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

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?

Gross value of crop output at prices (Rs. crore) RiceWheatCottonOilseedsPulses Sugarcan e Other cereals Aggregat e % % % % CGR (%) Source: Singh and Sidhu, 2004

Agricultural Growth: % % % Source: Singh and Sidhu, 2004

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

Average use of inputs for wheat and rice in Punjab (Per ha) Year/CropFertilizer use (kg of nutrients) Chemical Use (Rs. at prices) Machine Use (Rs. at prices) Wheat Paddy

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

Role of Technology Development: Growth and Variability in Productivity CropCGR 1965/66 to CV of de-trended yield to Paddy Cotton Sugarcane Maize Wheat Gram Rapeseed

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

Index of Income and Yield for Paddy Index (%) YieldIncome/TCIncome/GR MSP Increase: 9.52% MSP Increase: 14.88% Role of Price Policy in Profitability

MSP Increase: 7.31%MSP Increase: 17.11% Role of Price Policy in Profitability Index of Income and Yield for Wheat Index (%) YieldIncome/TCIncome/GR MSP Increase: 7.31%MSP Increase: 17.11%

Realisation of cost and level of subsidy on power supply to agriculture ACR (%) Subsidy Rs. million

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

Deceleration/Stagnation in Productivity Growth CropActual (q/ha) HighestAs % of PotentialCGR of Yield 1979/80 to 1989/90 CGR of Yield (1989/90 to 2001/02 ActualHighest Wheat s2.02s Rice s0.09ns Cotton (lint) s(-) 5.80s Maize (-) s Rapeseed and Mustard s1.38ns Sugarcan e (in gur)

Land –man ratio in the farming sector of Punjab YearNSA/agril. worker (ha) GCA/agril. worker (ha)

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) % change (simple) over over over (%/annum)

Compound growth rates of production for wheat and rice (In per cent per annum) StateWheatRice to to to to to to Punjab Haryana Madhya Pradesh Bihar Rajasthan West Bengal Karnataka Maharashtra Tamil Nadu

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 In per cent

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 Above Total Blocks

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 

N, P, K Status of Punjab Soils, 1981 through 2002 (In per cent samples deficient) Nutrient availability LowMediumHigh N (OC) P K

Average water table depth in some central districts (in meters) DistrictMeasuredPredicted Sangrur Patiala Moga

Average water table depth (m) in different zones ZonesMeasuredPredicted Sub- montane Central South- west

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

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

Thank You

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) % contribution % contribution % contribution

Contribution of different crops to land productivity (yield+crop shift effects) growth (%) Crop over 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

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 Source: The World Bank, 2003

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