Trends in the growth of production and productivity, Microeconomics

Trends in the Growth of Production and  Productivity:

From an analysis of the trends of growth of production and productivity of agricultural sector as a whole and of different crops in the preceding section, it can be safely concluded that: 

1) Growth rate of agricultural  production picked up immediately after independence but largely due to allocation of more area under cultivation. This was, however, not enough, as the country was becoming increasingly dependent on food imports. Moreover, the increase in production through increase in area under cultivation has its obvious limitations. 

2) The new agricultural strategy of water, seed and fertiliser technology brought about a change in the rate of growth of production through an increase in productivity. This was a welcome change not only for the farmer whose income could rise from his existing holding but also for the economy where growth in agricultural production could facilitate higher rate of economic growth. 

3) The growth rate of production of the agricultural sector rose to around 3.4 per cent per annum during the decade of 1980's and was higher than the rate of growth in production of 2.5 per cent per annum during the earlier decade. Increase in yield was the major contributor to the growth rates in agricultural production.  

4) Similar trends were witnessed in  the rates of growth of production and productivity of foodgrains. The growth rates witnessed in the decade of 1980's were distinctly higher than those in the earlier decades. 

5) In respect of foodgrains, the gains  of technological change were largely confined to Rice and Wheat. Other Coarse Cereals and pulses lagged behind. 

6) For the period up to 1980's, the growth in production and productivity in non-foodgrain sector is only marginally higher than for the entire sector. However, since the decade of 1980's the non-foodgrain sector has grown at a rate which is distinctly higher than the growth of the sector as a whole. 

7) There are clear symptoms of the agricultural sector showing symptoms of retrogression in growth of production and productivity of agricultural sector as a whole and foodgrains as well. The sluggishness in the rates of growth of production and a significant decline in rate of growth of yield per hectare call for a major overhaul of agricultural policy framework.

Posted Date: 11/10/2012 6:16:27 AM | Location : United States

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