Total Factor Productivity Growth and Returns from Research Investment on Soybean in India

Abstract

The study has estimated total factor productivity growth of soybean and returns to research investment on the crop in India. For study, time-series data on cost of cultivation of soybean in major states were collected from the reports of Commission on Agricultural Costs and Prices for the period 1980–81 to 2011–12. The Tornqvist-Theil index has been used to compute input, output and TFP indices and compound annual growth rates on triennium average datasets were estimated. The regression analysis was carried out to identify the sources of TFP growth. The study has indicated moderate growth of TFP in soybean (1.2% per year) with 10.5 per cent share in output growth. The decade-wise analysis has revealed that TFP growth and the share of TFP in growth of output is increasing in the recent decade. The research investment and irrigation have turned out to be the significant variables affecting TFP positively. Although, marginal value output of research has been found less than one, the internal rate of return for research investment is increasing in recent decades, suggesting enhancement in research allocation and irrigation infrastructure for productivity improvement and edible oil security in the country.