Project title: Analysing Impact of Agriculture Policy, Technology, Institutions and Trade on

                       Agriculture Growth, Farm Income, Sustainability and Rural Poverty

Project leader: Dr. Ramesh Chand

Project team: National Professor Project

Background:

Due to lack of suitable policy direction the agriculture sector has suffered from deceleration in growth whereas non agriculture sector has witnessed acceleration in output growth. Historical sources of growth seems to have been exhausted and new pathways for growth and development need to be explored.  Due to lack of clear policy, agriculture sector now is marred by serious problems like: (1) mounting input subsidies, (2) declining public investment, (3) deteriorating public support system and infrastructure, (4) natural resource degradation, (5) preponderance of tiny holdings said to be uneconomic, (6) persisting underemployment and unemployment and (7) slowdown in output growth and agricultural incomes in developed region (8) regional inequity  (9) rising rural distress. There is no study available in the country to treat all these problems together as most of these are closely linked and require a very comprehensive attempt. The present proposal is an endeavour in this direction.

Objectives:

1.  To develop a theoretical macro economic model of Indian agriculture to analyze the impact of changes in various policy instruments, infrastructure, technology and trade liberalization on output, prices, input use, consumption, trade, wages, poverty etc.

2. To provide short and medium term outlook of agriculture sector and trade under different policy scenarios.

3. To suggest suitable technological and other interventions to attain different goals of output growth, regional equity, sustainability, poverty and nutrition.

4. To explore the possibility and suggest ways and means to revitalize agriculture and put it back on historical growth path.

Study area: Country and States

Methodology:

1.      Macro econometric model of Indian agriculture

2.   Simultaneous equation model

3.   Welfare estimation

4.   Benefit-cost analysis

Key findings:

1. Main reasons for slowdown in agri growth during 1997-98 to 2004-05 are: slowdown in fertiliser, decline in public investments, decline in power supply to agriculture, deterioration in terms of trade, negative diversification, deterioration natural resources.

2. Achieving 4% growth in agriculture require that 4% GDP agriculture is invested in agriculture and private investments grow by 4% per annum.

3. Instability in Indian agriculture declined with the widespread adoption of improved technology.

4.  Widening gap between agri and non agri growth is the primary reason for farmers distress.

5. Self sufficiency in food particularly staple food needs to be strengthened to sustain and improve food security.