Understanding Agrarian Impasse in Bihar

The key hypothesis of policy-makers during the 1980s was that raising tubewell density would trigger agrarian upsurge in Bihar as it did in Punjab, Haryana and western UP. The state did record high growth rates of cereal yields during the 1980s, higher than the national figures. However, this promising development could not be sustained in the 1990s, and cereal yields have stagnated since then. Based on fieldwork in eight villages of Bihar, the paper argues that, more than agrarian structure, the lack of adequate infrastructure and economic incentives has contributed to the agrarian stagnation in Bihar. The growth potential unleashed by the expansion of shallow tubewell irrigation has been constrained by (a) complete neglect of public sector investments in physical and institutional infrastructure and (b) unfavourable output to factor price ratios.