Agricultural productivity

Agricultural productivity is measured as the ratio of agricultural outputs to agricultural inputs. While individual products are usually measured by weight, their varying densities make measuring overall agricultural output difficult. Therefore, output is usually measured as the market value of final output, which excludes intermediate products such as cornfeed used in the meat industry. This output value may be compared to many different types of inputs such as labour and land (yield). These are called partial measures of productivity.

Agricultural productivity may also be measured by what is termed total factor productivity (TFP). This method of calculating agricultural productivity compares an index of agricultural inputs to an index of outputs. This measure of agricultural productivity was established to remedy the shortcomings of the partial measures of productivity; notably that it is often hard to identify the factors cause them to change. Changes in TFP are usually attributed to technological improvements.

India's Agricultural Productivity

Two decades ago, it was an extremely educative experience to listen to Professor Kazushi Okhawa who visited the Centre for Development Studies in Thiruvanant-hapuram, Kerala, to initiate a project on the relevance of Japan’s economic development to developing countries like India. Since then, it has always fascinated one to keep abreast of the research of Japanese institutions on India. It was therefore with great interest that one read these two discussion papers* from the University of Tsukuba in Ibaraki.

Trends in agricultural productivity between 1970 and 1993 is the focus of the first paper co-authored by Anit Mukherji and Yoshimi Kuroda. The time period chosen has been dictated by the fact that it follows the introduction of the seed-water-fertiliser packages termed as the Green Revolution. Subsequently, there has been an effort to increase agricultural productivity through scientific methods throughout India. What then does the relevant data indicate on trends in total factor productivity (TFP) in agriculture?

If one abstracts from any discussion on the methodology adopted to measure total factor productivity and the quality of data, the story these authors relate is that there have been substantial improvements in total factor productivity at the national level - especially from the late 1970s to the late 1980s - but there are wide divergences across 14 important states. At an all-India level, the trend growth rate total factor productivity thus shows an acceleration from 1.45 percent between 1973 and 1980 to 2.33 percent in the 1980s. But since then, there has been a discernible decline in total factor productivity growth to 1.21 percent till 1993.

The total factor productivity growth pattern thus is consistent with the favourable impact of the Green Revolution in the 1970s, which gathered strength till the first half of the 1980s. According to Mukherji and Kuroda, the experience of the years from the second half of the 1980s indicates that the Green Revolution has perhaps run its course and that it would be “difficult to sustain a high rate of total factor productivity growth in the absence of a major technological breakthrough in the field of agricultural science”.

During the 1970s, the best performance in total factor productivity was registered by the vanguard agrarian states of Punjab and Haryana. This is not surprising as they had a headstart over the rest in the introduction of the Green Revolution. Other regions which showed high rates of total factor productivity growth were those...