ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Price and Non-Price Factors in Agriculture Growth

Agricultural Growth in India: Role of Technology, Incentives and Institutions by A Vaidyanathan (New Delhi: Oxford University Press), 2010; pp xvi + 225, Rs 675.

Understanding the Nature and Causes of Food Inflation

The main reason for the current surge in food prices is the supply shock due to the drought in 2009 and the carry-over effect of the low growth of food production in 2008-09. As the frequency of such shocks is expected to rise, India needs to have an effective food management strategy to deal with these episodes. It also needs to explore various other options for price stabilisation like maintaining buffer stocks and using trade. The economy has to invest heavily in expanding storage capacity for various types of foods in both the public as well as private sectors. Due to fluctuations in growth, the export of some commodities in one or two years is followed by their imports, which invariably involves a large variation in costs and prices. As India is a net exporter of food, a part of what is now exported needs to instead become part of domestic stabilisation stocks.

Dealing with Effects of Monsoon Failures

The deficiency and uneven distribution of rainfall during the 2009 monsoon has brought several issues to the fore: rising water demand from various sectors, regional effects of a drought and the failure of the India Meteorological Department to provide credible forecasts at the disaggregate level. A multi-pronged strategy to permanently deal with monsoon deficiency requires exploring newer drought tolerant and climate-conducive crop varieties, enhancing employment opportunities to non-poor households, and developing a new model that improves the efficacy of the IMD forecast.

The Wheat Market: Distortions Caused by Government Interventions

Wheat stocks are rising again, well beyond the minimum required, and a large procurement is expected from the 2009-10 wheat marketing season that begins on 1 April. India appears set once again for yet another phase of rising stocks, mounting carrying costs, and a crisis of plenty. The volatile cycles of rising and falling stocks appear to be the result of poor government intervention, in particular, poor procurement policies. It is argued here that unidirectional revisions in the minimum support price create serious demand and supply imbalances and extreme volatility in buffer stock cycles.

The Global Food Crisis: Causes, Severity and Outlook

This paper discusses the various factors that have been identified as responsible for the current global crisis in the availability of food and for the rise in prices of cereals. It argues that the crisis is different from the ones in the 1960s and 1970s in that there is now likely to be a permanent upward shift in real prices. It is important that developing countries place renewed emphasis on self-sufficiency to ensure food security, since they are unlikely to be able to afford expensive food imports.

Demand for Foodgrains

Despite the declining trend in per capita direct consumption of foodgrains, total demand is projected to increase at 2 per cent per annum in the medium term on account of an increase in the population, and the need for grain as feed and in related purposes. This implies that the growth rate in domestic foodgrain production needs to accelerate three to four times to guard against an adverse impact on food security.

Wheat Import and Price Outlook for 2007-08

The shortage of wheat and its increasing prices have become causes for concern in India. This article looks into the import situation, suggests possible remedies to overcome the shortage, and forecasts wheat prices for the rest of 2007-08.

Growth Crisis in Agriculture

The sharp deceleration in the growth of the agricultural sector against the background of an impressive growth of the larger economy is widening disparities between the incomes of workers in non-agricultural and agricultural activities. It also adversely affects the welfare of the majority of the population, which is dependent on agriculture. This paper examines the trend in agricultural growth and factors underlying the slowdown and explores ways and means to bring about an acceleration.

Progress and Problems in Agricultural Insurance

This article discusses the insurance schemes in place for agriculture and examines problems that prevent them from being implemented on a larger scale.

Wheat Supply, Price Prospects, and Food Security

The last two years have seen a poor wheat harvest. While there has been some recovery this year, what consequences do recent trends have for the supply of wheat, its price and food security.

Whither India's Food Policy?

Government intervention in foodgrain markets meant primarily for promoting food security has reached a stage where consumers are being deprived of basic food, when a large proportion of the output is diverted from the market to government warehouses. High prices for grains paid to producers, completely ignoring demand-side factors and costs involved in building and holding grain stocks have put them outside the reach of consumers. Stocks are being liquidated by releasing them to private trade for export at a heavy discount. This implies a sort of taxation for domestic consumers and provides a perverse incentive for private trade to withdraw from the primary market.

Determinants of Capital Formation and Agriculture Growth

This paper estimates a simultaneous equation model using private and public sector capital formation and GDP agriculture as independent variables to find out the determinants of capital formation and their impact on GDP agriculture. The rate of return on private investments, which in turn depends on the terms of trade and technology, is found to be the most important determinant of private capital formation. There is an asymmetry in the effect of public investment on private investment: an increase in public investment definitely induces a rise in private investment, while a decline forces farmers to cope with its adverse impact, again by increasing private investment.


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