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Employment Determination in Indian Agriculture: Empirical Analysis
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3. Employment Determination in Indian Agriculture: Empirical Analysis
In the Indian context, the agricultural sector has been important from a policy perspective for several reasons. Even from the point of view of accelerating economic growth, the transition from an agrarian economy to an industrial or modern economy would depend on how well the agricultural sector enables this transition. Recognizing that, the majority of workers are employed in agriculture where labour productivity is low, a faster growth of agriculture is necessary to make employment more remunerative. While no significant increase in the number of workers can be expected in agriculture, a greater use of underemployed and unemployed persons becomes important. Taking into consideration such factors, we proceed to evolve an economic model of employment determination though an econometric estimation. There is a well-established literature on output determination in agriculture in India. The agricultural output in general is considered to be dependent on investment, fertilizer use, irrigation, rainfall and technology from the supply side. Bhatia (1999) emphasized the strong relationship between rural infrastructural development and level of per hectare yield of food grains and also of the value of output from agriculture. Bhattarai and Moorthy (2003) have empirically shown that improvement in irrigation and rural literacy are the two most important factors for agricultural growth in India. Mahendra Dev (2002) showed that there is a greater need for public investment in agriculture, irrigation, credit availability, better marketing of agricultural products, research and development (R&D) along with adequate pricing and other incentives for private investment that would help revive agricultural growth. Dhar and Kallummal (2004) suggested that the share of agriculture in gross capital formation has remained in single digits, which explains the slackening of its growth momentum during the past decade. Gulati and Bathla (2001) observed that private investment is playing an increasing role in agriculture over time while there is a decline in public sector capital formation in the sector. Public sector investment, along with positive terms of trade can have a crowding-in effect on private capital formation. Sachdev and Ghosh (2009) forecasted the agricultural output growth using average capital–output ratio (ACOR). That average ratio is determined through rainfall, high-yielding varieties and a lag value of its own output. Narayan and Ghose (2009) used an error correction methodology to estimate agricultural output growth through gross capital formation in agriculture, price deflators in agricultural output, rainfall, non-agricultural exports and imports, agricultural exports, industrial output and industrial price deflators. Kar and Pradhan (2009) estimated agricultural output determined through capital stock in agriculture, rainfall along with a drought effect dummy and a structural dummy. Bhide and Parida (2009) used the Ordinary Least Squares (OLS) technique to estimate the output of agriculture and allied sectors and further disaggregated them in terms of crop Applied Econometrics and International Development Vol. 16-2 (2016)
134 categories. Gross cropped area is first determined based on the gross irrigated area and rainfall during the monsoon season. The irrigated area crop is related to the gross cropped area crop. Crop yield is estimated as a function of the extent of irrigation in the total area under the crop, price of inputs relative to the expected crop price and rainfall. Misra and Hazell (1996) estimated the agricultural output through gross terms of trade, gross cropped area and area under high yielding varieties. Bhattacharya et al. (2004) used a recursive methodology to determine the agricultural output through supply side factors such as rainfall, gross cropped or net sown area, irrigation, fertilizer consumption, electricity used in agriculture and public investment in agriculture. Bhattacharya and Mukherjee (2004) estimated the agricultural output as a function of fertilizer, rainfall index and electricity consumption in agriculture. There is also some literature which follows the determinants of employment in the agricultural sector. Like Gupta (2002) suggested that improvement in agricultural productivity is necessary to improve the wage of workers and earnings of the self employed requires investment in areas such as irrigation, water conservation, land development, etc. Mahadevan (2003) deduced that productivity growth is necessary to lower the costs of production. In order to promote agricultural productivity growth, training farmers and educating them appropriately to change their mindset and reorienting them to take up new activities or adopt foreign technology is of utmost importance. Ghose (2003) pointed out certain factors that can reduce employment agricultural sector, such as expansion of non-agricultural sector in rural areas, technological and cropping pattern changes that have reduced the demand for labour in agriculture, the pattern of land relations in rural India, increasing landlessness of the rural population, informal credit sources at very high rates of interest may also lead to less employment generation in agriculture. The above literature established a firm link between the various factors mentioned and agricultural output in India. Assuming that output is a reasonably good estimator of employment, we use some of the variables as proxies for determinants of the latter. Download 165.54 Kb. Do'stlaringiz bilan baham: |
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