Sudhir K. Singh

Can Labor Market Imperfections Explain Changes in the Inverse Farm Size-Productivity Relationship?: Longitudinal Evidence from Rural India

We use a large national farm panel from India from 1982 to 2008 to show that the inverse relationship between farm size and output per unit of land weakened significantly over time. A key reason was the substitution of capital for labor in response to nonagricultural labor demand. In addition, family labor was more efficient than hired labor in 1982 and 1999, but not in 2008. In line with labor market imperfections as a key factor, separability of labor supply and demand decisions cannot be rejected in the last period, except in villages with very low nonagricultural labor demand. (JEL O13, Q15)

Does Land Fragmentation Increase the Cost of Cultivation? Evidence from India

Abstract To appreciate overall impacts of fragmentation, underlying channels, and potential heterogeneity by holding size, we distinguish average fragment size and mean inter-fragment distance as two aspects of this phenomenon. Estimating a cost function with associated input demand equations on a large nationally representative Indian survey, robust to endogeneity, suggests that fragmentation’s main impact is to reduce mean plot size below the threshold for mechanisation. Higher inter-fragment distances increase costs for larger holdings, but by a much smaller magnitude. Implications as to when programmes to consolidate holdings may make sense and ways to ensure their sustainability are discussed.

Are mega-farms the future of global agriculture? Exploring the farm size-productivity relationship for large commercial farms in Ukraine

With farms cultivating tens or hundreds of thousands of hectares, Ukraine is often used to demonstrate the existence of economies of scale in modern grain production. Panel data analysis for all the countrys farms with more than 200 hectares in 2001-2011 suggests that higher yields and profits are due to unobserved factors at rayon (district) and farm level rather than economies of scale. Productivity growth was driven not by farm expansion but by exit of unproductive and entry of more efficient farms. Higher initial shares of area under farms with more than 3,000 or 5,000 hectares at the rayon level significantly reduce subsequent exit, suggesting that land concentration reduces productivity growth. The paper draws implications for global evolution of farm structures.

Wages, Prices, and Agriculture: How Can Indian Agriculture Cope with Rising Wages?

Rapid economic growth in India has resulted in rapidly rising rural wages. Using the framework of variable profit functions and household level data, we study econometrically the wage impacts on crop agriculture. Rising wages are associated with decreasing crop output, other things being equal. Crop prices would need to increase by 80% in the short run to offset the effect of an agricultural wage increase, or by 140% in the short run to offset rural non†farm wage increases as well. However, because non†land farm assets respond positively to the non†farm wage, in the medium term this increase is reduced to 74%. During the period of 1999/00†2007/08, growth in non†land farm assets, the labour force, education and technology has easily compensated for the wage increase, and probably also for the accelerating wage growth. Focusing on growing these shifter variables is a much better policy option than raising prices that would come at the expense of consumers or taxpayers.

Short-Term Effects of India's Employment Guarantee Program on Labor Markets and Agricultural Productivity

This paper uses a large national household panel from 1999/2000 and 2007/08 to analyze the short-term effects of Indias Mahatma Gandhi National Rural Employment Guarantee Scheme on wages, labor supply, agricultural labor use, and productivity. The scheme prompted a 10-point wage increase and higher labor supply to nonagricultural casual work and agricultural self-employment. Program-induced drops in hired labor demand were more than outweighed by more intensive use of family labor, machinery, fertilizer, and diversification to crops with higher risk-return profiles, especially by small farmers. Although the aggregate productivity effects were modest, total employment generated by the program (but not employment in irrigation-related activities) significantly increased productivity, suggesting alleviation of liquidity constraints and implicit insurance provision rather than quality of works undertaken as a main channel for program-induced productivity effects.

Access to Water, Time Allocation and Income in Rural India

In this paper we show that investments to improve the supply and management of water reduce the time spent in fetching water by both men and women, which in turn will lead to a reallocation of the time saved to productive activities, and result in increased incomes. Using the national ARIS/REDS panel data of the NCAER we show that political reservations in the local government for vulnerable groups like scheduled castes and tribes, and women lead to greater local government investments in water supply and improved management. Political reservations are shown to increase the time spent by women in all productive activities, especially in self-employment in farm and non-farm activities. Increases in self-employment are shown to have the greatest impact among the productive activities on household incomes.