IFPRI Home>>Publications>>Research Reports

Research Report 109

Agricultural Research and Productivity Growth in India

by Robert E. Evenson, Carl E. Pray, and Mark W. Rosegrant

1999

Abstract
Although the population of India grew by 424 million people between 1963 and 1993, the severe food crises of the early 1960s
have given way to food surpluses in the 1990s. And over the years, India has developed one of the largest agricultural research
systems in the world. Investments in agricultural research and extension accounted for nearly three-fourths of this growth in
productivity. Much of this growth was the result of the new technology that was disseminated throughout India during the Green
Revolution. In recent years, however, the idea that the returns to agricultural research may be declining has received some
currency. At a time when economic liberalization and budget constraints are key concerns, policymakers wonder how much
public investment in agricultural research is appropriate. Are the returns to agricultural research still high in India? Should the
private sector play a larger role in agricultural research?
Agricultural Research and Productivity Growth in India, Research Report 109, by Robert E. Evenson, Carl E. Pray, and Mark
W. Rosegrant, addresses these questions by assessing the effects that public and private investment in agricultural research,
extension, and irrigation have had on the growth of total factor productivity (TFP), which is the growth in total outputs minus the
growth in total inputs. In the growth accounting approach used in this report, detailed accounts of inputs and outputs are
aggregated into input and output indexes, which in turn are used to compute a TFP index.

SOURCES OF PRODUCTIVITY GROWTH

Productivity in India has largely been increased through new technology coming from four sources: Indian public research,
international agricultural research centers, international technology transfers, and private research investment. In the 1960s
Indian agricultural research reached new heights, not only because of the adoption of high-yielding varieties developed for
wheat by the International Center for the Improvement of Maize and Wheat (CIMMYT) in Mexico and for rice by the
International Rice Research Institute (IRRI) in the Philippines, but also because India began to develop its own engine of
research. First, state agricultural universities that emphasized research and extension as well as teaching were formed. Second,
the Indian Council of Agricultural Research (ICAR) was given the authority, manpower, and budget to supervise and coordinate
the work of a broad array of government research institutes and commodity research programs. Third, the new varieties of
wheat and rice were successfully introduced, proving that research could lead to increased food production. This in turn led to
more funding for research. Since the mid-1970s, public re-search by state governments has grown rapidly, equaling ICARs
expenditures in the 1980s (Figure 1).
Funding for private-sector research has also tripled. Recent breakthroughs in agricultural biotechnology have had an important
effect on Indian research, with R&D funds being shifted into biotechnology research. In the mid-1980s, 50 percent of funding
came from the central government, 20 percent from state governments, 16 percent from private companies and cooperatives,
and the rest (14 percent) from foreign donors.
This report finds that gains in agricultural productivity were highest during the early period of the Green Revolution (196676)
and highest in wheat- and rice-producing regions, although productivity increased in every district in India. During the Green
Revolutions mature period (197787), research continued to have a substantial impact on TFP. Expansion of irrigated area
also continued to contribute to productivity growth, thanks to expansion in private tubewells. The variable for modern highyielding varieties (HYVs) mainly picks up the impact of imported internationally developed varieties. The share of growth from
HYVs appears to decline in the mature period primarily because HYVs are in-cluded in the public research expenditure variable
as farmers switch from internationally developed varieties to those developed through Indian research.
HYVs and conventional inputs combined have contributed an average of 2.3 percent a year to the growth of crop production
since 1956. Public research, with support from international agricultural research centers, especially the International Crops
Research Institute for the Semi-Arid Tropics (ICRISAT), CIMMYT, and IRRI, has significantly improved crop research

technology, but the private sector has played a rapidly increasing role (Figure 2).

IMPORTED TECHNOLOGY AND PRIVATE RESEARCH

Although the returns to private research are often thought to accrue only to the private sector, private R&D in the farm
machinery and farm chemical industries has contributed significantly to TFP. Internal rates of return to private research are
more than 30 percent (Figure 2).
Imported technology and private research go hand in hand in India. For example, if research is needed to adapt foreign
technology to local conditions, private research is likely to fill the gap. The private sector usually concentrates on gap
management and processing technologies. Plant breeding generally falls to ICAR and the state universities.
Government policy has generally supported this pattern. After Independence, the government acknowledged that technology
imports were necessary at that time, although it had a strong import substitution policy for goods. In the early 1970s, this policy
changed and many restrictions were placed on imports of foreign technology and on foreign investments. There was also little
incentive provided for private-sector research. Most of the restrictions on imported technology were removed in the early 1990s,
however.

