Agriculture - world-wide - is a vital determinant of the livelihoods of small-holder farmers and rural communities. Agricultural growth - throughout global history - has been the pro-genitor of broad-based economic growth and development, as linkages between farm- and non-farm economies generated widely-based employment, income, and growth. Agricultural growth shall thus in the future also be the sine qua non for alleviation and eradication of rural poverty and hunger in those countries that have not yet fully achieved their broad-based growth. This is particularly so in India, where the numbers of rural poor - including the land-less and those farming sub-marginal holdings - are so large. Moreover, the smallness of many of the Indian farm holdings, and the low income elasticity and high price elasticity of cereals, together dictate that future agricultural growth shall need to diversify beyond its current cereals emphasis.
However, new analyses of Indias agricultural growth during 1970-2001 give cause for concern - perhaps for alarm. For all cereals - in aggregate - the annual growth rate in production during the six-year segments 1970-76, 1976-82, 1982-88, 1988-1994, 1994-2000 was respectively 2.5, 2.5, 3.0, 2.6, and 1.8 %/ann. Corresponding analyses for the index of total agricultural production show a similar pattern, with the growth rate for 1994-2000 attaining only 1.5 %/ann.
Thus in the late 1990s, the growth rates, though creditable, are lower than at any time since 1960. These declines may constitute in part a response to diminishing demand and to inadequate returns to farmers: globally, the Year-2001 world prices for rice, oil-seeds, and livestock were the lowest since 1998; and in India, the strategic buffers were fully stocked. However, for cereals, the 1994-2000 growth rate for yield - at 1.7 %/ann, and much below the 1982-1994 average of 3.5 %/ann - causes further anxiety. This slackening in yield growth rate may result from several causes: from a lessening of inputs as farmers respond to falling prices, or from non-increase in inputs where farmers have already optimized their inputs applications, and from some progressive closing of yield gaps in some states. Previous analyses (Kumar, 1998) had correspondingly observed a lessening in the growth of total factor productivity (TFP - which quantifies technological contributions) from 1.5-2.0 %/ann in the 1970s and 1980s to 1.0 %/ann in the 1990s. Moreover, this cereals-yield growth slackening has been compounded by the slight decline in cereals area (averaging - 0.1 %/ann) since the early 1980s.
The foregoing 1994-2000 growth rates for various entities (at 1.8 %/ann, 1.5 %/ann, 1.7 %/ann) are only marginally higher than the forecast human-population growth rate (1996-2010) of 1.3 %/ann. Moreover, a projection of the 1988-2000 trends suggests that those various growth rates may indeed fall below 1.3 %/ann during 2001-2004. The latest (early-2002) statistics for all-cereals production suggest that during 1997-2001 the growth rate had indeed decreased to approximately 1.3 %/ann. A low rate of future agricultural growth - particularly if below the human-population growth rate - would have adverse consequence for employment generation and for lessening of poverty.
These recent analyses give results that are consistent with those derived from earlier data-sets. Thus Bhalla (2001) noted that the annual growth rate of Agricultural Gross Domestic Product (AGDP) declined from 3.2 %/ann during 1981-91 to 1.9 %/ann during 1991-1999. Corresponding figures for the crops-sector AGDP were 3.5 %/ann and 2.4 %/ann, and for the crops-sector production 2.6 %/ann and 1.4 %/ann. Yield growth rates similarly decreased between the 1980s and the 1990s: for rice from 3.2 to 1.3 %/ann, for wheat from 3.1 to 1.3 %/ann, and for cotton (dramatically) from 4.1 to 0.6 %/ann.
These crucial growth-rate estimates - as of poverty and under-nourishment, and of yield, productivity, and production in the several agricultural sectors - derive from time-trend analyses. There can be additional insights and more-dependable near-term forecasts if such analyses are conducted not only using ten-year-length time-segments (as is general practice) but also using six-year-length segments. Compared to analyses based on ten-year segments, those based on six-year segments have an imprecision that is typically larger by somewhat less than one third. This disadvantage is perhaps more than compensated by the larger member of estimates (segments) where-from to assess the time trends, and by the increased relevance - for near-term forecasts - of the later estimates in those time-trend series.
