1. Pattern and Consequences of Intensive Agricultural Growth in Punjab R.S. Sidhu

2. Issues Agriculture growth in Punjab is ‘most often cited’ success story. It has been made possible by new technology, development of infrastructure and institutional support. But recently the growth has shown signs of deceleration. This paper therefore deals with the following issues. 1.What is the pattern of growth? 2.What are the determinants? 3.What are the constraints to future growth? 4.What are the policy options to accelerate growth?

4. Gross value of crop output at 2001-02 prices (Rs. crore) RiceWheatCottonOilseedsPulses Sugarcan e Other cereals Aggregat e 1967-682394210361020345717637432587252145 %4.5940.3419.578.7714.650.8311.26100 1980-8118757483651749026776675353411198428 %19.0649.1417.772.726.780.364.18100 1990-91377357660229062115078725402272155232 %24.3149.3518.720.745.070.351.46100 2001-0251133982171956993020068382696175389 %29.1556.0011.160.531.140.481.54100 CGR (%)8.564.101.35-4.58-1.351.38-3.173.53 Source: Singh and Sidhu, 2004

7. Agricultural Growth: 1967-815.64% 1981-915.16% 1991-20010.83% Source: Singh and Sidhu, 2004

8. YearArea under HYV Fert.UseIrrigat ed area (%) Tube- wells (In ’000) TractorsCroppi ng Intensit y (%) Rice (000h a) Wheat (000ha) Total (000 Nutrient tons) Per Ha NSA (nutrient kgs) Total (In Thousands) No./00 0 ha 70-71130158921350711925.31.3140 80-81109527577621808160011928.4161 90-911906327112202909380028968.5178 02-03253033751441340951150451106.8185

9. Average use of inputs for wheat and rice in Punjab (Per ha) Year/CropFertilizer use (kg of nutrients) Chemical Use (Rs. at 1980-81 prices) Machine Use (Rs. at 1980-81 prices) Wheat 1981-84156.7057.31495.34 1998-2000224.00202.27680.11 Paddy 1981-84180.50113.69379.55 1998-2000182.80267.75629.06

10. Role of Agricultural Technology Development CropNo of Research Scientists Varieties Developed Wheat7243 Rice6225 Cotton3525 S’cane18 Other cereals2440 Oilseeds4142 Pulses4543 Fodder836 Fruits17124 Vegetables2169 Livestock73na Total416 Note: Fruits include 21 fruit crops and vegetables 25 vegetables

11. Role of Technology Development: Growth and Variability in Productivity CropCGR 1965/66 to 2001-02CV of de-trended yield 1970- 71 to 2001-02 Paddy2.729.08 Cotton0.2725.74 Sugarcane1.6615.65 Maize1.3913.33 Wheat2.764.88 Gram0.2519.57 Rapeseed2.5713.15

12. Role of Price Policy Two issues are important Movement in the relative prices Variability in prices

14. Index of Income and Yield for Paddy 0.0 50.0 100.0 150.0 200.0 1981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-991999-002000-01 Index (%) YieldIncome/TCIncome/GR MSP Increase: 9.52% MSP Increase: 14.88% Role of Price Policy in Profitability

15. MSP Increase: 7.31%MSP Increase: 17.11% Role of Price Policy in Profitability Index of Income and Yield for Wheat 0.0 50.0 100.0 150.0 200.0 250.0 300.0 1981-821982-831983-841984-851985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-991999-002000-012001-02 Index (%) YieldIncome/TCIncome/GR MSP Increase: 7.31%MSP Increase: 17.11%

16. Realisation of cost and level of subsidy on power supply to agriculture 1991- 92 1992- 93 1993- 94 1994- 95 1995- 96 1996- 97 1997- 98 1998- 99 1999- 00 ACR (%) 10.449.3913.8122.2723.8316.34000 Subsidy Rs. million 4664.26448.47706.57201.67226.29250.414701.916903.920161.8

17. Constraints to Growth Technology fatigue Agrarian structure Rise in fixed costs Minimum support prices versus International prices Lack in value addition Depleting groundwater resources Declining fertility status of soils

18. Deceleration/Stagnation in Productivity Growth CropActual 1999-02 (q/ha) HighestAs % of PotentialCGR of Yield 1979/80 to 1989/90 CGR of Yield (1989/90 to 2001/02 ActualHighest Wheat45.4246.9681.7384.502.89s2.02s Rice34.6635.7975.8678.331.74s0.09ns Cotton (lint) 3.856.3650.5983.607.0s(-) 5.80s Maize26.9727.9360.6662.10(-) 0.993.26s Rapeseed and Mustard 11.7512.6264.2869.044.96s1.38ns Sugarcan e (in gur) 64.0165.2976.2277.740.640.13

19. Land –man ratio in the farming sector of Punjab YearNSA/agril. worker (ha) GCA/agril. worker (ha) 19611.932.44 19771.652.32 19811.462.36 19911.252.22 20011.192.20

