Government Policy and Price Support Systems in Shaping Groundnut Cultivation Patterns in South India: Trends, Transitions, and Trajectories

Abstract

Groundnut (Arachis hypogaea L.) is India's most significant oilseed crop, accounting for approximately 45 per cent of national oilseed area and 55 per cent of production. In South India, particularly Andhra Pradesh, Karnataka, Tamil Nadu, and Kerala, groundnut cultivation is deeply embedded in dryland farming systems and rural livelihoods. Over the period 1990–2024, government policies and price support mechanisms have fundamentally shaped cultivation patterns in this region, yet comparative longitudinal analysis across these four states remains sparse in existing literature. This study examines the role of key policy instruments—Minimum Support Price (MSP), Price Support Scheme (PSS), input subsidies, irrigation development, research and extension programmes, and agricultural market reforms—in shaping groundnut area, production, and yield across South India over three and a half decades. Drawing on secondary data from the Directorate of Economics and Statistics, NABARD, CACP, and state agricultural university outlook reports, the study traces how policy interventions have interacted with agro-climatic variability and market conditions to produce divergent state-level outcomes. The findings reveal a productivity-led growth paradox: despite net area contraction from approximately 7.1 million hectares in 1990 to 5.2 million hectares by 2020, total production rose from 5.4 to 10.2 million tonnes, driven by a 149 per cent improvement in average yields. Tamil Nadu emerges as a model of policy-infrastructure alignment, with stable area, rising yields, and persistent above-MSP market prices. Andhra Pradesh and Karnataka experienced area contraction offset by yield gains, while Kerala recorded a secular decline in both area and productivity. The study concludes with four evidence-informed policy recommendations: strengthening MSP procurement delivery, promoting sustainable intensification, investing in post-harvest infrastructure, and scaling Farmer Producer Organisation development. These findings contribute to the comparative literature on agricultural price policy in developing economies and offer actionable insights for oilseed policy design in South Asia.