Gujarat Growth of Agriculture

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Is agriculture in Gujarat on a different growth trajectory?
“Agriculture is the locomotive of our economy and a prosperous rural economy based on agriculture will ultimately make the nation prosperous” Sardar Vallabhbhai Patel

Gujarat has consistently attracted a substantial slice of India’s private investment, primarily in its industrial sector. This has resulted in the state accounting for about 16 percent of industrial production of India. Almost 50 percent of the country’s refined petroleum products and 45 percent of the drugs and pharmaceuticals are also accounted by the state. The state’s exports stood at 14 percent of India’s total exports, exhibiting a strong global orientation of its products. Thus, the state is often pitched as the growth engine of the country. But, how has agriculture fared as a component of this great growth story? Well, till the recent past, it had not received the attention of researchers, policy makers and writers. However, in the recent past, a spate of articles on the subject area stating the buoyancy of the agriculture sector since the year 2000, has hustled away the attention to this less researched subject. These reports suggest that agriculture sector in the state has recorded towering growth rates, virtually unchallenged by the rest of the country. Between the period 2000-01 and 2007-08, agriculture grew by a phenomenal 9.6% per year in Gujarat, despite predominantly being arid / semi-arid. The reasons for this phenomenal agriculture growth recorded by IFPRI & IWMI1 in its report are many viz; technology supported agriculture, state initiated water conservation measures, farm extension measures etc. There are many other arguments put forward by other writers and thinkers on the subject viz; Gujarat agriculture and its cropping is less traditional and more commercial in nature, and Gujarat farmers are more commercially vigilant and have a better appreciation of the options and the prospects in the longer term. Yet others observe that the growth in agriculture is powered by dairy sector and its cooperatives for which the state is very profoundly known. There are also views opined that the state was the first to amend the laws governing the marketing of agricultural produce and it also opened up contract farming, thus bringing into direct play the private buyers. There are many who suggest that the state has been fortunate and is supported by factors such as good monsoon for most of the decade, increasing minimum support prices from the Centre and the spread of Bt cotton, a lucrative cash crop. But some of these benefits listed were available to other parts of the country as well and no other state could record these rates of growth consistently2. A few critics also argue that the data sourced is not reliable and yet some experts have even questioned the approach to the analysis by IFPRI3. Gulati et al (2009): Agriculture performance in Gujarat since 2000- can it be a divadandi (lighthouse) for other statesan IFPRI, Washington & IWMI, Colombo, publication 2 Ref: http://www.moneycontrol.com/news/economy/how-did-gujarat-becomefarming-paradise_447382-2.html 3 As the reference points ie; start and end years of the analysis have been abnormally bad or very good respectively making the sample biased for a fair analysis. 1

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Electronic copy available at: http://ssrn.com/abstract=2080876

Before getting into facts and figures, it’s important to appreciate the context of this setting; the state’s agriculture is predominantly rainfed with a cropping intensity of 115 %. 60 % of its 226 development blocks are classified as droughtprone and 9 blocks are affected by desertification. Given these facts how has the state consistently clocked such massive growth rates? This paper attempts to decipher some of these issues. The paper is divided into two parts. The first part looks at the review of the agriculture sector, its sub-sectoral growth, looking at the facts and figures while the later...
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