Production efficiency in Indian agriculture: An assessment of the post green revolution years

• The paper covers the entire agricultural sector of India and is an analysis at the national level.
• We track how different states have performed over a period of three decades following the launching of Green Revolution.
• We disaggregate overall efficiency into two components separately measuring input and output efficiency.
• We focus particularly on efficiency of individual states in utilizing modern inputs like tractors, fertilizers, and power.
• A two-way fixed effects panel data regression is used to explain variation in measured efficiency across states and over years.

In this paper we use the nonparametric method of Data Envelopment Analysis (DEA) to obtain Pareto-Koopmans measures of technical efficiency of individual states over the years 1970–71 through 2000–01 in a multi-output, multi-input model of agricultural production. We disaggregate overall efficiency into two distinct components representing output and input efficiencies and identify the contribution of individual outputs and inputs to the measured level of overall efficiency. Because introduction of modern inputs has been a major component of the process of modernization of Indian agriculture, we examine to what extent different states succeeded in utilizing the modern inputs compared to the traditional inputs. Variations in the DEA efficiency scores across states and over years is explained in terms of differences in various institutional and demographic factors in a second stage regression analysis.