Factors Determining Private Agricultural Investment: A Comparative Case Study of Two States of India

Abstract

The study endeavours to examine the pattern and determinants of agricultural investment in two states of India viz., Haryana and Odisha. The existing literature points out that public investment in agriculture is one among the strongest determinants of private investment and output in agriculture. Accordingly, emphasis has been laid to accelerate the rate of public investment. The present study using primary data in two diverse regions of India is an attempt in that direction. Data from 150 households from both states have been collected using proportionate stratified random sampling method. The study finds that private farm investment as well as output are relatively lower in Odisha, being an agriculturally lagged region. It is further seen that private investment in agriculture has been significantly influenced by canal irrigation, institutional credit, and land size in Odisha. While in Haryana, farmer’s education, land size and institutional credit positively and significantly affected private farm investment. Capital use in agriculture turned out to be positive and significant variables influencing agricultural productivity in both regions. The study thus recommends to ensure public policies on the aspects of irrigation infrastructure, research and extension, improvement rural infrastructure etc. in stimulating private investment and agricultural output. Public investment in agriculture on these components would bridge inter-regional inequalities and ensure inclusiveness as it promotes employment opportunities and sustainable growth in agriculture. In the context of Odisha, being a poorer state, these policies could serve as important tools of poverty alleviation.