doi: 10.17492/manthan.v3i1.

6600

Agricultural Development in the State of Punjab: Rising Issues and Policy

Implications

Gurinder Jit Singh Bhullar* and Harinder Mohan**

ABSTRACT

This paper examines the development of agricultural sector along with the challenges
faced by it in the recent past by assessing secondary data sources pertaining to the
period 1991-2014. The objectives of the study are to address major challenges facing
agricultural sector in the state and give policy recommendations to sustain the agrarian
base in the state of Punjab. The results of the study highlight that agricultural sector in
the state of Punjab has not witnessed any drastic change and remained highly
favourable towards monoculture of wheat and paddy. The results of the study also points
towards the rising challenges to the agricultural sector in the state in the form of poor
diversification, rising cost of cultivation, loss of soil fertility, water table depletion etc.
On the basis of the findings, the study suggests that there is an immediate need to
diversify overall economic base of the state, instead of attempting it only in terms of crop
diversification.

Keywords: Agrarian Crisis, Diversification, Infrastructural Development.

1.0 Introduction

The government of Punjab introduced high yielding varieties of wheat and rice
during the late 1960s, along with an appropriate policy environment and progressive
farming. This made the agricultural sector of Punjab highly mechanised and
commercialised during the green revolution era. Consolidation of land holdings,
development of irrigation facilities, high capital investment, improved infrastructure and
strong institutional reforms provided very conducive environment for success of green
revolution technology in the state of Punjab. (Committee for Formulation of Agriculture
Policy for Punjab State, 2013).
___________________
*Assistant Professor in Economics, Guru Nanak College, Moga, (email id:
gjs_bhullar@yahoo.co.in)
**Assistant Professor in Economics, Guru Nanak College, Moga, (email id:
harindermohan11@gmail.com)
74 MANTHAN: Journal of Commerce and Management, Volume 3, Issue 1

The use of high yielding variety seeds coupled with the technology led strategy
made Punjab’s economy as the food basket of India. Due to the advent of Green
Revolution, 95 per cent of net sown area is under irrigation and 98 per cent under HYV
coverage, which are far above than the other states of the country. The production and
productivity trends of primary crops saw rising trends in the state during 1970s. Besides,
Green Revolution helped extraverted farmer’s income, which further enhance
opportunities in the other sectors of the economy. These rising incomes of peasants’
resulted into the establishment of Small Scale Industries (SSIs) in the state during 1970s.
The agricultural development of the state is one of the success stories and lesson for the
other states of the country (Chand, 1999). Moreover, Green Revolution has made
agricultural sector in Punjab highly commercialised and mechanised. In fact, every third
farming household in Punjab owns a tractor, and a third of the tractors in India are
owned by Punjab farmers (Singh, 2000). However, the impact of Green Revolution was
limited only to the farmers having larger access to big land holdings, which has led to the
rising income inequalities and unemployment among the peasants of Punjab state. The
transformation of agriculture from subsistence to market oriented economy in Punjab
resulted in to the emergence of a new set of problems in the state (Kumar and Grover,
2007). It is now widely observed that the present Punjab is plagued with severe socio-
economic crisis in the form of slowing down of agricultural growth rate, over
exploitation of natural resources, rising debt burden, environmental pollution, farmers’
suicides and many more.

1.1 Objectives of the study

Against the backdrop of current scenario in the state of Punjab, the proposed
paper is an attempt to examine the trends of agricultural growth in the state of Punjab.
More specifically the major objectives of the paper are: i) to analyse the development
and challenges facing by the agricultural sector in the state of Punjab; ii) to provide
policy options to bring the economy of Punjab from the current agrarian crisis.
The results of the study are based on the various secondary data sources
collected from different governmental and non-governmental reports, books, journals,
articles etc. pertaining to different time periods.

2.0 Role and Development of Agricultural sector in the State of Punjab

The present section is devoted to study the current status of the agricultural
sector in the state of Punjab. This section also highlights the rising challenges facing by
the agrarian economy of Punjab.
 Agricultural Development in Punjab: Rising Issues and Policy Implications 75

2.1 Percentage contribution of agricultural sector to total state income in Punjab

Table 1 gives the percentage contribution of agricultural sector to total state
income in Punjab during the period 2004-05 to 2013-14 both at current and constant
(2004-05) prices. The results of the Table 1 reveal that the share of agricultural sector in
terms of both net State Income and gross State Income has shown declining trends
during the studied period. Such trends clearly reflect the declining importance of primary
sector among the peasants of Punjab.