Kumar and Mittal (2000) quantified the proportional contribution of crop area to production. During 1967-1981, the partial contributions to production growth were: yield 48 per cent, area 21 percent, cropping pattern 20 percent, and interactions 11 percent. At 1982-96 the corresponding proportions were 57, 8, 22, and 13 percent. The contribution of yield has thus increased as that of area has decreased. The increased contributions from cropping pattern and from interactions may represent increases in production efficiency that result from research and technology transfer.
Growth (or decline) in total factor productivity (TFP) results predominantly from public investment (or lack of investment) in infrastructures (irrigation, electricity, roads) and in agricultural research and extension, and from efficient use of water and plant nutrients. The observed decreases in the rate of increase of TFP are in large part a consequence of a substantial lessening of investments - notably public-sector investments - in Indias agriculture. Indeed, Indias government expenditures during the 1990s for agriculture per agricultural worker have been the lowest in South Asia, and indeed below those of Sub-Saharan Africa.
It is well recognized that future increases in agricultural production (crops, livestock, fisheries, forests) must accrue essentially through increased production per unit land area. There is consequent requirement to strengthen the resources wherewith the farmers, foresters, and fisher-folk can raise their production efficiency and hence their total factor productivity (TFP).
Investment in these agricultural resources must therefore be increased, and must be directed along those avenues that are known to increase productivity: to the infrastructures and to the research-extension-farmer-market system. Particularly, investments - including investments in location-specific research/extension - should address those regions where current productivity is low and the potential for sustainable increase is high.
The benefits of increasing TFP are felt nation-wide: costs of production decrease, and prices fall and stabilize. Producers and consumers both gain. Decreased food prices preferentially benefit the poor (whether urban or rural), since the poor spend proportionately much more of their income on food (particularly cereals). Lower prices of home-produced agricultural products will also assist Indias agriculture to accommodate to the globalization of agricultural trade.
For the families operating marginal-size farms and for the rural poor, low productivity constitutes a major constraint as those rural families strive to achieve household food security. Investments and efforts to improve and sustain small-farm productivity are therefore vital. A synergistic blend of traditional and modern knowledge, tools, and technologies - the eco-technology - should be mobilized to assist small-holder households (Pinstrup-Andersen, 2000). Similarly, research, technology development, and extension programmes should strengthen those of their activities that target the needs and opportunities of small-holders - including women small-holders.
It is thus encouraging to report - and to counter common mis-perception - that for crops that are important to non-irrigated small-holdings there has in recent years been technological progress. Notable amongst these crops are the coarse cereals and the pulses, and also the oilseeds, fibres, and vegetables. Analyses (FAO/RAP, 2001) for eighteen major crops (irrigated and non-irrigated) and for several states (here summarized in Appendix Table 2) showed positive TFP growth for all eighteen of those crops - including those non-irrigated - though not necessarily in every state. The analyses correspondingly identify those crops and states where remedial research/extension action is warranted.
Developments and investments that lead to growth in total factor productivity are likely also to lead to poverty reduction. Appendix-Table 3 summarizes analyses for fourteen states in which poverty decreased during 1973-98 at rates ranging from 2.2 to 5.9 %/ann. In all of those states, one or more of the major crops exhibited positive TFP growth. In Andhra Pradesh and Punjab - in each of which poverty decreased at 5.9 %/ann, TFP growth was notably positive for rice, sorghum, and groundnut (Andhra Pradesh) and for rice and wheat (Punjab). Policies and investments that increase TFP are thus highly likely to lessen rural poverty and hunger.
Such policies and investments should consolidate and expand the ongoing programmes - including their location-specific research/extension components - to assist the non-irrigated and the dry-land areas. High returns may be expected for investments in physical and institutional infrastructures, in inputs-supplies facilities (quality seeds and agro-chemicals), in watershed management, small-scale mechanization, hybrid cultivars, and soil-testing services.
Additionally, literacy - and numeracy - bring appreciable benefit to farm productivity and modernization. Literacy correlates strongly (Kumar and Mittal, 2000) with the adoption of cultivars, nutrients management, and mechanization, and with productivity. Increased literacy may thus be expected to generate increases in agricultural productivity and hence in household and in national food supplies. Increasingly, Indias future agriculture will be science-led and will require sound economic management; there would consequently be high return to investment in rural education - for males and for females.