Trends in Growth of Agriculture Sector of the Indian Economy

Growth in the agriculture sector may well be judged by the increase in agricultural production over time. In economic terms, relative changes in prices of different crops also may effect substitution. In the Indian context, rice, wheat, maize, millets and pulses are the major food crops. Oilseeds, sugarcane, cotton, jute & mesta, and potatoes are the major cash crops. Tobacco, chillies, ginger, onion, turmeric, tapioca, sweat potatoes, etc. are minor cash crops. Among plantation crops tea, coffee and rubber are important. We observe that cereals and pulses occupy about 3/4th of the gross area under cultivation. A clear trend in an increase in the percentage area under the cash crops is discernible. Plantation crops occupy a very small percentage (less than 1%) of the total area under crops. Among the food crops, area under wheat has the highest growth rate followed by maize, rice and pulses in that order. The growth rate of area under millets is negative. Among the major cash crops, area under potatoes has grown fastest, followed by oilseeds, sugarcane, cotton and jute in that order. Among the food crops, wheat exhibited the highest growth rate of yield per hectare. Maize followed wheat. These two crops experienced over three fold increase in the yield rate. Rice experienced a little less than three fold increase in the yield rate. Millets and pulses also showed about 30-35 percent increase in the yield rate. Introduction of high yielding varieties in wheat, maize and rice coupled with an improved irrigation facilities led to the said spectacular increase in the yield rates of these crops. Among the major cash crops, cotton, sugarcane and jute exhibited two-fold increase in their yield rates. Minhas-Vaidyanathan decomposition scheme is used with 1991-92 prices (Wi) of major crops for decomposition analysis of agricultural growth. The percentage contribution of change (increase) in yield rate (Y) is the most dominant component of agricultural growth. The percentage contribution of change (increase) in the gross area under cultivation was the second most potent factor of agricultural growth.