Impact of Bt cotton on India's cotton sector: A statistical analysis of production, prices, and costs

Introduction

India is the world's largest producer of cotton, followed by China, the USA, Brazil, Pakistan, Uzbekistan, Egypt, Argentina, Australia, Greece, and Turkey. The country holds the top position globally in both cotton area and production, covering 12.76 million hectares and yielding 354.91 lakh bales (1 bale = 170 kg). While cotton is cultivated across India, nine major states dominate production: Gujarat, Maharashtra, Telangana, Haryana, Rajasthan, Punjab, Andhra Pradesh, Karnataka, and Tamil Nadu. During the kharif season of 2020-21, Telangana ranked second in cotton acreage, covering 60.22 lakh acres, and third in production, following Gujarat and Maharashtra. Key cotton-producing districts in Telangana include Nalgonda, Nagarkurnool, Adilabad, Sangareddy, and Asifabad. In recent years, both the cost of production and farm harvest prices of cotton has been rising. Given the significance of cotton in the Indian economy and its major producing states, this study aims to analyze the growth in area, production, productivity, farm harvest prices, and cost of production (A2+FL) using the compound annual growth function. The findings of this research will aid in shaping policy decisions for short-and long-term planning while also guiding future research toward sustainable agricultural development.

Review of Literature

Growth models play a crucial role in understanding the relationship between time and growth, determining the rate of growth at different points in time, identifying turning points, and serving as reliable indicators of overall growth. Rao and Reddy (2005) [4] analyzed the growth rates of area, production, and productivity of groundnut in Andhra Pradesh across two periods: Period I (1988-89 to 2002-03) and Period II (1953-56 to 2002-03). Their study covered three geographical regions of Andhra Pradesh as well as the state as a whole. The findings indicated that the compound growth rate of area was significant only in Rayalaseema, while production showed significant growth across all three regions and the state overall. Productivity exhibited significant growth in coastal Andhra and Andhra Pradesh as a whole. Mathur (2005) [2] estimated the compound growth rates of area, production, and productivity of rice in India during the high-yielding variety period (1966-67 to 2000-01) using the least squares method to fit an exponential function (y = a bt). Similarly, Aparna et al. (2008) [1] analyzed growth trends in major vegetable crops in the Visakhapatnam district by calculating compound growth rates. Pandey (2004) [3] studied the area, production, productivity, and exports of vegetables in India during the 1990s and projected vegetable demand up to 2021. Sharma and Amod Kalita (2008) [7] examined trends in the area, production, and productivity of major fruit crops in Jammu and Kashmir using secondary data from 1974-75 to 1999-2000. Their study revealed a positive and statistically significant growth in all three aspects during the analyzed period.

Materials and Methods

Nature and sources of data

The secondary data was collected from the official website of the Central Institute for Cotton Research (CICR) (https://cicr.org.in), www.Indiastat.com, and the Directorate of Economics and Statistics, India (https://desagri.gov.in).

Analytical tools

To evaluate the objectives of the study, appropriate analytical tools have been selected based on the nature and availability of data. The analysis of area, production, yield, farm harvest prices, and cost of production of cotton in India will be conducted using standard statistical methods, including compound growth rates and graphical representations. These tools will help identify trends in the area, production, and productivity of cotton in India, leading to meaningful results and conclusions.

Compound annual growth rate analysis

To study the annual growth rate of area, production, productivity and cost of production, the compound growth rate was computed using semi-log or exponential model.

Where, Y t = Quantity (tonnes) of coir products exported in year t. t = Time element which takes the value 1, 2 n for various years. = Intercept

Results and Discussion

The findings of the present study as well as appropriate discussion have been summarized as follows: In India, the major cotton-growing states include Gujarat, Maharashtra, Telangana, Rajasthan, Haryana, and Punjab. Before the introduction of Bt cotton, the area under cotton cultivation, production, and productivity showed a gradual increase from 78.23 lakh hectares to 91.32 lakh hectares, production from 70.10 to 99.97 lakh bales, and productivity reaching 152 kg/ha between 1980-81 and 2001-02 (Table 1).

