The output of paddy rice production fluctuated within the period under study until 1977-78 when the real potential growth rate of the agriculture sector emerged due to the intensive use of HYVs in the region. Starting 1977-78, not only has there been a yearly increase in the output of paddy rice but also in the yield per acre. This increase was the result of the vertical expansion (i.e., technological change) in paddy rice production. Technological change refers to the use of hybrid paddy rice seeds starting 1974.