Agricultural research and productivity growth in india

Robert E. Evenson, Carl E. Pray, Markw Rosegrant

Research output: Contribution to journalArticlepeer-review

13 Scopus citations

Abstract

India has one of the largest public agricultural research establishments in the world. Among developing nations, only Brazil and China have comparable levels of expenditure or numbers of professional staff. However, the economic liberalization policies of the Indian government since 1991, together with budget constraints and concerns that the returns to public research may be declining, have raised questions about how much investment in public agricultural research. How much has productivity growth contributed to the total growth of output? What have been the sources of productivity growth? Are the returns to agricultural research in India still high? These questions are examined in this report by assessing the effects that public investment in agricultural research, extension, and irrigation and private domestic agricultural research have had on the growth of total factor productivity (TFP) in the Indian crop sector. Chapter 1 provides some background on the issues. Chapter 2 describes investment in four major productivity producing activities: Indian public research, the international agricultural research centers (lARCs), international technology transfers, and private research conducted in India. It also discusses the institutional structure of research and the policies for science and technology that affect technology transfers and private research investment and describes the activities that make these sources of technology more effective-extension, irrigation, and rural infrastructure. The generation and adoption of new plant varieties has been the primary measure of success of Indian public agricultural research and of the lARCs. Chapter 3 examines the development of new crop varieties by source and assesses the contributions of public, international, and private crop research to the development and spread of modem varieties. Chapters 4 and 5 provide an analysis of TFP, which is the ratio of total agricultural output to total inputs. Chapter 4 describes the methodology for measuring TFP growth in Indian crop production. It also gives TFP measures by region and period. Chapter 5 assesses the quantitative effects of agricultural research, extension, irrigation, and other public and private investments on agricultural productivity. It analyzes the trends and sources of TFP growth in India, examines the contribution of several sources ofthat growth, and estimates the marginal economic rates of return to public and private investments that increase TFP. The contribution to economic growth and economic rates of return to investments in research, extension, and modern varieties are computed by time period in order to assess whether the effects of these investments change over time. The report has several main conclusions and policy implications: Indian research programs-with support from lARCs (especially the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), the International Rice Research Institute (IRRI), and the International Maize and Wheat Improvement Center (CIMMYT)-have significantly improved crop technology. These improvements are embodied in several generations of improved crop varieties. The private sector in India also engages in extensive research and development relevant to agriculture. It has increased its investments rapidly over time. Expenditures on agricultural research and development in the private sector are approximately half those expenditures in the public sector. Much research and development conducted by the international private sector is also relevant to agriculture in India. India's agriculture has realized substantial gains in productivity, as measured by TFP indexes. These gains have varied by period (they were highest during the Green Revolution) and by region (they are highest in wheat-producing regions and in regions with environments favorable to rice production). But virtually every district in India has seen TFP grow. TFP growth has contributed roughly 1.1-1.3 percent per year to the growth of crop production in India. Conventional inputs have contributed about 1.1 percent per year since 1956. TFP and conventional inputs have thus contributed 2.3 percent per year to the growth of crop production. They have made it possible for India to increase food production per capita despite high population growth rates and limited land resources. The analysis in this report shows that several types of investments have been associated with and contributed to the growth of TFP. Public agricultural research (and high-yielding varieties) accounted for nearly 40 percent of TFP growth between 1956 and 1987. This study is one of the first to investigate the contribution of research and development in the private sector to productivity growth in a developing country. Private sector research and development was significant, accounting for more than 11 percent of TFP growth. Investment in agricultural extension programs and improved rural markets have also contributed to the growth of TFP. The impact of extension has been very large, especially before the Green Revolution. Irrigation investment generated TFP growth over and above the contribution to output growth that irrigation makes as a "conventional" input. This additional contribution from irrigation comes largely by providing an improved environment for crop technology (for example, through interaction between technology and irrigation). Modern chemical inputs also generated TFP growth over and above their conventional contribution partly by complementing the highyielding varieties. The hypothesis that the contributions of research, extension, and irrigation to TFP growth declined over time is examined by disaggregating the effects of these factors into three periods: before the Green Revolution (1956-65), the early Green Revolution (1966-76), and the mature Green Revolution (1977-87). During the early Green Revolution, modern varieties of wheat and rice spread particularly fast in the most favorable crop environments. They were especially effective in the Punjab. During the mature Green Revolution, modern varieties were more widely adopted geographically. The marginal impact of public research on TFP was moderately higher in 1966-76 than in 1956-65. More importantly, during the mature Green Revolution, when returns might have been expected to decline as modem varieties spread more broadly, the marginal impact of research on TFP was 50 percent higher than before the Green Revolution and 17 percent higher than in its early years. The marginal impact of the expansion of irrigated area on productivity also increased over time. This improvement can be attributed to rapid growth in the proportion of private tubewell (groundwater) irrigation. No change was found in the contribution of extension to the growth of TFP. Finally, the report estimates the marginal internal rates of return to public and private investments. The returns to public agricultural research were greater than 50 percent. The rates of return to extension, domestic private research and development, and to imported modern varieties generated mainly by the lARCs were also high. The sustained high rates of return to research and extension suggest that investment in these productivity-enhancing activities should be increased. These findings also suggest that the removal of policy constraints on private-sector research could have large payoffs.

Original languageEnglish (US)
Pages (from-to)XI-88
JournalResearch Report of the International Food Policy Research Institute
Issue number109
StatePublished - 1999
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Development

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