Table 1: Percentage Contribution of Agricultural Sector to total State Income in

Punjab

Year Net State Income Gross State

Income
At Current At Constant At Current At Constant
Prices Prices (2004-05) Prices Prices (2004-05)
2004-05 21.81 21.81 21.19 21.19
2005-06 21.35 20.21 20.61 19.58
2006-07 20.94 18.62 20.31 18.19
2007-08 21.78 17.91 21.05 17.51
2008-09 22.31 17.42 21.49 16.99
2009-10 21.19 16.15 20.58 15.93
2010-11 20.17 15.19 19.70 15.09
2011-12 (R) 19.75 14.54 19.27 14.42
2012-13 (P) 18.85 13.59 18.53 13.64
2013-14 (Q) 18.21 13.05 17.86 13.20
Source: Statistical Abstract of Punjab, various issues.

Table 2 elucidates the growth of area and production of principal crops in the
state of Punjab. It can be seen from Table 2 that both the area and production trends have
remained highly in favour of the monoculture of wheat and paddy in the state. The
growth of area and [production of the other crops such as pulses, oilseeds, sugarcane and
potatoes has witnessed declining trends during the same period.
The importance of monoculture of wheat and paddy in the state of Punjab can
also be assessed from its contribution in the central pool of Punjab. Table 3 brings the
contribution of wheat and rice to the central pool of Punjab. It is seen from Table 3 that
the rice contributes 25.4 percent to the central pool in 2013-14, whereas the respective
share of wheat is noted 43.4 per cent in 2013-14.
76 MANTHAN: Journal of Commerce and Management, Volume 3, Issue 1

Table 2.1: Growth of Area of Principal Crops in Punjab

Year Kharif Cereals Rabi

Sugarcane
Cereals

Potatoes
Oilseeds
Cereals

Cotton
Pulses
Total

Total

Total
Area in

Barley
Wheat
Maize
Jowar

‘000
Bajra
Rice

hectare
1990- 2015 - 12 188 3273 37 5525 143 104 701 101 23
91
2000- 2612 - 6 165 3408 32 6223 54 86 474 121 60
01
2009- 2735 0. 3 139 3522 14 6480 18 62 511 60 74
10 1
2010- 2826 - 3 133 3510 12 6484 20 56 483 70 64
11
2011- 2814 - 3 130 3527 13 6487 20 52 515 80 70
12
2012- 2849 - 3 131 3517 13 6513 20 51 481 82 80
13 (R)
2013- 2851 - 1 130 3512 12 6506 12 48 446 89 87
14 (P)
Source: Statistical Abstract of Punjab, various issues.

Table 2.2: Growth of Production of Principal crops in Punjab

Year Kharif Cereals Rabi Cereals Potatoes

Oilseeds

Sugarca
Cereals

Cotton
Pulses
Total

Total

Total

ne

Prod.
in ‘000
Barley
Wheat
Maize
Jowar

Bajra

metric
Rice

ton
1990- 6506 1 13 333 12159 101 19113 19218 93 1909 601 453
91
2000- 9157 - 5 461 15551 55 25283 25322 88 1199 467 2014
01
2009- 11236 0.1 4 475 15169 47 26931 26947 84 2006 370 1918
10
2010- 10819 - 3 491 16472 44 27829 27846 73 1822 417 1609
11
2011- 10527 - 3 517 17977 51 29075 29085 69 1621 467 1743
12
2012- 11390 - 3 482 16614 50 28539 28551 70 1627 483 2001
13 (R)
2013- 11267 - 1 507 17620 46 29441 29451 64 1495 552 2189
14 (P)
Source: Statistical Abstract of Punjab, various issues.
 Agricultural Development in Punjab: Rising Issues and Policy Implications 77

Table 3: Contribution of Wheat and Rice to Central Pool of Punjab (Lakh Tonne)

Year Rice Wheat

Contribution to % age share to Contribution % age share to
central pool the central to central pool the central pool
pool
1990-91 48.2 41.0 67.5 61.0
2000-01 69.4 33.3 94.2 57.6
2009-10 92.8 28.9 107.3 42.2
2010-11 86.3 25.3 102.1 45.4
2011-12 77.3 22.1 109.6 38.7
2012-13 85.6 25.1 128.3 33.6
2013-14 (P) 81.6 25.4 108.9 43.4
Source: Statistical Abstract of Punjab, Various Issues.

