Pattern and Trend in Labour Use in Indian Agriculture: An Analysis across Major Crops and States

Abstract

The technological change in agriculture has made significant impacts on labour absorption, notably since green revolution. In this context the present study analyses the pattern and trend in labour absorption across major states and crops during the period of mid-1970s to 2010. The entire period of analysis has been sub-divided into two, upto mid-90s as first period and post-mid 90s till 2010 as the second period, broadly corresponding to the period of green revolution and market reforms, respectively. The analysis was carried out for rice and wheat, two major food crops and cotton and sugarcane, two major commercial crops. The results indicated that at national level, there is wide variation in the trend in labour absorption among the four crops under study: while a continuous decline has been observed in the case of wheat during the entire period, it has been continuously rising in the case of cotton. On the other hand, paddy and sugarcane depicted varying trends over the time- increasing labour absorption up to mid-1990s, but declining thereafter. This trend at national level corresponds to the spread of technological changes in agriculture.

There was wide variation in the composition of human labour and machine labour use. The share of human labour in total cost of cultivation registered significant increase between TE 1975-76 and TE 1995-96 in most cases and a mixed picture emerged thereafter. Among the states, the highest share of human labour in total cost of cultivation of paddy was observed in Assam and West Bengal at about 42% each, whereas it was the lowest in Punjab at about 18 per cent. The penetration of mechanization in cultivation is the lowest in case of sugarcane and the highest for wheat. During the first phase, labour productivity increased along with increase in labour absorption in most cases. In the latter period, i.e. after mid-1990s, per hectare labour use declined in majority of the cases, while there was increase in per hectare labour use in a few cases like paddy in West Bengal, and cotton in Gujarat and Punjab. Increase in labour productivity during the last 15 years has been much higher than the decline in use of labour per unit of area. The net impact of this is increase in labour earning in crop production in all the crops and everywhere.

The employment elasticity with respect to yield has remained positive for paddy, cotton and sugarcane in the first phase in all states except Punjab. In the second phase, growth in crop productivity was associated with reduced use of labour in most cases with rapid decline in labour use in some cases like in Punjab and Andhra Pradesh. In the context of declining yield for many crops and regions, the study calls for developing non-farm employment avenues along with deepening of technical change. This would cushion the negative implication of labour displacement, while increasing the labour productivity in agriculture.

Keywords: Labour use, labour productivity, factor share, employment elasticity, agriculture, green revolution