Trends in Farm Land Prices in Haryana
It may be observed from the table
Mohinder Kumar
IN a recently published article (EPW, agricultural production and land productivity
September28,1996) Kailas Sarap has drawn in Haryana resulting from the introduction
some interesting conclusions about the of green revolution technology during this
behaviour of farm land prices in Haryana period. As is well known, the new HYV
d u r i n g 1960-91 w h i c h a p p r o x i m a t e l y technology was introduced in the Punjab-
corresponds with the green revolution period. Haryana region in 1965-66, but districts
He has concluded that farm land prices in c o m p r i s i n g the new state of Haryana,
Haryana (1) did not rise during the decade especially the southern Mewat region,
of 1960s; (2) rose only moderately during somewhat remained laggards in adopting the
the 1970s; and (3) started rising again after new agricultural technology compared to the
the mid-1980s. These conclusions he seems Punjab districts. However, such a situation
to have drawn from his graphic presentation did not last long and by the early 1970s the
of f a r m land prices. His c o n c l u s i o n s , integrated package of new high yielding seed
therefore, are merely impressionistic and varieties, chemical fertilisers and mechanical
may not be very reliable. He seems to have technology was being extensively used by
done no systematic statistical analysis of Haryana farmers also. This led to tremendous
the trend, as the results of any such analysis growth in agricultural production and land
are not reported by him in the paper. Only productivity also rose considerably. It is also
a systematic statistical analysis of time well known that increases in land productivity
series data can reveal the nature of trends get capitalised soon into higher farm land
in f a r m land prices in Haryana during values. But, somehow, Sarap does not find
the three sub-periods between 1960 and any increase in farm land pricesduring 1960s
1991. and only a very moderate rise is reported for
Furthermore, Sarap's conclusions about the 1970s.
the behaviour of farm land prices are difficult Whereas economic theory suggests that
to accept in view of the rapid growth of the rising land productivity in Haryana
agriculture must have got capitalised into
higher farm land values, Sarap has not
TABLE I : GROWTH IN FARM L A N D PRICES IN
reported original time series data on farm
HARYANA, 1 9 6 0 - 9 1
(Estimated Growth Model: log Y = a + b Time land prices in his paper. But we were able
Dependent Variable : log farm land price) to regenerate his data after tracing it out from
(Rs per acre) the graph of land prices given by him and
have subjected that data to a systematic
statistical analysis in order to find out the
nature of the trend in farm land prices and
its s h i f t d u r i n g the t h r e e s u b - p e r i o d s
mentioned by him. For this purpose initially
we analysed the trend and estimated the
growth in farm land prices for the entire
1960-91 period with the help of standard
semi-log trend model (log farm land price
= a+bxTime). The results of this statistical
exercise are reported in Table 1 which clearly
Notes:(I) Figures in parentheses are t - values
(2) * Means significant at 1 percent level. show that there was a steady growth in farm
Two tailed test. land prices in Haryana over the 1960-91
TABLE 2 : SEARCH FOR SHIFT IN THE TREND IN FARM L A N D PRICES
(Estimated Growth Model: log Y s a,, + b„ Time + (a,-a1)) D + (bj - b0) D x Time
Dependent Variable: log farm land price)
(Rs per acre)
Note: Figures in parentheses are t-values.
552 Economic and Political Weekly
period.
that the slope coefficient of time variable has
a positive sign and is significant at 1 per cent
level. The per cent per year growth in farm
land prices computed from the estimated
slope coefficient of time is also given in the
table and indicates that farm land prices in
Haryana were rising at the rate of 2.26 per
cent per year over the 32-year period. It may
also be observed that the R-SQR value of
0.64, though fairly high, indicates that there
were considerable fluctuations in farm land
prices around a steadily rising upward trend.
In order to check the results suggested by
the semi-log trend model, we have also used
a non-parametric test for trend. The results
of rank test for trend are also given in Table
1 and they leave little doubt about our earlier
conclusion of a statistically significant
upward trend in farm land prices in Haryana
over the study period. The advantage of this
non-parametric test is that it is not only
distribution free but also no assumptions are
made about the specific form of the upward
trend.
We further tested the breaks in trends
reported by Sarap with the help of intercept
and slope dummies. For this purpose, the
semi-log trend model mentioned earlier was
extended to the form: log farm land price
= ao + b 0 Time + (aj - ao) D + (b ( - b 0 ) D x
Time. Here, D denotes dummy variable that
takes value zero for each year in the base
period, and value one for each of the
subsequent years. Differential intercept
coefficient ( a | - do) and differential slope
coefficient (bj - b 0 ) with their attendant t-
values indicate the nature, size and statistical
significance of a shift in the trend in farm
land p r i c e s in the s u b - p e r i o d s under
consideration. The results of this exercise are
reported in Table 2. It may be seen that in
none of the three equations reported in Table
2 are the differential slope and differential
intercept coefficients significant, clearly
indicating that over the period of 1960 to
1991 farm land prices in Haryana kept
growing at a steady rate and showed no
difference in the trend between the decades
of 1960s, 1970s and post-mid 1980s as
asserted by Sarap.
Our statistical analy si s, therefore, suggests
that farm land prices in Haryana during the
green revolution period rose steadily at the
rate of 2.26 per cent per year without any
shift or break in the trend. This conclusion
also seems theoretically more plausible since
it is in conformity with the proposition that
the enhanced land productivity resulting from
new technology adoption in Haryana was
slowly but surely being capitalised into higher
farm land prices. It is, therefore, clear that
Sarap's impressionistic conclusions about
trend in farm land prices in Haryana are not
valid.
March 15, 1997

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