Citation

Reddy VR, Reddy PP. Indian Journal of Agricultural Economics 2003; 58(3): 333-352.

Copyright

(Copyright © 2003)

DOI

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PMID

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Abstract

This paper attempts to examine the returns to Indian agriculture during the 1990s, when major policy reforms in trade and deregulation were initiated. These reforms include lifting of quantity and price restrictions on the export of important items like rice and wheat, lifting import restrictions on edible oils, lowering of import duties, etc., along with reductions in input subsidies such as fertilisers, power, water, etc. While the decline in input subsidies have pushed the cost of cultivation upwards, deregulation and trade liberalisation have not only increased the output prices but also opened up new vistas to the farming community in terms of new crops and cultivars. However, the net impact of these policies is not clear, as reflected in the micro level happenings such as farmer's suicides. While these incidents could be limited to specific crop regions, what is happening at the macro level and crops with wider coverage is of greater policy relevance especially in the context of continuing price support to major crops like paddy and wheat. The main focus of the paper is: how far the policy changes in the 1990s, with specific reference to price policies, have benefited the farming community at large? Unless farmers gain substantially the reforms have no meaning. Moreover, in the absence of such gains, reforms would not sustain in the long run. The specific issues in this regard include: (a) what are the crops and regions that have performed well in terms of net returns; (b) what is the role of price policies or trade policies in their performance and (c) conditions under which trade policies benefit the farmers. Accordingly, this paper is organised in five sections. The following section briefly reviews the policy background and approach to the study. Section III presents the trends in yields, wholesale prices; minimum support prices; international prices, costs and net returns of important crops across states. Section IV examines the impact of edible oil imports on prices and profitability of groundnut in a major groundnut-growing region and the last section makes some concluding remarks.

Language: en