Growth of production, Microeconomics


The performance of Indian agriculture during more than half a century of planned economic development can be broadly characterised by three distinct phases. In the first phase covering a  period from independence to the mid 1960's, generally known as the pre-green revolution phase, priority was accorded to land reforms, community development and restructuring of rural credit institutions besides providing a major thrust to irrigation infrastructure. There were some major achievements in these spheres. The country was, however, still subsisting from ship to month. Growth of the output of foodgrains was far from adequate to meet the needs of growing population. India's food security was in jeopardy. At the same time, experience of other countries in the sphere of agriculture demonstrated the need to achieve a quantum jump in the productivity of land.  

The second phase was initiated by a new agricultural strategy or so called green revolution. The strategy consisted of applying a package of inputs to irrigated areas. The package constituted high yielding variety of seeds, chemical fertilisers, pesticides and insecticides besides application of water at the right time and in right proportions. In the initial period of about 15 years, the green revolution was confined to irrigated areas largely in wheat growing regions. It was only during the 1980's that the green revolution spread to other regions and crops. Over 1970's and 1980's, there was a significant rise in yields per hectare resulting also in the productivity of all inputs or Total Factor Productivity. As a result of rise in per capita incomes, there was a discernible diversification in the demand of the consumers to other food production like milk, poultry meat, fish, vegetables and fruits. This has created an environment for diversification of agriculture. 

The third phase coincides with the period following the implementation of new economic policy of the year 1991 and  thereafter. In this phase, greater incentives were provided to private investment in agriculture. Even though such investment did increase to an extent, there was a steady decline in public investment in agriculture. This has adversely affected the rural infrastructure, particularly irrigation, agricultural research and extension. The acceleration experienced in the yield per hectare during the second phase got arrested. There has been a noticeable slowdown in agricultural growth on account of declining input use, factor productivity and profitability during this phase. 

Posted Date: 11/10/2012 6:13:25 AM | Location : United States

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