AGRICULTURE AND EQUITABLE GROWTH: THE CASE OF PUNJAB-HARYANA (INDIA)

Specifications of the conditions under which low-income countries might be able to achieve "equitable growth" and improve their performance in reducing mass poverty is a major issue in development theory and policy. Given the preponderant role of the agricultural sector as a source of output and employment at the early stages of development, much of the theorizing concerning equitable growth has concentrated on the relationships between agricultural growth and poverty reduction. Several theorists have argued that a "sectoral shift" toward agriculture must be a key component in any strategy for equitable growth in low-income countries. Others have argued, however, that shifts in agricultural policies, programs, and investment allocations will be ineffective in reducing poverty unless accompanied by a major "structural shift" toward a more equitable distribution of land holdings and more broadly based control of the institutions supporting agriculture. The adjacent Indian states of Punjab and Haryana have been remarkably successful in achieving rapid agricultural growth, particularly during the period of the "green revolution," and have reduced the percentage of the population below the official "poverty line" to a level well below the levels achieved at similar stages of development in other Indian states or in other countries. Punjab-Haryana thus provides a test of the theories concerning the relationship between agricultural development and equitable growth. In order to carry out the test, we have set up sets of competing "radical" and "neoclassical" hypotheses relating agricultural growth to inequality and to employment. We then assess these hypotheses using available secondary data. The experience of Punjab-Haryana generally supports the neoclassical hypotheses concerning agriculture and equitable growth. The "rural bias" of Punjab-Haryana's policies and programs has resulted in reduced rural poverty despite the absence of a major "structural shift" in land ownership, and high-productivity employment in agriculture has grown rapidly enough to bring many agricultural wage laborers above the poverty line. Although there are some features of development in Punjab-Haryana which make it a "special case," the experience of Punjab-Haryana nevertheless has some scope for replicability elsewhere and provides important lessons regarding the achievement of equitable growth.