PRODUCTION FUNCTION (An Empirical Study on Determinants of Output in Agriculture)

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PRODUCTION FUNCTION (An Empirical Study on Determinants of Output in Agriculture)

Journal Title: International Journal of Research in Social Sciences - Year 2012, Vol 2, Issue 3

Abstract

The main thrust of this paper is to examine the production conditions in Indian agriculture. It is expected economic reforms in 1990s for the agrarian sector must have motivated the farmers for a better performance in crop production1. The neo-classical analysis of market behavior cannot be directly applied to study agricultural production. Existence of market imperfections is the important characteristic of the agricultural sector and farmers very often have to plan and carry out their production decision in peculiar complicated conditions. A number of factors influence farmers‟ productions decisions as well as choice of crops and crop combinations. Household resource endowment in terms of land, labor and capital, availability of input and technology, etc., are the major factors involved in decision making. Household food and food security are also important considerations. Another set of factors is the incidence of insect, pests and diseases (witnessed in the recent past), rainfall uncertainty, and soil conditions. Among the more fundamental structure and institutional factors are the availability of infrastructure and marketing support. Furthermore, the degree of price response influences the farmer producing for the market and those engaged in subsistence farming. As Bharadwaj (1974) quotes, “to identify the production methods or production conditions of Indian agriculture will lead to complications if the objectives of production are Since July 1991, the Indian economy has experienced a series of economic reforms, encompassing all major sectors of the economy (agriculture, industry, trade, foreign investment and technology, public sector, financial institutions and so on); it has marked a steady break from the past regime. It was of the view to improve India‟s competitiveness in the global market, i.e., the new policy was „Laissez faire‟ inspirit as it reinforced the feeling that only liberalization and opining up of the economy to global competition can remove the shackles that chained the Indian economy. Economic reforms in agriculture were mainly in the form of structural changes (the liberalization measure). Liberalization is from many angles. For example, sale and purchase of land except when its purchase makes the land holding move above the ceiling as imposed by law, is allowed. There is complete freedom to the farmers to produce anything they like, on their farms. Government regulation with regard to the movement of crops within the country has almost been abolished and it was also decided to liberalize the exports as well as imports of agricultural commodities, of course with some safeguards. Agriculture is been made completely free from direct taxes.

Authors and Affiliations

Dr. Thirumagal J Pillai

Keywords

PRODUCTION FUNCTION

EP ID EP19832
DOI -
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