Changing Contours of Indian Agriculture: Investment, Income and Non-farm Employment

244 Pages·2017·3.41 MB·English

by  Seema Bathla

Seema Bathla
Editors
Amaresh Dubey
Changing
Contours
of Indian
Agriculture
Investment, Income and Non-farm
Employment
Changing Contours of Indian Agriculture
Seema Bathla Amaresh Dubey
(cid:129)
Editors
Changing Contours of Indian
Agriculture
Investment, Income and Non-farm
Employment
123
Editors
SeemaBathla Amaresh Dubey
Centrefor the Studyof Regional Centrefor the Studyof Regional
Development Development
Jawaharlal Nehru University Jawaharlal Nehru University
NewDelhi NewDelhi
India India
ISBN978-981-10-6013-7 ISBN978-981-10-6014-4 (eBook)
DOI 10.1007/978-981-10-6014-4
LibraryofCongressControlNumber:2017949136
©SpringerNatureSingaporePteLtd.2017
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Contents
1 Introduction... .... .... ..... .... .... .... .... .... ..... .... 1
Seema Bathla and Amaresh Dubey
2 Public Investment in Agriculture and Growth: An Analysis
of Relationship in the Indian Context ... .... .... .... ..... .... 13
Seema Bathla
3 Dynamics of Access to Rural Credit in India: Patterns,
Determinants and Implications. .... .... .... .... .... ..... .... 29
Anjani Kumar
4 Investment Behaviour of Farmers Across Indian States:
Determinants and Impact on Agriculture Income.. .... ..... .... 51
Seema Bathla and Yashi Kumari
5 Supply Response Function in Indian Agriculture.. .... ..... .... 75
Parmod Kumar
6 Analysis of Rice Productivity and Sources of Growth in India ........ 97
Elumalai Kannan
7 Changes in Production Structure and Class Composition
in Agriculture: An Analysis of Agrarian Question Based
on Punjab Experience... ..... .... .... .... .... .... ..... .... 117
Balwinder Singh Tiwana and Paramjit Singh
8 Disparities in Agriculture Income Across the Indian States... .... 137
Prabhjot Kaur and Sharanjit Singh Dhillon
9 Income Mobility and Poverty Dynamics Across Social Groups
in Rural India, 1993–2005 .... .... .... .... .... .... ..... .... 153
Amaresh Dubey and Arjan Verschoor
v
vi Contents
10 Is Occupational Transformation in India Pro-Poor? Analysis
of Rural Labour Market in the Reform Period ... .... ..... .... 167
Amaresh Dubey and Shivakar Tiwari
11 Shortages in Agriculture Labour Market and Changes
in Cropping Pattern .... ..... .... .... .... .... .... ..... .... 185
Sarda Prasad
12 DeterminantsofRuralNonfarmEmploymentandItsImplication
for Rural Income Distribution: A Case Study of Assam ..... .... 209
Anamika Das
13 Changes in Work Patterns of Rural Women in the Context
of Structural Transformation in India... .... .... .... ..... .... 227
Nancy Sebastian
About the Editors
Seema Bathla is a professor at the Centre for the Study of Regional Development
(CSRD),JawaharlalNehruUniversity(JNU),NewDelhi,India.BeforejoiningJNU,
sheworkedattheInstituteofEconomicGrowth,TheEnergyResearchInstituteand
University of Delhi, India. She obtained her M.Phil. from the Delhi School of
EconomicsandPh.D.fromJNU.Shehas25yearsofworkexperienceandpublished
threebooks(twoco-authored)andmorethan40researcharticlesinrefereednational
and international journals and opinion pieces in national newspapers. Having keen
interestinagriculturalissues,shehascarriedoutseveralresearchstudiesandundertaken
assignmentsfortheWorldBank,InternationalFoodPolicyResearchInstitute(IFPRI),
theUnitedNationsConferenceonTradeandDevelopment(UNCTAD),NCAERand
WWF-India.ShereceivedtheJawaharlalNehruAwardforOutstandingPost-Graduate
AgriculturalResearchfromtheIndianCouncilofAgricultureResearch,NewDelhiin
2008.SheisalsotherecipientoftheDr.R.T.Doshiawardforthebestpaperpublishedin
theAgriculturalEconomicsResearchReviewin2014and2015.