Table 4 indicates that yield per hectare has increased tremendously particularly in case of
rice and wheat. Yield per hectare in case of rice increased from 3229 kgs/hectare in
1990-91 to 3952 kgs/hectare in 2013-14. While in case of wheat, it rose from 3715
kgs/hectare to 5017 kgs/hectare during the same period.

Table 4: Pattern of Average Yield of Principal Crops in Punjab, 1960-61 to 2009-10

(in Kgs/hectare)

Crop 1990- 2000- 2006- 2009- 2010- 2011- 2012-13 2013-

91 01 07 10 11 12 (R) 14
(E)
Wheat 3715 4563 4210 4307 4693 5097 4724 5017
Rice 3229 3506 3868 4010 3828 3741 3998 3952

Maize 1786 2793 3123 3414 3707 3981 3680 3898

Bajra 1107 893 977 1495 900 1050 895 975
Barley 2754 3393 3394 3337 3652 3892 3863 3836
Gram 744 953 1010 1129 1300 1237 1413 1245
Rapeseed 1003 1218 1119 1284 1307 1292 1284 1306
& Mustard
Sugarcane 5941 6425 6083 6172 5952 5835 5888 6197
Cotton (A) 481 437 763 673 646 537 577 572
Cotton (D) 285 408 531 465 472 449 458 451
Groundnut 816 879 865 1240 1825 1716 1739 1850
Source: Statistical Abstract of Punjab, various issues.
78 MANTHAN: Journal of Commerce and Management, Volume 3, Issue 1

Such a significant increase of yield per hectare can be attributed to the intensive
use of chemical fertilizers coupled with irrigation facilities, adoption of new agricultural
practice and use of high yielding variety seeds. Table 5 shows that the consumption of
total chemical fertilizer (NPK) has jumped from 1220 thousand nutrients tones to 1714
thousand nutrients tones between the period 1990-91 to 2013-14.

Table 5: Consumption of Chemical Fertilizers in Punjab, 1970-71 to 2013-14 (in

‘000 Nutrients tone)

Year Nitrogeneous Phosphatic Potassic Total

(N) (P2Q5) (K2O) (NPK)
1990-91 877 328 15 1220
2000-01 1008 282 23 1313
2008-09 1332 379 57 1768
2009-10 1358 434 74 1866
2010-11 1403 435 73 1911
2011-12 1416 448 54 1918
2012-13 1486 462 24 1972
2013-14 (P) 1366 325 23 1714
Source: Statistical Abstract of Punjab, various issues

2.2 Rising challenges to agricultural sector in Punjab

Poor Crop Diversification

Consequent to Green Revolution the agricultural sector in the state of Punjab
experienced process of commercialization and mechanization. However, both area and
production in the state of Punjab has highly remained in favour of wheat-paddy
monoculture which has replaced the production of other important crops like pulses,
oilseeds, potatoes which have high export potential.
Depleting Water Crisis
With the continuation of rice-wheat monoculture rotation by farmers, the ground water
level in the state has decreased drastically over the period of three decades. Table 6
depicts the distribution of blocks in different categories on basis of underground water
resources in Punjab.
High Incidence of Debt on Farmers
Rising water crisis has largely led to the rise in the cost of cultivation which has forced
the peasants to accumulate large amount of credit at an exorbitant rate from the
moneylenders. Despite the significant growth of Regional Rural Banks (RRBs) and
 Agricultural Development in Punjab: Rising Issues and Policy Implications 79

Government financial institutions, farmers in the state continue to depend on

moneylenders for the short term and large terms requirements of agricultural loan.

Table 6: Distribution of blocks in different categories on basis of underground

water resources in Punjab

Year Over-exploited (Dark) Critical Semi critical Safe

Category

2000 73 11 16 38
(52.90) (7.97) (11.59) (27.54)
2005 103 5 4 25
(75.18) (3.65) (2.92) (18.25)
2010 110 3 2 23
(79.71) (2.17) (1.45) (16.67)
Source: Environment Statistics, 2011. www.pbplanning.gov.in.

Loss of Bio-diversity
The high use of chemical fertilizers and pesticides has led to the reduction in genetic
diversity at two levels. At the first level, Green Revolution has led to the emergence of
wheat-paddy monoculture, which has eventually replaced the production of other
important crops in the state like maize, millets, pulses and oil seeds. Secondly, the
introduced wheat and rice varieties came from a very narrow genetic base.
Rising Cost of Cultivation
The declining ground water has major economic implications for Punjab farming. The
fall in the water table necessitates larger amounts of power required to lift the same
amount of power. It has resulted into a steady increase in the expenditure on irrigation
(at 1981-82 prices) from Rs 446 per ha in 1989-90 to Rs 819 per ha in 2004-05.

