The impact of the Green Revolution on structural change

The Green Revolution

An accumulation of technological breakthroughs led to unprecedented growth in global agricultural productivity during the second half of the 20th century. Between 1960 and 2000, global food grain production doubled from one to two billion tonnes (Khush 2001). Productivity growth was driven almost entirely by the development of new high-yield varieties (HYVs) for a set of major crops that generate significantly more food output per land area (Ball et al. 1997). This transformation of agricultural production has been dubbed the Green Revolution.

The global economic impact

Despite the vast changes in agricultural production associated with the Green Revolution, and the centrality of agricultural productivity growth in many models of industrialisation and development (eg. Murphy et al. 1989), causal evidence on the economic effects of the Green Revolution remains scarce. This is likely in part because changes in agricultural productivity could be influenced by a range of factors, including government investment, education, the quality of credit markets and property rights, or income.

Academic and policy debates on the impact of the Green Revolution remain far from conclusive (e.g. Foster and Rosenzweig 1996, Thirtle et al. 2003, and Pingali 2012 on the benefits; Ladejinsky 1970, Griffin 1974, Harriss 1977, and Shiva 1991 on the downsides). While folk wisdom, largely based on the experience of England during the Industrial Revolution, suggests that agricultural productivity growth should lead to industrialisation and subsequent development, the relationship between the Green Revolution and structural change is theoretically ambiguous (Matsuyama 1992). This ambiguity further motivates systematic empirical analysis of the Green Revolution’s real-world economic impact.

The study

In a recent study, I present estimates of the impact of the Green Revolution on structural change and economic growth by exploiting the fact that time-invariant characteristics of different regions allowed them to adopt and reap the benefits of Green Revolution technologies with very different levels of success (Moscona 2017). Since India was the epicenter of HYV-led agricultural productivity growth, I first analyse the effect of agricultural productivity growth across districts in India. However, these results are not necessarily informative about the impact of the Green Revolution on India, or any country as a whole. For example, they would not capture spillover effects across districts or other dynamics, like demand-driven industrialisation, that might operate at the country level. Therefore, I present a second set of results that analyses the impact of the Green Revolution across countries.

To isolate the causal effect of the Green Revolution, I construct a measure of the predicted change in agricultural productivity for each unit of analysis. Rather than measuring actual changes in productivity, which can be influenced by factors like changes in income, I measure the productivity change that would be predicted to result from the release of new crop technologies based on a region’s baseline characteristics (including geographic and ecological conditions). After calculating predicted productivity both at the district level and country level, I use it as an instrument for actual changes in productivity in both settings.

The results

Both at the district level and country level, agricultural productivity growth associated with the Green Revolution led to greater entrenchment in the agricultural sector.

District-level impacts in India

Within India’s rural sector, agricultural productivity growth:

• increased access to schools and medical centers, the presence of high-quality roads, and agricultural wages;
• led to greater district-level employment in farming – both in absolute terms and as a fraction of total employment;
• increased the amount of land devoted to agriculture; and
• led to a less equal distribution of land ownership by decreasing the fraction of individuals in the farm sector who owned land.

These impacts on rural sector growth came at the expense of growth in the urban sector. The Green Revolution led to a decline in district-level urbanisation and employment in manufacturing, services, and a range of other non-farm occupations. These results are explained in part, but not completely, by lower net migration into districts that experienced greater agricultural productivity growth.

Rural sector growth extended beyond employment and into the field of politics. Coinciding with the escalation of the Green Revolution in agriculture were the development and increasing electoral success of political parties explicitly aligned with agrarian interests. Earlier work has posited a direct link between growth in agricultural wealth and the political power of rural parties (see Varshney 1995, Dasgupta 2014, for a recent empirical analysis).

Using my empirical framework, I find that agricultural productivity growth led to better electoral outcomes for rural opposition parties and a decline in support for the Indian National Congress. Rural opposition parties called for agricultural price regulation and greater government investment in the rural sector, and were highly critical of the Indian National Congress, which they accused of having an urban bias (Brass 1980: 413-414).

