Crop yield convergence across districts in India's poorest state.

Bihar, India's poorest state, witnessed impressive yield growth in its three principal crops during the last decade or so. This paper examines whether a reduction in regional yield disparities accompanied these state-level productivity gains. The convergence test allows the district-specific element of productivity to vary with time, thus permitting divergence in interim phases. District rice yields converged towards a common growth path. The results for wheat and maize are not as conclusive. However, there is strong evidence of divergence for each crop in recent years. This divergence, nonetheless, happens in the presence of club convergence. The club classification transcends agro-climatic boundaries, indicating a role for policy to aid growth in the lagging districts. The shifts in credit allocation over the years do not appear to be driving the yield divergence, highlighting the limitations of a macro credit-driven policy. [ABSTRACT FROM AUTHOR]