Executive Summary Safflower Oiil0

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					                             Executive Summary
       Oilseeds research was one of the major components of Technology Mission on
Oilseeds (TMO), which resulted into attaining self-sufficiency during late 80s and early 90s
in oilseed production. In this context, the mission is referred to be a big success. What is
unknown is the extent and kinds of contribution of research in overall increase in oilseed
production and productivity. The present study was taken with this as a major objective to
assess the economic impact (return on investment) of oilseeds research in the country during
1980-81 to 1999-00.
       The total factor productivity (TFP) approach was used to estimate the growth
accounting parameters of TFP and marginal internal rates of return of investment on oilseeds
research were determined. The growth in TFP of oilseeds indicates increase in output not
counted for increase in input. This increase is attributable to improvement in the efficiency
and the technical change. Based on availability of data, the analysis has been done for six
major annual edible oil crops namely rapeseed & mustard, groundnut, soybean, sunflower,
sesame and safflower.
       The results, in addition to clearly quantifying the impact of oilseeds research, also
provide important lessons for research and extension policy and for formulation of future
research priorities. The main findings of the study are summarised as below:

1.     The investment on oilseeds research increased in both current and real prices during
       the last two decades at compound growth rate of 6.4 %, which was higher than the
       growth rate in area and production of oilseeds and hence indicating improvement in
       research intensity.

2.     The increase in growth rate of investment in one oilseed crop was accompanied by
       decrease in investment in another crop in the same period reflecting reallocation
       approach followed in research resource allocation in oilseeds research.

3.     Research investment on oilseed crops other than six edible oil crops mentioned above,
       grew comparably at a higher rate to meet different kinds of demand for these crops in
       the total oilseed complex.

4.     The allocations in total oilseeds research from agencies other than ICAR decreased,
       which is not a healthy development from the point of view of infusing dynamism in
      research. The allocations under the AP Cess fund scheme picked slightly after drastic
      decrease and registered a compound growth rate of five per cent during last two
      decades. The higher budget allocation would develop capabilities to foster public-
      public and public-private partnership to strengthen oilseeds research.

5.    Among oilseed crops, investment preference changed from groundnut to rapeseed &
      mustard, the later accounting for one-fourth of the total research investment. The
      allocations have moved in favor of rapeseed & mustard and sesame.

6.    The shares of research investment of three crops namely rapeseed & mustard,
      groundnut and soybean were less than their contribution to total VOP and hence are
      the future priorities to make efficient allocations. The research investment particularly
      on groundnut should be doubled to maintain parity with its contribution (congruence

7.    The results on growth rate and trends in TFP of oilseed crops shows that technical
      change in majority of the oilseeds have either stagnated or declined in the past twenty
      years except in rapeseed and mustard. The TFP of rapeseed and mustard grew at
      significant rate while it was almost stagnated for groundnut, sunflower and soybean.
      The TFP declined significantly for sesame and safflower.

8.    The annual rates of growth of TFP for rapeseed and mustard were observed 2.41%
      while it was 0.39% and 0.45% for groundnut and sunflower. The rate of decline in
      TFP of soybean was –0.06% while it decreased at the rate of -1.09% and –1.92% for
      sesame and safflower, respectively.

9.    Among states, TFP grew for both the crop studied from Rajasthan while it grew only
      in one oilseed crop in UP, Maharastra and MP and it was negative in all the oilseed
      crops studied in Karnataka and Gujarat. The states with growing productivity are the
      potential areas for research emphasis.

10.   The TFP were regressed against explanatory variables related with research stock,
      infrastructure, price parity with the competing crop, distribution of certified seed or
      irrigation, to find out the contribution of these variables to the growth of TFP. It was
      found that research stock explained growth in TFP to the extent of 57% in rapeseed
      and mustard, 8% in groundnut, 85% in soybean and 3% in sunflower. Other variables
      like infrastructure and price parity were having negative contribution and appear to be
      counter productive contrary to the findings of earlier studies.

11.   The economic rates of return per annum estimated on the basis of above results, were
      very high to the one rupee additional invested on oilseeds research. It is called
      marginal internal rate of return (MIRR) in economic terms. It was 177% in rapeseed
      & mustard and 119% in soybean. In groundnut and sunflower, the economic rates of
      return were 77% and 62%, respectively. The overall economic returns were found to
      be higher in oilseed crops in comparison to other crops or group of crops.

12.   The economic returns to research investment was observed positive and higher even
      for those oilseed crops, which were having almost stagnated TFP. This leads to
      conclude that investment on oilseeds research have been the rescuing factor,
      otherwise, TFP in those crops would have further declined.

13.   The sensitivity analysis was carried to overcome the probability of error in estimation
      of oilseeds research investment and oilseeds production due to poor database. The
      economic rates of return always remained higher than hundred percent in rapeseed &
      mustard and soybean, and higher than fifty per cent in groundnut and sunflower, even
      in the worse case of underestimation of research investment and overestimation of

14.   The study makes strong recommendation for future investment on oilseeds research in
      the prevailing economic scenario of deficit production and very high import. The
      outcomes of oilseeds research will further improve with adequate policy and
      infrastructural supports to oilseeds.

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