AmareshDubey isaprofessorattheCentrefortheStudyofRegionalDevelopment
(CSRD),JawaharlalNehruUniversity(JNU),NewDelhi,India.Hehasover28years
of teaching and research experience. Before joining JNU in 2008, he taught eco-
nomicsattheNorth-EasternHillUniversity,Shillongandwasaseniorfellowatthe
National Council of Applied Economic Research, New Delhi. His publications
include four co-authored and co-edited books, over 60 articles and papers in inter-
national and national refereed journals and edited volumes, 34 research project
reports and commissioned policy papers, as well as numerous opinion pieces in
national newspapers. He has visited several universities and institutes in India and
abroad to deliver lectures and seminars, in addition to over a hundred invited pre-
sentations at international and national seminars and conferences over the last few
years.HehasbeenamemberofdifferentacademicandexecutivebodiesatJNUand
other universities and institutes, and a member of several central and state govern-
mentcommitteesandotherstatutorybodies.
vii
Chapter 1
Introduction
Seema Bathla and Amaresh Dubey
The key policy agenda for independent India has been to tackle mass poverty and
hunger. Almost entire lot of poor lived in rural India. It emerged that agricultural
growth has to play the most important role in attaining self-sufficiency in the
production of food grains, reducing poverty and eliminating hunger (Ahluwalia
1978). An increased focus on agriculture development through public invest-
ments in irrigation, input subsidies and HYV technology along with price
incentives to farmers paid off. With the first phase of green revolution during the
1960s and early 1970s, India did achieve the food sufficiency objective in general
and contributed significantly to poverty reduction though in a limited number of
states. The foodgrain production growth has surpassed the rate of growth in pop-
ulation, and the country now boasts to be a net food exporter.
In the contemporary times, the Indian agriculture is at crossroads. On the one
hand,itfacesseriouschallengesofacceleratingproductivityandefficiencytoraise
farmers’income,maintainingequityandsustainability,andontheotherithastoact
as a prime mover behind the growth of the rural non-farm sector for poverty
alleviation far more widely than during the first phase of green revolution. Apart
from increased rural incomes, the development of agriculture is considered crucial
forachievingfoodsecurityandprogressofthepoorersectionsofpopulationinthe
less developed regions. For long, the rate of agricultural growth remained modest
between 2 and 3% despite the initiation of economic reforms under the structural
adjustmentprogramme.Thegrowthperformancedecelerated considerablytowards
theendofthe1990sculminatingintoanagrariancrisisinseveralstates(Chandand
Parappurathu 2012). Frequent recurrence of droughts after 1998 combined with
S.Bathla(cid:1)A.Dubey(&)
CentrefortheStudyofRegionalDevelopment,JawaharlalNehruUniversity,
NewDelhi,India
e-mail:[email protected]
S.Bathla
e-mail:[email protected]
©SpringerNatureSingaporePteLtd.2017 1
S.BathlaandA.Dubey(eds.),ChangingContoursofIndianAgriculture,
DOI10.1007/978-981-10-6014-4_1
2 S.BathlaandA.Dubey
inadequate irrigation facilities, credit and crop insurance facilities, high cost of
inputsandlessprofit,fewerofffarmopportunitiesleftfarmerswithnochoicebutto
endtheirlife.TheworsthitstateswereMaharashtra,KarnatakaandJharkhandthat
faced back-to-back droughts and declining agriculture incomes (Haque 2016).
The agrarian crisis seemed to be a manifestation of failure of policies at large
whichenabledgrowthinoutputbutmiserablyfailedtoincreasefarmincomeindue
courseandamelioratehardshipsfacedbythefarmers.Thefarmincomepercultivator
isnearly34%ofincomeofnon-agriculturalworkerwithlittlechangeoverthepast
decades (Chand 2017). Large inter-state as well as intra-household disparities in
agricultureincomehavenowoccupiedthecentrestageofdiscussion.Thepotential
factorsbehindsuchinequalitiesaresaidtobeclimaticconditionsandpolicybiasthat
favoureddevelopmentofbetterresourceendowednorthernregionsthroughadoption
ofgreenrevolutiontechnologies,pricesupportmeasuresandrapiddevelopmentof
irrigationandotherinfrastructuresthatotherthanthenorthernstatesdidnotget.The
economicreasoningbehinddevelopmentofnorthernstateshasbeentherealisation
ofhigheroutputatreasonablecostandgrowthofagriculturalproductivityatlower
cost (Fan et al. 2000). The eastern and central regions, mostly rainfed and agricul-
turally dependent, continued to be in a low land and labour productivity trap and
could not catch up with the states benefitted from green revolution. The persistent
regional inequalities encompassing economic and social spheres do not speak vol-
umesaboutthepoliciesbeingfollowedacrossIndia’sruralareasthatmaycomein
thewayofachievinglongtermprosperityandsustainabledevelopment.
