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New data, studies explode the myth of Gujarat's agriculture model

By Rajiv Shah 
About four years ago, in 2009, three well-known experts, Ashok Gulati, Tushaar Shah and Ganga Shreedhar, published a paper, “Agriculture performance in Gujarat since 2000: Can it be a divadandi (lighthouse) for other states?”. Well-researched, the paper was prepared for the International Water Management Institute (IWMI) and the International Food Policy Research Institute (IFPRI), both world-renowned institutes. What provided credence to the paper was, Gulati worked as Director in Asia for IFPRI, Tushaar Shah as senior fellow, IWMI, and Ganga Shreedhar as research analyst for the IFPRI. The paper does not seek to hide the fact that it was prepared after taking complete help from the Gujarat government. The authors have jotted down their specially gratefulness to Gujarat CM Narendra Modi’s water resources advisor BN Navlawala, and a well-known pro-Modi agriculturist at that time, ex-vice-chancellor of the Anand Agriculture University, NC Varsheneya, for their valuable “insights”.
The paper did invite some strong criticism from another group of academics, M. Dinesh Kumar, A. Narayanamoorthy, OP Singh, MVK Sivamohan, Manoj Sharma and Nitin Bassi, who belonged to the Institute for Resource Analysis and Policy. They jointly brought out another strongly-argued study in 2010, which was titled, “Gujarat’s Agricultural Growth Story: Exploding Some Myths”. They said that the “agricultural ‘growth’ seen in the recent past in Gujarat is nothing but a good recovery from a major dip in production occurred during the drought years of 1999 and 2000, because of four consecutive years of successful monsoon and bulk water transfer through the Sardar Sarovar project.” Yet, the criticism went somewhat unnoticed. The Gujarat government, as expected, continued to harp on “unprecedented growth” having taken place in Gujarat agriculture, better than any other state, and the basis of the study by Gulati, Shah and Shreedhar.
The paper by Gulati, Shah and Shreedhar pointed towards how, from 2000-01 to 2006-07, Gujarat State Domestic Product (GSDP) for agriculture grew by 9.6 percent per annum, when during the same period the corresponding Gross Domestic Product (GDP) for agriculture at the all-India level grew by only 2.9 percent. “Thus Gujarat has grown more than 1.5 times above its Eleventh Plan growth target, and three times the all India figure”, they declared, wondering, “This stellar performance of Gujarat in agriculture raises the question: Can Gujarat be a divadandi (lighthouse) for other states to follow?” They add, “Other states like Uttar Pradesh, West Bengal and Maharashtra (three of the largest agricultural states) are lagging below the national average, while even Rajasthan and Bihar have raced ahead (but with very high volatility).”
Calling it a “success story” for other states to emulate, the authors further argued that Gujarat’s high volatility or risk rate – calculated as coefficient of variation (CV) – had gone down considerably. CV suggests the ratio of the standard deviation to the mean, and it is a useful statistic for comparing the degree of variation from one data series to another. It allows one to determine how deep volatility or risk is to the economy – or agriculture in the context of the article by Gulati and Shah. A lower CV would mean that agriculture is less prone to risk, and vice versa. Thus, CV during 1980-81, the academics said, was very high, 7.4 per cent. In 1992-93 to 1999-2000, the risk factor went down to 4.3 per cent. And finally, between 2000-01 and 2006-07, it further went down to 2.2 per cent.
The authors argued, whatever volatility that remained was “partly due to Gujarat’s high dependence on rainfall – 64 per cent of the area was rain fed, which was marginally higher than the all-India figure, i.e., 60 per cent. However, during 2000-07, “factors other than just rainfall have caused this shift in the growth trajectory.” They felt that Gujarat agriculture had begun showing much diversification and had become a “predominantly a nonfood crop economy” with oilseed, especially groundnut, tobacco and cotton, dominating. During this period, the share of cotton grew by two-thirds, from 9.4 to 15.6 per cent, and of high value sector, i.e. livestock, fruits/vegetables, increased from 32.6 to 34.9 per cent. This was mainly due to “the increased share of fruits and vegetables from 9.9 to 12.5 per cent”. But they argued that the share of value of total food grains has fallen from 15.8 to 12.9 per cent.
