Occasional Paper—7 Agricultural Development in Maharashtra Problems and Prospects Ms. S.D. SAWANT B.N. KULKARNI C.V. ACHUTHAN K.J.S . SATYASAI National Bank for Agriculture and Rural Development Mumbai Occasional Paper—7 Agricultural Development in Maharashtra Problems and Prospects Ms. S.D. SAWANT B.N. KULKARNI C.V. ACHUTHAN K.J.S . SATYASAI } \T/ National Bank for Agriculture and Rural Development Mumbai 1999 ( Published by National Bank for Agriculture and Rural Development, Department of Economic Analysis and Research, Jeevan Seva Complex (Annexe), S.V. Road, Santacruz (W), Mumbai - 400 054 and Printed at Karnatak Orion Press, Fort, Mumbai - 400 001. Acknowledgement This occasional paper has been carved out of the research project untertaken by National Bank for Agriculture and Rural Development (NABARD), Mumbai, in collaboration with the Department of Economics, University of Mumbai, Mumbai. In its completion we owe a deep debt of gratitude to officials of NABARD and University of Mumbai who were instrumental in initiating this first collaborative study between NABARD and Department of Economics. We must put on record our special gratitude to Shri N.T. Jadhav and Ms. Sandhya Mhatre of Mumbai University who assisted us sincerely and devotedly and also through excellent management of field work at the village level. We owe a special debt to Shri N.T. Patil (retired Manager, Central Bank of India, Mumbai) who agreed to participate in the project field survey. We are specially indebted to late Prof. M.L. Dantwala for his comments and suggestions on the crucial chapters of the study. We also appreciate valuable support extended by our colleagues from University of Mumbai and NABARD, Mumbai. Finally the usual disclaimer is implied here that the views expressed are those of the authors alone and not necessarily those of the institutions that they are serving. Mumbai Authors January 1999 Authors : Professor Ms. S.D. Sawant and Dr. C.V. Achuthan, Department of Economics, University of Mumbai, Vidyanagari, Mumbai - 400 098. Dr. B.N. Kulkarni, Deputy General Manager and Dr. K.J.S. Satyasai, Asst. General Manager, Department of Economic Analysis and Research, National Bank for Agriculture and Rural Development, Jeevan Seva Complex (Annexe), III Floor, S.V. Road, Santacruz (W), Mumbai - 400 054. CONTENTS Pages Chapter 1 INTRODUCTION 1. Coverage 2. Data Sources for Crop and Other Statistics 3. Plan of the Study Chapter 2 DETAILS OF ANALYSIS AND METHODOLOGY 1. Construction of Rainfall Index 2. Crop Output Growth: Trends and Sources 3. Instability in Crop Output: Trends and Sources 4. Concentration in Output Growth and Input Expansion 5. Association of Output Growth With Technology and non-Technology Variables Chapter 3 AGRICULTURE IN MAHARASHTRA: 12 SELECTED ASPECTS AND SALIENT FEATURES OF GROWTH 1. Agriculture in the Economy of Maharashtra 2. Soil and Water Resources: Inter-regional Disparity 3. Land Use Pattern 4. Some Aspects of Operational Holdings 5. Crop Pattern 6. Trends in Cropping Intensity 7. Average Productivity of Crops: Maharashtra and India 8. Trends in Absorption of Inputs 9. Inter-Division Disparity in Fertiliser Consumption Chapter 4 AGRICULTURAL GROWTH ACROSS 35 CROPS IN MAHARASHTRA: TRENDS AND SOURCES 1. Introduction 2. Aggregate Performance of Agriculture (1967-93) 3. Sources of Growth in Aggregate Production 4. Output Growth for Major Crops/Crop Groups: Trends 5. Sources of Output Growth 6. Output Growth Across Crops: Trends and Sources Chapter 5 ANALYSIS OF CROP OUTPUT GROWTH 50 . FOR DISTRICTS AND ADMINISTRATIVE DIVISIONS 1. Introduction 2. Growth in Gross Value of Output 3. Growth in Cereals Output 4. Growth in Pulses Output 5. Growth in Oilseeds Production 6. Growth in Sugarcane Production 7. Growth in Cotton Production Chapter 6 DECELERATION IN AGGREGATE 68 PRODUCTIVITY GROWTH: A SEARCH FOR EXPLANATION 1. Introduction 2. Investment in Agriculture 3. Role of Weather 4. Role of Irrigation 5. Role of Seed-fertiliser Technology Development 6. Deceleration in Yield Growth for Sugarcane Annexure 6.1 Impact of Rainfall, Irrigation and HYV Area on Yield Per Hectare of Cereals: Regression Analysis Chapter 7 INSTABILITY IN CROP PRODUCTION IN 93 MAHARASHTRA: ANALYSIS OF SOURCES AND INTERTEMPORAL TRENDS 1. Introduction 2. Sources of Output Instability in Agriculture 3. State Level Output Instability for Major Crops and Crop Groups: 1967-80 4. Analysis of Output Instability: 1980-93 5. Sources of Output Instability: 1967-80 6. Sources of Output Instability: 1980-93 7. Trends in Instability 8. Instability in Crop Production: Disaggregate VI Level Analysis Why Absence of Significant Rise in Output Instability for All Crops and Cereals? Annexure 7.1 Districtwise Shares in Production of Major Crops and Crop Groups: Maharashtra Annexure 7.2 Divisionwise Shares in Incremental of Production of Major Crops and Crop Groups: Maharashtra Chapter 8 OUTPUT GROWTH AND INPUT 115 EXPANSION: INTER-DISTRICT DISPARITY 1. Introduction 2. Analysis of Incremental Output in 1970's and 1980's 3. Concentration in Output