Technical Change and Efficiency of Rice Production in India: A Malmquist Total Factor Productivity Approach

This paper has studied the trends in the total factor productivity (TFP) growth of rice in India for the period 1980-81 to 2009-10 and has decomposed the TFP growth into its constituent components, viz. change in technical progress and technical efficiency. The study has used Malmquist Productivity Index approach through data envelopment analysis to estimate the TFP. The analysis has also been carried out for two sub-periods, viz. 1980-81 to 1994-95 (period I) and 1995-96 to 2009-10 (period II) as well. For the overall period, the TFP change has been at a moderate rate of 0.2 per cent per year, with large interstate variations. The positive TFP growth has been associated with a mean technical progress of 0.3 per cent and a deterioration of the mean technical efficiency by -0.1 per cent per year. Across the states, Andhra Pradesh, Punjab, Tamil Nadu and Uttar Pradesh have exhibited positive TFP growths during the overall period. The revival of the mean TFP to the level of 1.8 per cent per year during period II has mainly been effected by the positive technical change during this period. However, a matter of concern is the decline in technical efficiency. It is also observed that over the years the less-progressive states with respect to TFP growth during the period-I have caught up with the progressive states, mainly propelled by high rate of technical progress. The study has identified that during period-II the share of current and capital inputs in total cost of cultivation has reduced and input intensification has slowed down. The results have revealed that the recent yield stagnation in rice is not due to technology fatigue, but could be due to the sluggish input intensification. The study calls for policy initiatives for strengthening investments on research and extension for furthering the TFP growth and steps for sustainable input intensification.