The academics give several reasons for the growth story, including expansion of the Sardar Sarovar project canal network to new parts Gujarat, a large number of check dams, boribunds and khet talavadis especially in in Saurashtra and Kutch regions which are largely dependent on groundwater, promotion of micro-irrigation systems through the Gujarat Green Revolution Company Ltd., which is a special purpose vehicle to expedite the promotion of drip irrigation among farmers, the Jyotigram Scheme which seeks to provide 24 hour power supply to village households and reliable farm power supply for eight hours, and other infrastructure facilities like roads and improvement in technology through Krishi Mahotsavs.
With the latest data for the 11th Five Year Plan (2007-12), the argument put forward by Gulati and Shah stands totally exposed. Put out in “State of Indian Agriculture”, the GSDP for Gujarat agriculture dipped to half – exactly 4.8 per cent per annum – of what it was from the previous period. Worse, it was less than several other states, including Madhya Pradesh (7.6 per cent), Chhattisgarh (7.6 per cent), Rajasthan (7.4 per cent), Jharkhand (6 per cent), Karnataka (5.6 per cent), Andhra Pradesh (4.9 per cent) and Assam (4.9 per cent). Year-wise figures also suggest that volatility in agriculture had set in.
In 2007-08, Gujarat’s agriculture and allied sector grew by 7.48 per cent, but in the next year, 2008-09, it dipped into negative, minus ( — ) 7.41 per cent, and further into negative in 2009-10, minus ( — ) 0.51 per cent. For the two next year, it jumped into plus, and grew by 18.12 per cent and 5.70 per cent for 2010-11and 2011-12 respectively. While latest figures for 2012-13 have not been officially released, it is estimated the growth rate would further slip into a huge negative of more than minus ( — ) 13 per cent. There is reason to believe that volatility had set in despite good rainfall in all these years, with the exception of 2012-13.
The 11th Five Year Plan’s CV (or volatility or risk rate) for Gujarat agriculture, estimated by the Government of India on the basis of the figures provided by the state government is 2.4 per cent, a little higher than what it was in the previous five years. Yet, significantly, the CV or volatility rate of Gujarat is higher than all Indian states except for Maharashtra (8.3 per cent), Himachal Pradesh (16.7 per cent), Uttarakhand (2.9 per cent) and Bihar (2.5 per cent). Kerala’s risk factor for agriculture, calculated as CV, is in the negative, minus ( — ) 2.7 per cent, and all other states’ CV hovers between 1 and 2 per cent. According to the document, “State of Indian Agriculture”, anything higher than two per cent CV is quite risky.
A recent paper “Are Disparities In Indian Agriculture Growing?”, by Gursharan Singh Kainth, Director, Guru Arjan Dev Institute of Development Studies, for the prestigious Skoch Development Foundation’s Thinkers and Writers Forum, has further exposed the “high growth” story of Gujarat. He has found that growth rate in productivity of agriculture, at constant prices of 2004-05, has actually gone down in Gujarat during the two decades. It was 4.7 per cent in 1990-91 to 1999-2000. However, it went down to 3.4 per cent in the next decade, 2000-01 to 2009-10. At least three states – Jharkhand, Chhattisgarh and Madhya Pradesh, Orissa – experienced a higher growth rate. Growth rate per hectare agricultural productivity at constant prices (2004-05), too, went down from 5.07 per cent in 1999-2000 to 2.09 per cent in 2009-10. Further, per capita rural productivity in Gujarat went down from 4.8 per cent during the period between 1990-91 and 1999-2000 to a mere 1.3 per cent in the next decade, between 2000-01 and 2009-10.

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