However, after the introduction of Bt cotton, a significant surge was observed, with the area expanding from 76.70 to 127.67 lakh hectares, production rising from 86.24 to 354.91 lakh bales, and productivity increasing from 191 to 473 kg per hectare. A sharp spike in cotton area, production, and productivity was particularly evident during 2010-11. The compound annual growth rate (CAGR) for area, production, and yield of cotton before the introduction of Bt cotton (Table 2) was 1%, 2.70%, and 1.70% per year, respectively. After the introduction of Bt cotton, these rates increased to 3.10%, 6.20%, and 2.90% per year, respectively. Both sets of growth rates were found to be statistically significant at the 1% level.

Before the introduction of Bt cotton in India, farm harvest prices exhibited a negative growth rate in the states of Andhra Pradesh, Gujarat, Haryana, Madhya Pradesh, Rajasthan, and Tamil Nadu, with rates of -1.80%, -2.00%, -4.00%, -4.50%, -2.10%, and -2.70%, respectively. In contrast, Karnataka and Punjab showed positive growth rates of 0.30% and 1.80%, respectively. After the introduction of Bt cotton, farm prices demonstrated positive growth rates across all states: Andhra Pradesh (7.60%), Gujarat (8.00%), Haryana (10.10%), Karnataka (8.90%), Madhya Pradesh (6.80%), Punjab (7.90%), Rajasthan (9.00%), and Tamil Nadu (9.20%). The compound annual growth rate (CAGR) for state-wise farm harvest prices and cost of production of cotton in India from 1996-97 to 2016-17 is presented in Table No. 4. The data indicates that the CAGR of the cost of production was higher in the states of Andhra Pradesh and Rajasthan compared to the CAGR of farm harvest prices. In the remaining states, the CAGR of farm harvest prices was higher than that of the cost of production. In terms of the cost of production, Rajasthan recorded the highest growth rate, while Punjab showed the lowest. Regarding farm harvest prices, Haryana exhibited the highest growth rate, and Madhya Pradesh recorded the lowest.

Conclusion

The area, production, and productivity of cotton in India showed a significantly increasing trend after the introduction of Bt cotton (2002-03) compared to the period before its introduction. Following the adoption of Bt cotton, the cost of production decreased in the states of Gujarat, Haryana, Karnataka, and Madhya Pradesh, while it increased in Andhra Pradesh, Punjab, Rajasthan, and Tamil Nadu. Before the introduction of Bt cotton (1997-98 to 2001-02), farm harvest prices for cotton were predominantly negative in the states of Andhra Pradesh, Gujarat, Haryana, Madhya Pradesh, Rajasthan, and Tamil Nadu, with rates of -1.80%, -2.00%, -4.00%, -4.50%, -2.10%, and -2.70%, respectively. In contrast, Karnataka and Punjab recorded positive growth rates of 0.30% and 1.80%, respectively. The compound annual growth rate (CAGR) analysis revealed that the cost of production grew at a higher rate than farm harvest prices in Andhra Pradesh and Rajasthan. In the remaining states, the CAGR of farm harvest prices exceeded that of the cost of production. Rajasthan exhibited the highest growth rate in cost of production, while Punjab had the lowest. In terms of farm harvest prices, Haryana recorded the highest growth rate, and Madhya Pradesh had the lowest.

References

1. Aparna B, Shareef SM, Raju VT, Srinivasa Rao V. Growth trends of major vegetables in Visakhapatnam. The Andhra Agricultural Journal. 2008;55(1):68-69.
2. Mathur KN. Trend analysis of area, production and productivity of rice in India. Journal of the Indian Society of Agricultural Statistics. 2005;59(1):39.
3. Pandey UB. Development programmes and policies for accelerated production of vegetables in India. In: Food security and vegetables: a global perspective. 2004:281303.
4. Rao KV, Reddy MD. Status of groundnut in Andhra Pradesh: a case study. Journal of the Indian Society of Agricultural Statistics. 2005;59(1):33.
5. Reddy VM. Growth rates. Economic and Political Weekly. 1978;13(2):806-812.
6. Panwar S, Sharma SC, Kumar A. A critical study of onion (Allium cepa) export of India: non-linear approach. Indian Journal of Agricultural Sciences. 2009;79(3):78-80.
7. Kalita SA, Sharma DC. Trends of area, production and productivity of major fruit crops in Jammu and Kashmir. Agricultural Situation in India. 2008;65(7):477-482.