Institute for Social and Economic Change
Working Paper: 265
Total Factor Productivity Growth and Its Determinants
in Karnataka Agriculture
The present study has estimated TFP of ten major crops grown in the Indian state of Karnataka and analysed its determinants. Growth accounting method of Tornqvist-Theil Index has been used for estimating TFP. The study has relied on Cost of Cultivation data published by the Ministry of Agriculture, Government of India. The study draws motivation from the lack of research evidence to show whether productivity growth in the crop sector has improved post 2000s on account of its widespread slow down or negative growth witnessed during 1980s and 1990s. The analysis confirms that most crops have registered low productivity growth across these periods. Interestingly, during 2000-01 to 2007-08 all crops have showed a positive growth in TFP. Further, the analysis of determinants of TFP indicates that the government expenditure on research, education and extension, canal irrigation, rainfall and balanced use of fertilisers are the important drivers of crop productivity in Karnataka. It is necessary that both public and private investment should be enhanced in agricultural research and technology, and rural infrastructure for sustaining productivity growth in the long run.