Irrigation and India's Crop-Milk Agrarian Economy
A simple recursive model and some early results
Alankrita Goswami, Abhishek Rajan, Shilp Verma and Tushaar Shah
Irrigation is central to India's crop-milk mixed farming system. This explains why over three-quarter of public investments in accelerating agrarian growth are devoted to irrigation. Despite massive investments in irrigation development, there are hardly any systematic assessments of irrigation impact on aggregate output. Our eight-equation recursive model is one such effort that uses district-level data to outline the impact of water applied under different irrigation regimes – canals, groundwater, and others – on crop and dairy output. We find that while India's ₹10 trillion crop-milk economy remains significantly rainfed (45%), groundwater accounts for about 38% of the economy while despite cornering bulk of the public investments, canals contribute less than 10%. Our model also shows that groundwater irrigation is associated with higher area under high value crops and herd-efficiency ratio. Thus, addition of one groundwater structure adds close to ₹215,000 to the gross value of crop-milk output of a district. This Highlight describes the model and, under a set of assumptions, simulates different scenarios.
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