Growth 4. Inter-decadal Movement of Districts 5. Inequality in the Input Use and Output Growth Annexure 8.1 Districtwise Shares in Averages Incremental Production Chapter 9 AGRICULTURAL PRODUCTIVITY GROWTH: 131 ROLE OF TECHNOLOGY 1. Introduction 2. Productivity Growth: State Level Analysis 3. Productivity Growth: District Level Analysis 4. Case Studies of Selected Districts 5. Comparison of Akola and Kolhapur Districts and its Policy Implications Annexure 9.1 Dry Farming Technology Strategy in Akola Chapter 10 : CONCLUSIONS AND IMPLICATIONS 157 1. Conclusions 2. Implications VII REFERENCES 171 APPENDICS A.1 Specifications of Districts and Divisions 173 Covered A.2 Crop and Crop Groups Included in the State Level Analysis A.3 Crops Included in Gross Value of Output and Their Prices VIII CHAPTER 1 INTRODUCTION Maharashtra is one of the most industrialised and urbanised states In India. Paradoxically, however, it also enjoys the dubious distinction of a state having highest rural-urban disparity in standard of living of its population.^ The share of agriculture in the net state domestic product of Maharashtra declined steeply from 36% in 1961-62 to 18.7% in 1992-93. The comparable shares for Indian agriculture were 47% and 27%. Yet, in terms of the proportion of labour force engaged in agriculture which was 60% in 1991, Maharashtra's economy continues to be predominantly agrarian. Indeed, the share of State's rural labour force employed in agriculture (main workers only) was as high as 83 per cent even in 1991, nearly half of the agricultural workers being labourers. Thus, the crucial dependence of its rural labour force on agriculture is quite evident and is unlikely to diminish drastically in the near future. It is against this scenario, that importance of accelerated growth in Maharashtra's agriculture must be judged. Apart from the direct impact of agricultural growth on generation of rural employment and incomes its significant secondary linkages with the development of rural non-farm sectors are more crucial. Trade in agriculture's outputs and inputs and services required by it and processing of its products open up additional and more significant avenues for labour absorption. Maharashtra being an important producer of cotton, sugarcane, groundnut and quiet a few horticultural crops, such secondary linkages of agriculture assume added importance to its rural economy, more so now, in the context of new liberalised trade environment for farm products. That is why, careful assessment of agriculture's past performance and based on it, future prospects of growth is needed. The present study undertakes this exercise, focussing on the comparison between the early phase i.e., the years from 1967-68 to 1979-80, vis-a-vis the latter phase i.e., 1980-81 to 1992-93 of the post green revolution period. More specifically, our objectives are :- (i) To examine trends in and sources of growth in production of major crops and crop groups and changes in them over the two phases of the period under study both at the state and the district level. (ii) To investigate possible causes responsible for differential performance in growth in the two phases and thereby identify the constraints on 1 future growth. (iii) To study the degree of and trends in instability in crop output, analyse the sources of instability and identify the factors associated with changes in degree of instability over the two phases of the study period. (iv) To analyse the inter-district disparity in output growth and input concentration and further to examine inter-relationship between the output and input concentration for the two phases. (v) To identify technology and non-technology variables having significant association with productivity growth in agriculture in the two phases of the entire period with the help of regression analysis and comparison of the characteristics of selected districts with distinctly differential inter­ temporal patterns of growth performance. (vi) Finally, to comment on the prospects of growth and emerging constraints on growth in Maharashtra's crop sector. 1. Coverage Periods : The analysis undertaken in the present study has been restricted to the post green revolution period (henceforth GR period or the period under study) only, covering the years from 1967-68 to 1992-93 at the state level and from 1967-68 to 1990-91 at the district level. The entire period has been bifurcated into two periods or the two phases, to be referred to as the early and the latter phase/period or periods I and II. Period I covers the years from 1967-68 to 1979-80 and period II from 1980-81 to either 1992-93 or 1990-91. Bifurcation of the period at 1980-81 coincides with the optimal point of break in the time trend for Indian agriculture.^ As 1971-72, 1972-73, 1986-87 and 1991-92 were the worst drought years in Maharashtra state the alternative analysis have been attempted mainly at the state level by omitting these four years from the state series and the first three years from the district level series for output instability analysis.