Factors Determining Private Agricultural Investment: A Comparative Case Study of Two States of India

Surendra Meher *

Department of Economics, Ambedkar School of Social Sciences (ASSS), Babasaheb Bhimrao Ambedkar University (BBAU, A Central University), Lucknow, Uttar Pradesh-226025, India.

*Author to whom correspondence should be addressed.


Abstract

The study endeavours to examine the pattern and determinants of agricultural investment in two states of India viz., Haryana and Odisha. The existing literature points out that public investment in agriculture is one among the strongest determinants of private investment and output in agriculture. Accordingly, emphasis has been laid to accelerate the rate of public investment. The present study using primary data in two diverse regions of India is an attempt in that direction. Data from 150 households from both states have been collected using proportionate stratified random sampling method. The study finds that private farm investment as well as output are relatively lower in Odisha, being an agriculturally lagged region. It is further seen that private investment in agriculture has been significantly influenced by canal irrigation, institutional credit, and land size in Odisha. While in Haryana, farmer’s education, land size and institutional credit positively and significantly affected private farm investment. Capital use in agriculture turned out to be positive and significant variables influencing agricultural productivity in both regions. The study thus recommends to ensure public policies on the aspects of irrigation infrastructure, research and extension, improvement rural infrastructure etc. in stimulating private investment and agricultural output. Public investment in agriculture on these components would bridge inter-regional inequalities and ensure inclusiveness as it promotes employment opportunities and sustainable growth in agriculture. In the context of Odisha, being a poorer state, these policies could serve as important tools of poverty alleviation.

Keywords: Private investment, public investment, agriculture, productivity, inducement impact


How to Cite

Meher, S. (2024). Factors Determining Private Agricultural Investment: A Comparative Case Study of Two States of India. South Asian Journal of Social Studies and Economics, 21(6), 15–25. https://doi.org/10.9734/sajsse/2024/v21i6827

Downloads

Download data is not yet available.

References

Binswanger Hans P, Mkhize. The stunted structural transformation of the Indian economy: Agriculture, manufacturing and the rural non-farm sector, economic and political weekly. 2013;XLVII(26 and 27):5-13.

Chand Ramesh, Raju SS, Pandey LM. Growth crisis in agriculture: Severity and options at national and state levels, economic and political weekly. 2007;2007:2528-2533.

Bhalla GS, Singh Gurmail. Economic liberalisation and Indian agriculture: A statewise analysis. Economic and Political Weekly; 2009.

Government of India. Planning Commission; 2013.

Kumar Vinod. Five Decades of India’s Agricultural Growth Across Crops: Emerging Trends and Patterns, Working Paper 2022-1, National Bank for Agriculture and Rural Development, Department of Economic Analysis and Research, Mumbai, India; 2022.

Chand Ramesh. Presidential Address, Transforming Agriculture for Challenges of 21st Century, 102 Annual Conference Indian Economic Association (IEA) 27-29; 2019.

Sharma HR. Patterns, sources and determinants of agricultural growth in India. Indian Journal of Agricultural Economics. 2023;78(1):26-70.

Mallick SK. Capital formation in Indian agriculture: recent trends. Indian Journal of Agricultural Economics. 1993;48(4):667-677.

Rao CH. Hanumanta. "Agricultural growth, rural poverty and environmental degradations in India. Oxford University Press, Delhi; 1994.

Dhawan BD. "Relationship between public and private investment, with special reference to public canal. Indian Journal Agricultural Economics. 1996;51(1&2).

Gandhi VP. Investment behaviour in Indian agriculture. Indian Journal of Agricultural Economics. 1996;51(4):543-559.

Rath, Nilakanth. Agricultural growth and investment in India. Journal of Indian School of Political Economy. 1989;1(1).

Shetty SL. Investment in agriculture, a brief review of recent trends, economic and political weekly; 1990.

Gulati Ashok, Seema Bathla. Capital Formation in Indian Agriculture, Revisiting the Debate, Economic and Political Weekly. 2001;1697-1708.

Chand, Ramesh and Kumar, Parmod. Determinants of Capital Formation and Agriculture Growth, Some new exploration. Economic and Political Weekly. 2004;5611-5616.

Kumar Anjani, Seema Bathla and SmritiVerma. Revisiting the Relationship between Public and Private Capital Formation in Indian Agriculture: A Disaggregated Analysis, Economic and Political Weekly. 2023;58(32).

Akber Nusrat and Kirti Ranjan Paltasnigh. Is public investment complementary to private investment in Indian agriculture? Evidence from NARDL approach, Agricultural Economics (The Journal of the International Association of Agricultural Economists). 2019;50(5):643-655.

Binswanger, P Hans, Shahidur R, Khandker, Mark R. Rosenzweig. How infrastructure and financial institutions affect agricultural output and investment in India. Journal of Development Economics. 1993;41(2):337-366.

Fan Shenggen, Hazell Peter and Thorat, Sukhadeo. Linkages between government spending, growth and poverty in rural India. International Food Policy Research Institute, Washington D.C., Research Report No. 110; 1999.

Fan Shenggen, Zhang Linxiu and Zhang Xiaobo. Growth, Inequality and Poverty in Rural China- The Role of Public Investment. International Food Policy Research Institute, Washington D.C., Research Report No. 125; 2002.

Roy BC, Pal, Suresh. Investment, Agricultural Productivity and Rural Poverty in India, Indian Journal of Agricultural Economics. 2002;57(4).

Kumar Ranjit, Singh NP, Singh RP, Vasisht AK. Rural Infrastructure and Agricultural Growth: Interdepencence and variability in Indo-Gangetic Plains of India, Indian Journal of Agricultural Economics. 2006;61(3)1-12.

Bathla. Public Investment in Agriculture and Growth: An Analysis of Relationship in the Indian Context, in Seema Bathla and Amaresh Dubey (Ed), Changing contours of Indian agriculture: investment, income and non-farm employment, Chapter 2, Springer Nature, Singapore. 2017;13-28.

Kalhon AS. Economics of Farm Management in India, Theory and Practice, Allied Publishers Limited; 1980

Sen AK. “Size of Holding and Productivity”, The Economic Weekly. 1964;16(5, 6 and 7):323-326.

Rao CH. Hanumantha. “Alternative Explanation of Inverse Relationship Between Farm Size and Output Per Acre in India.” Indian Economic Review. 1966;1(2):1-12.

Sharma HR, Sharma RK. Farm size-productivity relationship: Empirical evidence from an agriculturally developed region of Himachal Pradesh. Indian Journal of Agricultural Economics. 2000;55(4)605-515.

Chand Ramesh. Farm size and productivity: understanding the strengths of small holders and improving their livelihoods. Economic and Political Weekly. 2011;XLVI(26 and 27):5-11.

Economic Survey (Various Issues), Ministry of Finance, Government of India.

Government of Odisha. Economic Survey (2011-12), Planning and Coordination Department, Directorate of Economics and Statistics; 2012.

Government of India. “Households Capital Expenditure in India” Report No.504, NSS 59th Round, January-December, 2003), Ministry of Statistics and Programme Implementation; 2006.