Regional Variation and Cereal Production in India

Abstract

This paper analyzes the agricultural scenario in India by estimating a system of production functions for five major cereal crops (such as wheat, rice, maize, bajra and jowar), using a Translog specification instead of the more commonly used Cobb-Douglas (CD) specification. Our estimation methodology employs a Seemingly Unrelated Regressions in a panel data set up, which allows for cross equation correlation. We use district level data for 13 major states from 1966-1967 to 1994-1995. We examine the inter-regional heterogeneity using four kinds of dummy variables, viz. District dummy, state dummy, production function dummy and agro-ecological dummy. The result indicates presence of non-linear effects of various inputs on the yields. Our results show the significance of regional differences in terms of production system and agro-ecological climates.

Keywords: Production function, Indian agriculture, translog function

JEL Classification: C33, D24, Q10