Withanaimtoovercometheagrariancrisisandfostergrowth,thegovernmentin
2003–04steppedupinvestmentsinmajorandmediumirrigationprojects,National
Food Security Mission, Rashtriya Krishi Vikas Yojna and expenditure on drought
reliefprogrammes.Thequantumofsubsidiesonkeyinputsandirrigationmachinery
alongwithminimumsupportpriceforpaddy,wheatandpulseshavebeenenhanced
to incentivise farmers to invest (Joshi et al. 2017; Bathla et al. 2017). Initiation of
cropinsurancescheme,soilhealthcardsandstrengtheningofextensionprogrammes
havebeenputinplaceforthepurpose.Thegovernmenthasalsoincreasedallocation
of funds towards various rural infrastructure development programme, the most
important ones being Pradhan Mantri Gram Sadak Yojna (rural roads), Pradhan
Mantri Awas Yojna (housing for all) and Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA)(employmentgeneration).
A big push in public expenditure in major and medium irrigation at an annual
rate ofgrowth ofcloseto6%andinput subsidies during theperiodsfrom 2002/03
to 2013/14 seems to have led to a much higher rate of growth in private capital
formation in agriculture by about 9% per annum. As a result, agriculture experi-
enced its best and historical growth performance just under 4% from 2003–04 to
2011–12.Thoughslightlyshortofachievingthetargetedannualgrowthrateof4%
at the national level, agriculture overcame the decelerated growth phase experi-
enced during the 1990s. An upturn was evident in the laggard states, viz. Bihar,
Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha and Rajasthan that achieved
higherthantheallIndiagrowthrate,above6%.Agrowingdiversityinagricultural
performance wasalso perceptibleasshare offruitsand vegetables, spices,oilseeds
1 Introduction 3
and milk and eggs in total value of output of agriculture and allied activities
increased. The recent NSSO’s 70th round situation assessment survey of farmers
(2012–13)corroboratesthistransformation,showingmanifoldincreaseintheshare
of farmers’ income from livestock activities to 11.9 from 4.3% reported in the
2002–03survey.Theshareofincomefromanimalfarmingisreportedtobemorein
thepoorerstateswhichalsohappenedtobeonahighergrowthtrajectoryduringthe
2000s. Surprisingly, the share of receipts from cultivation recorded an increase by
only 2% points to 47.9%, whereas it showed a slight decrease from non-farm
business and wages-salaries. The per capita rural income at market prices surged
from Rs. 5783 in 1993 to Rs. 39,556 in 2011.
Consequently upon an increase in farm income, resource allocation on
employment generationprogrammeand growthin manufacturing and construction
sectors,employmentin thenon-farm sector appears to have accelerated. The share
ofnon-farmemploymentintotalruralemploymenthasincreasedfrom22%during
1993–94 to 35% by 2011–12. The rural poverty headcount also came down to
about14%from37%overaspanof18 years(ThoratandDubey2012).Beforeone
tries to reach conclusions on the MGREGS, it is important to understand that the
response to provision of 100 days of employment to the poor is somewhat mixed.
There are many who think that this flagship programme of the government has
helpedrurallabourforce tocomeoutofdistressbutatthesametime ithascaused
severe shortage of labour for agricultural operations, consequently pushing up real
farm wages by about 7% per annum.1 The dearth of labour is identified more in
agriculturallybetteroffstates,whichhasputpressureonfarmerstolookforfeasible
production structure and technological and institutional changes. Notwithstanding
its differential impacts across the states, the scheme does not appear to have been
beneficial to women workers who remain marginalised in agriculture and receive
lower wages.
The last two years (2015 and 2016) have again been appalling for the agricul-
tural and allied sector due to an average 0.5% rate of growth amid an impressive
growthoftheeconomyat7.6%.Whilethesituationislessgriminthenorthernand
southern states, farmers in the central and eastern states, mostly rainfed and some
pockets of Maharashtra and Jharkhand intermittently face setbacks. Dwindling
international agriculture prices, increasing input cost and declining profitability
coupled with inadequate technological, crop insurance and credit support persist
and add to their woes. An ever-increasing contraction in the size of land holding
and hence rising share of small holders is another cause for concern. These
developments are worrisome, especially in the light of recent resolution of the
Union government to double farmers’ incomes by 2022–23.
Theboldtargetofdoublingfarmers’incomesinthenextsixyears’restsoncrop
cultivationandimprovementinproductivity,diversificationtohigh-valuecropsand
agro-forestry, livestock and bee keeping, each encouraged to undergo value addi-
tion in the processing industry. The plan is also towards growth in non-farm
1Seeamongothers,Desaietal.2015.