Annual Report

Abstract

The National Centre for Agricultural Economics and Policy Research (NCAP) was established by Indian Council of Agricultural Research (ICAR) in March 1991. The Centre is located at the campus of the Indian Agricultural Statistics Research Institute (IASRI), a sister institute of ICAR and is adjacent to the Indian Agricultural Research Institute (lARI), a premier research institute in the country. The Centre has at present twenty scientists, and sixteen other staff. It had a total budget of Rs. 119.75 lakhs for the year 1998-99. The Centre is guided in its policies by a high-level Research Advisory Committee (RAC) comprising mostly of eminent professionals outside the system. Dr. S.S. Johl is the current Chairman. The Centre also has a Management Committee (MC). A number of internal committees, such as Staff Research Council, Budget and Policy Committee, Official Language Committee, Consultancy Processing Cell, Grievance Cell, Women Cell, Institute Joint Council etc. have been constituted for decentralised management. Research programmes are underway in each major thrust area viz. technology policy; sustainability of agriculture; supply demand and markets; institutional change; and agricultural growth and adjustment. This section summarises the salient findings of completed studies. A study was undertaken to estimate the contribution of technical change to the growth of livestock output in the country. Aggregate indices of livestock output and inputs were constructed. TFP growth was computed as the difference between output and input growth rates. The study revealed that the livestock sectoral output grew at 2.59 percent per annum over 1950-51 to 1995-96. The input index increased by 1.79 percent per annum and TFP grew at about 0.8 percent. There was no TFP growth in the first period (1950-51 to 1970-71) suggesting no technical change. The real upswing started in the eighties when sectoral output growth touched nearly 4 percent per annum and TFP growth jumped to nearly 1.8percent (Table 1), contributing about 45 percent to total output growth. Backed by an improved market and institutional environment, investments in livestock research have begun to pay off. To identify what would drive the future growth in livestock production, another study was undertaken with Karnataka's livestock sector as a case. About two third of the growth in cattle milk production and half of the growth in buffalo milk production is accounted for by productivity and this contribution has been rising over time. Rapid shift in herd structure in favour of high milk yielding species and improved feed fodder supplies and animal health services would facilitate future growth. Meat production increased at an annual rate of more than 9 percent. However, growth in meat output of almost all the species is on account of increase in slaughter rates. Growth in egg production is also largely due to increase in population of layers. Future growth in egg production would come from a shift in layer population in favour of improved layer and intensive system of poultry production. A study was undertaken to examine the level and pattern of energy use and its efficiency in soybean based cropping system of Madhya Pradesh using farm level data. Soybean and wheat are the two most important crops in the soybean belt. Wheat is the most energy intensive crop (13980 mega joules per ha). Chickpea, which competes with wheat, requires about half of the energy used in wheat cultivation. Commercial sources of energy account for more than 90 percent of the energy used in cultivation of these crops. Soybean, the Kharif season crop grown largely under rained conditions consumes 7142.5 mega joules per ha of which about 77 percent comes from commercial sources. Maize, sorghum and blackgram compete with soybean and require one-third of the energy used in soybean cultivation. These crops largely derive their energy requirements from non-commercial sources. The findings indicated that technologies such as integrated nutrient management, integrated pest management, etc. should be scaled up as to conserve commercial non-renewable energy whilst maintaining profitability of agriculture. An inter-institutional collaborative research project on the economics of sorghum utilization in seven districts from the states of Maharashtra, Karnataka and Andhra Pradesh indicated that sorghum forms the main staple, constituting more, than half of the total cereal consumption in majority of sample districts. In rabi districts, sorghum consumption formed 55% of the total cereal consumption, followed by wheat (20%) and bajra (12%). In the kharif districts, consumption of sorghum formed 58% of total cereal consumption, followed by wheat (30%) and rice (11%). Sorghum is not the most important staple diet in Mahabubnagar. Here the consumption of rice accounts for half of the total cereal consumption thereby relegating sorghum to second position. Rice-wheat based cropping system which covers about 10 million ha in the Indo-Gangetic plain of India is now showing multiple problems. To confirm these issues, a study was conducted to estimate the total factor productivity of rice-wheat based cropping systems, and examine the role of legumes in improving the sustainability of soil and water resources. The study used the secondary data from states, namely Bihar, Haryana, Punjab, Uttar Pradesh and West Bengal from 1976 to 1992. Results indicated that the annual growth in TFP which was about 3% during 1978-85period reduced to (-) 0.4% during 1985-92 period in the Indo-Gangetic plain of India. In the later period the growth rate in output was completely contributed by higher levels of inputs. Further, analyses indicated that the effect of legume area on TFP was positive and highly significant. The results clearly suggested that legumes are critical for the growth in productivity and for sustainability of the rice-wheat based cropping system. Irrigation development in the past was not specifically targeted towards desired multiple impacts. Equity impacts of irrigation water distribution in India is empirically analysed at national level covering different decades. Results of this study showed that major source for reducing the inequality in the distribution - of irrigation facilities lies within the state level distribution of irrigation services across farm sizes rather than from balanced irrigation development across states. Increasing role of states in promoting the equity impacts of irrigation expansion across farm sizes is emphasised. Comprehensive modelling of irrigation systems is a pre-requisite to conduct ex-ante evaluation of policy intervention options for promoting equity in the sharing of irrigation benefits across farm sizes. An empirical analysis for supply responsiveness in India's rainfed agriculture reveals that return from a crop relative to other crops plays significant role in affecting supply in the case of all the crops. Since, arithmetically, profitability depends as much on prices as on yield, the role of productivity in boosting output needs to be properly appreciated. In subsistence agriculture the impact of productivity improvement may be stronger than the prices because productivity change influences expectations in a more visible manner while price changes are only perceived vaguely. The results of the study show that relative crop returns are a strong motivation for the farmers in rainfed region to increase supply by increasing area or yield or both. A study on review of trade policies shows clear positive impact on export of non-basmati rice, marine products and oilmeal. There were some relaxations like abolition of minimum export price, decanalisation, removal of bans and quotas for these commodities, particularly rice, which have contributed to the emergence of non-basmati rice as an important export item. Total agricultural exports were around $3000 million at the beginning of economic reforms period. In a short span of 3-4 years the export earnings became more-than double. This is a clear indication that the indirect effect of trade liberalisation, exchange rate adjustments and effects of relaxation in government controls and restrictions on agricultural exports is positive and significant. Among all agricultural commodities, oilseeds comprise the largest share in imports in most of the years during the last decade. This is happening despite a spurt in edible oilseed output in the recent years. Nearly half of the agricultural imports consist of fertilizer imports in most of the years. For the success of external liberalization, internal liberalization is said to be essential. External liberalization may not produce full impact if domestic reforms by way of removal of excessive and unnecessary government controls are not undertaken. In another study, a comprehensive data series has been constructed for the country and states which include investments made in irrigation, rural roads, rural electrification, storage, marketing, agricultural research and education, . land development, cooperation, etc. This series will be useful for further research on growth and development of Indian agriculture. The data show a. consistent decline since mid seventies in all states. This does not auger welt for future growth and this study points to the need for a critical reappraisal of public expenditure and investments to address this distortion. Two Policy Papers and two Policy Briefs, three workshop proceedings and three PME notes have been published during the year 1998-99. Centre staff have also been involved in a number of professional and policy-level interactions. Other significant achievements during the year under report include finalisation and approval of Ninth Five Year proposals, approval and initiation of activities proposed under NATP, rigorous and intensive dialogue and training in research prioritisation and diagnostic surveys, planning for a network of agricultural economists, renovation of office building, and strengthening of LAN at the Centre