Book of Extended summaries ISDA

International Conference on Reimagining Rainfed Agro-ecosystems: Challenges &
Opportunities during 22-24, December 2022 at ICAR-CRIDA, Hyderabad
T6-32P-1306
Decomposition of Agricultural Growth by Sources in Andhra Pradesh
G. Samba Siva, C. A. Rama Rao, B. M. K. Raju and N. Swapna
ICAR-Central Research Institute for Dryland Agriculture, Hyderabad 500059
The growth of agricultural sector and the sources of growth in the crop sector in Andhra
Pradesh are identified by following growth accounting approach. Increase in real prices and
technological change accounted for bulk of the output growth in the crop sector where as
diversification and area expansion accounted for smaller fraction of the growth in Andhra
Pradesh. The analysis was done for the period 2005-06 to 2016-17 for the data obtained from
the Department of Agriculture, Cooperation and Farmers’ Welfare, Government of India and
from the publications or web sites of the states of Andhra Pradesh. For decomposing the output
growth, data on area, yield and farm harvest prices were considered for 15 crops in Andhra
Pradesh accounting for more than 75 per cent of gross cropped area. The farm harvest prices
were adjusted for inflation using the GDP deflator.
Sources of growth within crop production sector were identified by the method as given in
Joshi et al. (2006). The change in revenue from the crop production sector was decomposed in
the form of following equation:
∂R ≅ a Y P ∂ A + A (a P ∂Y ) + A (a Y ∂P ) + A (P Y ∂a )
Where A, Y, P and Rare total area, yield, price and revenue and the subscript i denotes the crop
and a i = A i/A i. This equation presents the total change in the revenue from crop sector as a
total of (i) change in the total cropped area, (ii) change in real prices of the crop commodities,
(iii) change in the crop yields or technological change, (iv) changes in the cropping pattern or
diversification. A small fraction of the total change arising out of the interaction among the
four factors is not captured.
Decomposition of growth by source
The results of analysis of sources of growth show that the growth in crop sector was largely
driven by the change in real prices. The change in real farm harvest prices of the crops accounted
for 61.1 per cent change in the total crop revenue in Andhra Pradesh. Yield or Technological
change as reflected in the yield growth also contributed to 34.1 per cent to the total change.
Changes in cropping pattern or diversification accounted for a mere 3 per cent change in Andhra
Pradesh. The contribution of area expansion was found to be negative (3.4 %) indicating the
competition for limited land resources and a small fraction of total change arising out of the
interaction effect (5.1%).
Institutional and policy innovations for accelerated and enhanced impacts
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