Overview
Following liberalizing economic reforms in the late 1980s
and early 1990s, India is now the world's second fastest
growing economy, as well as its second most populous. Faster
growth is strengthening and diversifying consumer demand,
and India is now among the world's leading importers of
vegetable oils and pulses. Despite a rich and extensive
agricultural resource base and burgeoning subsidy outlays,
farm sector performance has remained sluggish, creating
pressure for reform of domestic agricultural policies. It
has been difficult to achieve consensus on the reform agenda,
but measures to increase market orientation, improve marketing
efficiency, and strengthen incentives for private investment
are likely to be key goals. ERS research focuses on understanding
the trade implications of changes in consumer demand, market
structure, domestic and trade policy that are likely to
occur as the Indian economy continues its rapid expansion.
Features
The Environment for Agricultural
and Agribusiness Investment in India (July 2008). Despite strong overall economic growth
and strengthening food demand, investment in Indian agriculture
and agribusiness has remained sluggish, and growth in farm
output has slowed, since the early 1990s. The policy environment
has grown more investor friendly since the late 1990s and
private investment appears to be responding, but significant
barriers remain and the pace of future reforms remains
uncertain.
The
Elephant Is Jogging: New Pressures for Agricultural Reform
in India (February 2004). India's economy and agricultural sector have
made remarkable progress in the 57 years since independence
in 1947. Now, however, the agricultural sector has outgrown
the policies that contributed to past success, as strengthening
consumer demand, rising subsidies, and low agribusiness
investment create pressure for policy reform.
Recommended Readings
Indian Wheat and Rice Sector
Policies and the Implications of Reform (May 2007).
The economic environment for India's food grain sector
has changed significantly since the Green Revolution
of the 1960s and 1970s. Future developments will be shaped
by changes in productivity and consumer demand, but primarily
by how policies adapt to the new environment. Some of
these changes, such as reducing price supports and the
scope of government food grain operations, would likely
curtail government costs, benefit consumers, allow for
a larger private sector role in the domestic market,
and increase reliance on international trade.
The Role of Policy
and Industry Structure in India's Oilseed Markets (April 2006). Rising
incomes in India are likely to lead to continued strong
growth in that country's demand for oils and oil meals.
Extensive policy intervention affects Indian oilseed
production, trade, and processing. Current high tariffs
on oilseeds and oil are of little benefit to Indian
producers while imposing high costs on consumers. Policy
reform, particularly liberalization of oilseed imports,
could improve producer and consumer
welfare and have a significant impact on trade.
Prospects
for India's Emerging Apple Market (January 2006). Strong economic
growth is projected to lead to continued expansion of Indian
apple
demand, but the high cost of domestic and imported apples
compared with other Indian fruit is likely to limit consumption
to higher income consumers. High internal marketing margins—or
returns to traders over and above measured costs—are
a major contributor to high retail apple prices.
See all recommended readings...
Recommended Data Products
Production, Supply,
and Distribution (PS&D) contains official USDA
data on production, supply, and distribution of agricultural
commodities for the United States and major importing
and exporting countries. The database provides projections
for the coming year and historical data for more than
200 countries and major crop, livestock, fishery, and
forest products.
Foreign Agricultural Trade of the
United States (FATUS) provides U.S. agricultural exports
and imports, volume and value, by country, by commodity,
and by calendar year, fiscal year, and month, for varying
periods, such as 1935 to the present or 1989 to the present.
Updated monthly or annually.
WTO Agricultural
Trade Policy Commitments Database contains data
on implementation of trade policy commitments by WTO
member countries. Data on domestic support, export subsidies,
and tariffs are organized for comparison across countries.
This queriable database offers various options for viewing
and downloading data.
Agricultural Market
Access Database (AMAD) is a publicly available information
tool for analyzing WTO market access issues in agriculture.
It contains data and information on WTO member countries,
including tariff schedules, tariff bindings, applied
tariff rates, country notifications to the WTO, import
quantities, and other data useful in tariff analysis.
Recent Research Developments
New Estimates of Supply Response
for Major Indian Crops.
New econometric estimates indicate that production of major
crops in India has become more responsive to changes in
output prices during the post-reform period. The estimates,
using Indian state level data for 1970/71-2004/05, show
that area response for most crops has increased 20-40 percent
since the economic reforms of the early 1990s. For cereal
crops, yield response to price changes is shown to now
be larger than area response, indicating that farmers are
increasingly responding to price incentives by adjusting
use of non-acreage inputs rather than crop area. The results
are reported in Acreage
and Yield Response for Major Crops in the Pre- and Post-Reform
Periods in India: A Dynamic Panel Data Approach, a 2008 report by G. Mythili prepared
as part of a joint research project between ERS and the
Indira Gandhi Institute of Development Research. Contact:
Maurice Landes.
Agricultural policy reform.
Faster economic growth, weak farm sector performance, and
political changes in India have brought agriculture to
the center of policy discussions, but it has been difficult
to reach consensus on the reform agenda. Developments since
the early 1990s highlight the need for consensus in several
areas, including separation of producer price stabilization
and income support policies, change in trade policies that
tax producers or constrain emergence of competitive domestic
markets, and reform of a web of regulatory measures that
impede domestic and foreign private investment in market
infrastructure and agribusiness. Results of this research
are reported in "Farm Sector Performance and Reform
Agenda," Economic and Political Weekly, Vol.
XXXIX, No. 32, Mumbai, India, August 7, 2004. Contact: Maurice
Landes.
Related Briefing Rooms
World Trade Organization (WTO)
Agricultural Baseline Projections
U.S. Agricultural Trade
Related Links
Additional data and information on India are available
from USDA, other U.S. government sources, international organizations,
the Government of India, and research centers.
See all related links...
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