2.3 Policy measures and strategy

This section studies the major policy options to sustain the economy of Punjab
and to bring it out of the severe economic crisis. The state’s agriculture is entering the
next stage of development which requires high productivity and high value product. The
state of Punjab has numerous advantages in the form of excellent network of rural roads
and connectivity. There is need to harness these advantages to promote high tech and
80 MANTHAN: Journal of Commerce and Management, Volume 3, Issue 1

high value agriculture in the state. Firstly, there is need to address the sustainability
concerns for agriculture sector in the state of Punjab. The state has high potential of
producing vegetables, fruits and milk requirements of northern region of the country.
Development of small scale market oriented family farms for protected cultivation of
vegetables offers a great potential. Commercial dairy farming and improving the milk
yield potential of milch animals can be a significant contributor to agriculture growth.
Secondly, there is high need to diversify the cropping sector in the state of Punjab. Paddy
is a high water requiring crop. For long term sustainability, it is necessary to divert
sizeable area under this crop to other low water requiring crops, and develop high
yielding varieties/hybrids of paddy which are of shorter duration and coincide their
cultivation with monsoon season. Thirdly, Productivity levels in rice and wheat crops
have almost reached a plateau. The main thrust should be on breeding of crop varieties
with better quality, tolerance to biotic and abiotic stresses, high nutritional value and
suitability for processing. Fourthly, western region of the state has poor quality ground
water that is causing problems of soil salinity. Some areas are also having problem of
drainage leading to water logging. It is imperative to reduce ground water use in the
central region by developing and refining water saving technologies in crop production.
Fifthly, there is a need for concerted efforts to improve nutrient use efficiency and
improve soil health through a combination of measures. Sixthly, For effective
management of emerging insect and disease problems, there is a need to generate basic
and applied information for developing sustainable pest management programmes.
Seventhly, Suitable machinery is not available in Punjab for rice transplanting, sugarcane
harvesting, cotton picking and cultivation of vegetable and horticultural crops. Labour
shortage is increasing and farmers are facing problems for timely operations. Such
machinery should be introduced/developed and promoted. Eighthly, quality seed and
planting material is essential for higher productivity. The seed policy for major crops
should aim at achieving coverage of the entire State with the new seeds at an interval of
3-5 years. However, the seeds of hybrids need to be replaced every season.

3.0 Concluding remarks

The present paper examines the development of agricultural sector along with
the challenges faced by it in the recent past by assessing secondary data sources
pertaining to the period 1991-2013. The results of the study highlight that agricultural
sector in the state of Punjab has not witnessed any drastic change and remained highly
favourable towards monoculture of wheat and paddy. The results of the study also points
towards the rising challenges to the agricultural sector in the state in the form of poor
 Agricultural Development in Punjab: Rising Issues and Policy Implications 81

diversification, rising cost of cultivation, loss of soil fertility, water table depletion etc.
On the basis of the findings, the study suggests that there is an immediate need to
diversify overall economic base of the state, instead of attempting it only in terms of
crop diversification.

References

Agriculture Policy for Punjab. (2013). Committee for Formulation of Agriculture Policy
for Punjab State.

Bharti, Vishal. (2011). Indebtedness and Suicides: Field Notes on Agricultural Labourers
of Punjab. Economic and Political Weekly, 46 (14): pp.35-40.

Census of India and Punjab, 1971, 1981, 1991, 2001. Office of the Registrar General,
India, Government of India, Ministry of Home Affairs, New Delhi.
http://www.censusindia.gov.in.

Chand, Ramesh (1999). Emerging Crisis in Punjab Agriculture: Severity and Options for
Future. Economic and Political Weekly, 34 (13), pp.A2-A10.

Economic Survey of Punjab. (2012-13). Economic and Statistical Organistaion,

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Environment Statistics of Punjab, Economic and Statistical Organisation, Punjab,

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Singh, Gopal (1986). Green Revolution, Punjab Economy and Punjab Crisis. in B.S.
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Revolution in India, pp-43.
82 MANTHAN: Journal of Commerce and Management, Volume 3, Issue 1

Singh, Gurdas (2012). Lack of Diversification and Declining Growth Profitability and
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