These results contribute to a narrative in which agricultural productivity growth increased the economic and political strength of the rural sector in Indian districts, which redoubled its commitment to continued investment in and development of the farm economy.

Country-level impacts

As noted above, the district-level results do not necessarily shed light on the process of structural change at the national level. Using the same empirical strategy as used in the sub-national analysis at the country level, I find that the cross-country impact of the Green Revolution closely mirrors results from within India.

Agricultural productivity growth at the national level increased the amount of land devoted to agriculture and agricultural employment, reduced agricultural imports, and led to a decline in urbanisation. All of these effects are most pronounced in countries that were lower in the 1960 income distribution.

Country-level analysis also makes it possible to test the effect of agricultural productivity growth on income. I find no evidence that the Green Revolution had a positive effect on GDP – if anything, the Green Revolution had a negative effect on per capita income for countries that were lowest in the 1960 income distribution. 

Conclusion

The development of new agricultural technologies that began during the 1960s led to an unprecedented increase in crop yields, especially in the developing world. Despite broad and long-standing interest in the impact of agricultural development on economic growth, little scholarly consensus has developed. The main narrative that emerges from these new findings is that far from spurring industrialisation and urban development, the Green Revolution led to greater entrenchment in the agricultural sector both at the district and the country level.

More broadly, these findings suggest that productivity shocks may have limited or even negative consequences in equilibrium by shifting individuals, resources, or political capital away from potentially more productive activity.

References

Ball, V E et al. (1997). “Agricultural Productivity Revisited”, American Journal of Agricultural Economics 79(4): 1045-63.

Brass, P R (1980). “The Politicization of the Peasantry in a North Indian State: I”, The Journal of Peasant Studies 7(4): 395-426.

Dasgupta, A (2014). "The Curse of Strong Roots in Dominant Party Collapse: Evidence from India’s Green Revolution", SSRN Scholarly Paper.

Foster, A D, and Rosenzweig, M R (1996). “Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution”, The American Economic Review 86(4): 931-953.

Foster, A D and Rosenzweig, M R (2004). “Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000”, Economic Development and Cultural Change 52(3): 509-542.

Griffin, K (1974). The Political Economy of Agrarian Change: An Essay on the Green Revolution, London: Macmillan Press.

Harriss, J (1980). "The Limitations of HYV Technology in North Arcot District: The View from a Village", in B H Farmer (ed.) Green Revolution, Palgrave Macmillan, pp. 124-142.

Khush, G S (2001). “Green Revolution: The Way Forward”, Nature Reviews Genetics 2(10): 815-22.

Ladejinsky, W (1970). "Ironies of India’s Green Revolution", Foreign Affairs.

Matsuyama, Kiminori, “Agricultural Productivity, Comparative Advantage, and Economic Growth,” Journal of Economic Theory 58(2): 317-34.

Moscona, Jacob (2017). “The Green Revolution and Structural Change: An Empirical Investigation of Modern Agricultural Development,” Working paper.

Murphy, K M, Shleifer, A and Vishny, R (1989). “Income Distribution, Market Size, and Industrialization”, The Quarterly Journal of Economics 104(3): 537-64.

Pingali, P L (2012). "Green Revolution: Impacts, Limits, and the Path Ahead", Proceedings of the National Academy of Sciences 109(31): 12302-12308.

Shiva, V (1991). The Violence of the Green Revolution: Third World Agriculture, Ecology, and Politics, London: Zed Books.

Irz, X, Lin, L, Thirtle, C and Wiggins, S (2001). “Agricultural Productivity Growth and Poverty Alleviation”, Development Policy Review 19(4): 449-66.

Varshney, A (1995). Democracy, Development, and the Countryside: Urban-Rural Struggles in India, New York: Cambridge University Press.