TOTAL FACTOR PRODUCTIVITY AND SUPPLY RESPONSE OF MAJOR CROPS IN ANDHRA PRADESH
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Date
2018
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Acharya N.G. Ranga Agricultural University
Abstract
The Present study entitled “Total factor productivity and supply
response of major crops in Andhra Pradesh” was undertaken to study the
productivity growth and acreage response of rice, maize, groundnut, cotton,
sugarcane, bengalgram and redgram. Since these crops comprised of almost
50-60 per cent of the cultivated lands in the state. For the estimation of the
cropping pattern and growth rates of area, production and yield of the
selected crops, data was collected for the period from 1996-97 to 2015-16.
The required data for this purpose was collected from various published
documents of the Directorate of Economics and Statistics, Government of
Andhra Pradesh. The selected period of study was from 1996-97 to 2014-15
for the estimation of total factor productivity (TFP) in the state. Data
required for this purpose was collected from the published documents of the
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Cost of Cultivation scheme of Government of India and its website. The
required data on the variables chosen as the determinants of TFP in the state
were collected from various Statistical Year Books published by the
Directorate of Economics and Statistics, Government of Andhra Pradesh.
Data Envelopment Analysis (DEA) technique was employed to
calculate and decompose the Malmquist TFP indices of the selected crops.
DEA helped to decompose the TFP index into various efficiency measures.
Multiple regression analysis was carried out by taking the TFP index of
individual crop as dependent variable to determine the factors affecting the
TFP growth in Andhra Pradesh state and ordinary least square adopted from
nerlovian model was used to calculate the supply response for the major
crops.
The cropping pattern in the state was analysed in terms of the
percentage of area under cultivation of the selected crops The gross cropped
area in 1991-92 was 82.48 lakh ha while in 2014-15 it was 76.90 lakh ha.
Rice was the main cultivated crop in the state in the year 1991-92 with a
share of 26.07 per cent of total cultivated area, followed by groundnut
(21.90 per cent), cotton (3.35 per cent), sugarcane (1.54 per cent), redgram
(1.34 per cent), bengalgram (0.41 per cent) and maize (0.31 per cent).
The growth rates of area, production and productivity are assessed in
terms of annual compound growth rates (CAGR). Area under rice declined
at an annual rate of 0.46 per cent, maize grew at a phenomenal annual rate
of 16.39 per cent followed by bengalgram which too registered a very
encouraging growth rate of 11.83 per cent. Cotton recorded a growth rate of
6.40 per cent annually. Redgram was another crop which recorded a
production growth rate of above unity i.e., 1.85. Production of groundnut
declined at an annual rate of 3.61 per cent. Sugarcane one of the important
commercial crop grown in the state was observed to have a negative
production growth rate of 0.96 per cent. Maize recorded the highest growth
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rate of productivity with 4.57 per cent followed by cotton (3.73 per cent),
bengalgram (2.08 per cent), rice (1.66 per cent) and redgram (1.58 per cent).
The growth of all the inputs were in increasing trend except for the
human labour and animal labour of all the selected crops from the base year
to current year. The contribution of all the inputs are higher in all the
selected crops except seed and animal labour inputs that was not impressive
to contribute the huge percents to the total factor productivity growth in the
state.
The results for rice alone the MSP as percentage of cost A2 was 150
per cent during all the years of study, while it was 17 years of study each for
maize and cotton, 14 years for sugarcane, 9 years out of 10 years in respect
of bengalgram, 9 years in the case of redgram. MSP as percentage of cost
C2 was maximum with 140.94 in one only year for rice and 145.82 per cent
for cotton in year.
Area effect was most responsible factor for an increase in production
of sugarcane, groundnut, bengalgram and cotton. Yield effect was most
responsible factor for increasing the production of rice and redgram.
Increase in maize production was mainly due to interaction effect of area
and yield.
The decomposition of the TFPch for the corresponding years into
EFFch and TECHch revealed that the increase in TFPch, which was due to
the improvement in innovation (TECHch) for all the selected crops. The
variables area under high yielding varieties and annual rainfall were
significantly influencing the growth of TFP.
The growth in total output index was higher than the growth in the
total input index for rice, maize, groundnut, cotton and redgram. The total
input index was highest for rice followed by groundnut, maize, bengalgram,
cotton, sugarcane and redgram.
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The estimates of instability in area, production and yield for major
crops revealed that the production (44.29 %) and yield (35.92%) was highly
unstable in the case of groundnut, area (32.63%) and production (41.37%) in
cotton, production (34.39) in bengalgram and production (35.11%) in
redgram was highly unstable. The area, production and yield of remaining
crops i.e., rice, maize, sugarcane showed low instability.
Acreage, production and yield response of crops were estimated and
the results of the study period from 1996-97 to 2015-16 showed that the
regression coefficients of the coefficient of lagged price and rainfall was in
rice, lagged yield in the case of maize, lagged yield and rainfall in ground
nut, rainfall and previous year’s area in cotton, lagged price and lagged area
in sugarcane, lagged price, lagged yield and lagged area in bengalgram
showed positive and significant influence on acreage.
The regression coefficients of the previous year’s, lagged price and
Irrigation in maize, rainfall in groundnut, price and rainfall in cotton,
previous year’s production and irrigation in sugarcane, previous year’s
production and rainfall in bengalgram showed positive and significant
influence on production.
The variables influencing yield were area under irrigation and lagged
yield in rice, total rainfall in maize, total rainfall and lagged yield in
groundnut, area under irrigation and lagged yield in cotton and total rainfall
in bengalgram and redgram.
The short run and long run elasticities of area response obtained from
the regression coefficient of one year lagged prices was found to be less
responsive to price changes of selected crops except for cotton and
bengalgram. The short run and long run elasticities of production response
obtained from the regression coefficient of one year lagged prices was found
to be less responsive to price changes of selected crops except for maize and
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cotton. The short run and long run elasticities of production response
obtained from the regression coefficient of one year lagged prices was found
to be less responsive to price changes of selected crops except for maize and
cotton. The short run and long run elasticities of yield response obtained
from the regression coefficient of one year lagged prices was found to be
less responsive to price changes of all the selected crops.
The coefficient of adjustment for rice, maize, groundnut, cotton and
redgram was quicker for area response. The adjustment was quicker in the
case of cotton and redgram for production response. The adjustment took
less time in the case of sugarcane, bengalgram and redgram for yield
response. The above mentioned crops indicated that the farmers took less
number of years to realize 95 per cent of price effect.
Description
D5751
Keywords
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