sansanwal Marg
New Delhi, 110016
India

HOME PAGE: http://www.isid.ac.in

Shaily Agarwal

National Centre for Agricultural Economics and Policy Research (NCAP) ( email )

Library Avenue, Pusa, P.B. No. 11305
New Delhi 110012
United States

HOME PAGE: http://www.ncap.res.in

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