20. Trends in machinery cost for wheat and paddy in Punjab (In Rs/ha) YearWheatPaddy Machine cost at 1980/81p Labour use (man-days/ha) Machine cost at 1980/81p Labour use (man-days/ha) 1981-84495.3449.44379.55103.60 1985-88569.2852.35432.47102.35 1991-94540.1943.89546.6670.60 1995-98534.0742.24579.0859.21 1998-2000680.1138.88629.0656.32 % change (simple) 1991-94 over 1981-84 9.05-11.2244.03-31.85 1998-2000 over 1991-94 25.90-11.4115.07-20.22 1998-2000 over 1981-84 (%/annum) 1.87-1.063.29-2.28

23. Compound growth rates of production for wheat and rice (In per cent per annum) StateWheatRice 1971-72 to 1981-82 1981-82 to 1991-92 1991-92 to 2000-01 1971-72 to 1981-82 1981-82 to 1991-92 1991-92 to 2000-02 Punjab5.233.572.5316.915.482.86 Haryana6.555.484.2012.063.464.80 Madhya Pradesh1.743.555.86--- Bihar-0.914.363.00-0.063.796.18 Rajasthan5.342.814.96--- West Bengal-4.44-0.746.13--- Karnataka2.18-5.164.461.871.552.72 Maharashtra10.32-1.864.79--- Tamil Nadu---0.183.072.00

24. Increase in proportionate area of the central zone under water table depth of more than 10 meter YearCentral zoneSouth west zone 5-10 mt>10 mt5-10 mt>10 mt 19966925478 199849424312 20004153509 200410905210 In per cent

25. Ground Water Status in Punjab Rate of Exploitation (%) Blocks (in per cent of total) Sub- Mountainous Central (Paddy zone) South West (Cotton zone) Punjab Below 10078177647 100-20022631241 200-30001569 300-4000332 Above 4000231 Total Blocks366933138

26. Rise/ fall in Water table Sangrur (Barnala) 43  Patiala 33  Jalandhar 22  Amritsar 18  Kapurthala 17  Faridkot 13  Ludhiana 13  Ropar 08  Hoshiarpur-1 02  Gurdaspur 02  Hoshiarpur-2 05  Mansa 09  Ferozpur 17  Bathinda 21 

27. N, P, K Status of Punjab Soils, 1981 through 2002 (In per cent samples deficient) Nutrient availability LowMediumHigh 1981-901991- 2002 1981-901991- 2002 1981-901991- 2002 N (OC)7866223202 P48622923 15 K8945514640

28. Average water table depth in some central districts (in meters) DistrictMeasuredPredicted 1993200320132023 Sangrur13.820.627.534.3 Patiala11.718.425.232.0 Moga9.418.627.837.0

29. Average water table depth (m) in different zones ZonesMeasuredPredicted 1993200320132023 Sub- montane 17.618.519.420.3 Central11.116.221.326.5 South- west 6.88.910.913.3

30. Lack of Value Addition Only Primary processing for rice and wheat in the state Less than 2% of fruits and vegetables are processed due to -lack of vertical integration of the market -higher marketing charges -less developed marketing infrastructure to handle the perishables -damand issue About 26% of the milk production is processed in the organised sector

31. Policy Options Promoting high value enterprises like dairying, fruits and vegetables, poultry, etc. Promoting value addition and processing Vertical integration of the market Rationalisation of the taxes and other charges Rational input and output pricing policies Improving water use efficiency

32. Thank You

33. Decomposition of Agricultural Growth in Punjab Average annual Growth rates (%) PeriodAgri. Growth Area effect Land productivity effects Indian Punjab OverallAggregate crop yield effect Inter-crop shift effect (static) Inter-crop shift effect (Dynamic) 1967-19815.942.233.712.430.251.03 % contribution 10037.5462.4640.914.2117.34 1981-19915.161.463.72.710.810.18 % contribution 10028.2971.7152.5215.73.49 -100-73.21-21.82-4.98 1991-20010.830.490.340.260.070.01 % contribution 10059.0440.9631.338.431.2

34. Contribution of different crops to land productivity (yield+crop shift effects) growth (%) Crop2001-02 over 1970-71 Rice66 Bajra-1.1 Maize-7.3 Wheat52.9 Barley-4.4 Gram-2.8 G’nut-0.9 R&M-1.4 S'cane-0.9 Am. Cotton0.3 Desi Cotton-0.2

35. Share of different crops/enterprises and other activities in the research budget of the University YearResearch Budget (Rs. Million) Percentage of Research budget to Wheat & rice Cotton and S’cane Other field crops Horticul tre Livestoc k and fishery Post harvesti ng Marketi ng Others 198041.5161512 1651.223 1990144.1181218131130.524 2000547.1191012 40.730 2001608.520911 50.731 Source: The World Bank, 2003

36. N, P, K Status of Punjab Soils (in per cent blocks)