Getting Punjab Agriculture Back on High Growth Path: Sources, Drivers and Policy Lessons
Gulati, Ashok; Roy, Ranjana; Hussain, Siraj | July 2017
Punjab has been a star performer in agriculture during heydays of the Green Revolution. Agriculture in Punjab grew at a high growth rate of 5.7 per cent during 1971-72 to 1985-86, which was more than double the all-India growth rate (2.31 per cent) during this period. It was this spectacular performance of Punjab, first witnessed in large wheat surpluses followed by steep rise in production of rice, which helped India free itself from the PL 480 food aid and its associated political strings. Punjab played a crucial role in achieving the much needed food security for India. However, the state slipped soon after and grew at a lower rate of about 3 per cent between 1986-87 and 2004-05, equivalent to the all-India agricultural growth rate. The situation has deteriorated further as Punjab’s agriculture GDP grew at only 1.61 per cent per annum, which is less than half the all-India average growth rate of 3.5 per cent in the period between 2005-06 and 2014-15. It is intriguing what led to the sharp deceleration of agriculture growth in Punjab and what sort of policy intervention is required to put it back on a high growth path. The landslide victory of the Congress Party in the state assembly election offers hope to change the fate of Punjab’s agriculture. In this paper, we study the composition, sources and drivers of agricultural growth that had contributed to the high growth of agriculture in Punjab until 1985-86. The study finds that among the many steps taken by the state, three interventions played the most important role in the state’s impressive performance in agriculture. They are irrigation facilities, all-weather roads to provide rural connectivity and assured market for agricultural produce. But, the state has already achieved the best position in technology and infrastructure development and there is no real scope left to expand these areas. The future of Punjab’s agricultural prosperity lies in the high-value sectors of agriculture. The study makes three sets of recommendations to stimulate agricultural growth in Punjab, viz., (1) encouraging diversification from common rice in the kharif season by moving on to maize for poultry feed, silage and starch industries, promoting fruits and vegetables to at least 10 percent of GCA including their protected cultivation through drips, etc. with an eye on export markets of the Gulf countries; (2) encouraging processing industries by liberalising land lease markets, developing contract farming, rationalising tax structure on raw commodities, especially wheat and rice and revisiting tax rates approved by GST council for processed food under new GST regime; (3) promoting sustainable agriculture by shifting to DBT with respect to power and fertiliser subsidy so that inefficiencies in the use of power and fertilisers can be minimised as also propagating micro irrigation techniques and encouraging the use of solar power for powering irrigation pumps, and generating solar power as the third crop.
CitationGulati, Ashok; Roy, Ranjana; Hussain, Siraj. 2017. Getting Punjab Agriculture Back on High Growth Path: Sources, Drivers and Policy Lessons. © Indian Council for Research on International Economic Relations. http://hdl.handle.net/11540/7538.
Access to markets
Food Security And Trade
Regional Trade Agreements
Land capability for agriculture
Rural land use
Farm supply industry
Adaptive natural resource management
Intergrated rural development
Cost and standard of living
Perishable goodsShow allCollapse