November 3, 2012

2012: Highlight # 29

Until 1990, Saurashtra and Vidarbha faced similar agrarian stagnation. Today, Saurashtra is buzzing with growth while Vidarbha continues to lag behind. Shah and others explore why...

Agricultural Growth and Rural Dynamism

Why is Saurashtra firing on all cylinders while Vidarbha is limping along?

Tushaar Shah, Yashree Mehta and Vivek Kher

Saurashtra and Vidarbha were pretty much at the same level of agrarian stagnation until 1990, and for similar reasons. Since then, while Vidarbha agriculture continued to stagnate, Saurashtra agriculture broke ranks and began growing, especially after 2000, at accelerated pace. This Highlight explores why.

We argue that, besides a succession of good monsoons, astute and pragmatic governance of Gujarat’s agricultural economy especially during the recent years goes to explain Saurashtra’s high growth performance. In contrast, populist policies, accent on public investment in canal irrigation and ‘special packages’ have failed Vidarbha because these addressed symptoms rather than causes of agrarian stagnation. To give Vidarbha agriculture a shot in the arm, Maharashtra should, among other things: [a] invite, even incentivize, Amul and Mother Dairy to compete for milk procurement, processing and marketing in rural Vidarbha; [b] promote irrigated Bt cotton as an annual crop in place of Bt cotton as a rainfed, kharif crop; [c] rework farm power supply policies to provide rationed but reliable and quality farm power supply; and [d] shift water policy focus from large irrigation projects to decentralized groundwater recharge.

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