TOTAL FACTOR PRODUCTIVITY

Crop yield data alone do not provide a good measure of economic efficiency because the use of factors other than land
factors such as labor, fertilizer, animal traction, and tractorsare not considered. For example, use of fertilizer can cause a
sharp increase in yields, but it has a cost attached, which is taken into account when TFP is used to measure economic
efficiency. This study uses production data collected annually for 1956/571987/88 in 271 districts of India in 13 states on five
major foodgrainspearl millet, sorghum, maize, rice, and wheatand 14 minor cropsbarley, cotton, groundnuts, gram, other
pulses, potatoes, rapeseed, mustard, sesomum, sugar, tobacco, soybeans, jute, and sunflower. Livestock are not in-cluded. The
factors (inputs) included are irrigated and unirrigated land, human labor, animal labor, tractors (a proxy for all farm machinery),
fertilizer (a proxy for all chemicals), and irrigation capital. Several methods are used to smooth the effects of bad weather years.
The findings of this report indicate that HYVs of wheat, rice, and other crops introduced since the late 1960s have contributed to
significant gains in TFP, but they are not the only source of TFP increases. Before the Green Revolution, extension services
were the largest source of growth in Indian agriculture. A strong system of extension services began to emerge with the
adoption of the Community Development Program in the 1950s and has continued.
In 1977, India, with the help of the World Bank, adopted the training and visitation model of extension. In 1997, more than
95,000 village extension workers took part in this effort. Because this extension system was in place, Indian farmers readily
adopted the new varieties of the Green Revolution, which were initially brought to India by the international agricultural research
centers. Indian public-sector research and extension then took over the job of developing improved domestic varieties, which
continue to deliver high returns to investment.
Infrastructure is another important element in productivity growth. Without infrastructure, farmers in remote locations may be cut
off from inputs such as fertilizer, water, and electricity. Infrastructure includes government irrigation systems, rural electrification,
roads and railroads, and regulated markets. In 1951, only 3,000 villages were electrified; by 1989, 454,000 villages (78
percent) had electricity.

PLANT BREEDING IN INDIA

Modern fertilizer-responsive varieties of wheat and rice were the basis of the Green Revolution in India. In 1992/93, about 70
percent of the area planted with rice, 90 percent of the area planted with wheat, and 50 percent of the area planted with coarse
grains were sown with modern varieties. Many other crops have also been improved, including cash crops such as cotton
(Figure 3). Productivity gains from improved rice continue to rise, but wheat gains have slowed.
Semidwarf varieties of wheat were introduced to India from CIMMYT. Indian researchers tested them to see if they were
suitable for Indian growing conditions and tastes. Most hybrids were developed from crosses of indigenous and foreign stock.
Where water and fertilizer were available, wheat yields increased by 3.6 percent per hectare each year from 1966 to 1987. Like
wheat, semidwarf varieties of rice were introduced in the early 1960s and later crossed with Indian varieties.
For the coarse grainsmaize, sorghum, and pearl milletresults have been somewhat different. CIMMYT provided germplasm
to produce open-pollinated maize varieties that have met with some success but cannot be considered a major breakthrough.
Twenty-five private firms are now working on the problem and finally have developed some superior hybrids of maize. ICRISAT
has improved hybrids of pearl millet. The private sector has also been more successful than the public research institutions or
IARCs in developing sorghum hybrids. Private breeding programs, however, depend heavily on the Indian public sector and
ICRISAT for germplasm.

POLICY IMPLICATIONS

In response to the charge that TFP growth has decreased over time, the report finds that during 197787, the period when the

results in regions that adopted high-yielding varieties early on could be expected to taper off, TFP growth was 50 percent higher
than before the Green Revolution and 17 percent higher than in the early years of the Green Revolution, indicating that gains
are far from over. Moreover, marginal economic rates of return to agricultural research have remained high (Figure 4). Given
these findings it seems that expanding public investment in research and extension would lead to even greater gains.
As Indian research shifts to a greater emphasis on biotechnology, the private sector and foreign suppliers of technology are
assuming larger roles in research than in the past. Policymakers should encourage such investment in agriculture and re-move
the remaining barriers to technology transfer.

 Copyright and Fair Use

TOP of the page