http://web.stanford.edu/~fafchamp/qual.pdf

Quality control in nonstaple food markets: evidence from India

This paper attempts to assess the impact of trade liberalization on growth, poverty, and food security in India with the help of a national level computable general equilibrium (CGE) model. It shows that GDP growth and income poverty reduction that might occur following trade liberalization need not necessarily result in an improvement in the food security / nutritional status of the poor. Evidence from simulations of (partial) trade reforms reflecting a possible Doha-like scenario show that the bottom 30 of the population in both rural and urban areas suffer a decline in calorie and protein intake, in contrast to the rest of the population, even as all households increase their intake of fats. Thus, the outcome on food security / status with regard to individual nutrients depends crucially on the movements in the relative prices of different commodities along with the change in income levels. These results show that trade policy analysis should consider indicators of food security in addition to overall growth and poverty traditionally considered in such studies.

Trade liberalization, poverty and food security in India abstract: This paper attempts to assess the impact of trade

Regional divergence and club convergence in India

Did China׳s rare earth export policies work? — Empirical evidence from USA and Japan

One of the major facets of the ongoing heated debate in Europe and beyond on globalisation concerns trade liberalisation, seen by many as a major threat to people’s livelihoods and jobs, while its promoters claim that it offers a unique tool to reduce poverty. Not surprisingly the current ‘Doha Round’1 negotiations at the World Trade Organization (WTO) appear to have reached a stalemate due to wide opposition from countries and regions cutting across both the income and development divide. Why are these negotiations so difficult, what are the true advantages and drawbacks of further trade liberalisation and who stands to gain and/or lose from it?

Winners and Losers – Impact of the Doha Round on Developing Countries:

Agricultural trade liberalization: growth, welfare and large country effects

In this paper, we explore the potential impacts of trade and investment-related policy reforms on India’s agro-processing sector. We consider the direct effects of policy reforms within the processing sector, and the indirect effects on agro-processing of policy reforms in the primary agriculture sector, in the Indian economy as a whole, and in a multilateral framework. Towards this, we develop a 22-sector, 16-region version of the GTAP computable general equilibrium (CGE), global model for our analysis.
 
We find that trade and investment-related reforms in agro-processing together can help the sector to grow. Policy reforms that stimulate investment and help to improve productivity will be crucial in offsetting the contractionary pressures of trade reform alone on the production of processed agricultural products. We also find that indirect effects on agro-processing from India’s policy reforms in other sectors are more important than reforms in agro-processing itself. Our findings argue for an economy-wide perspective when targeting reform or development of the agro-processing sector in India. 

Compared to trade reform, comprehensive domestic reforms in the agro-processing and agriculture sectors relating to investment are critical for achieving growth in agro-processing. However, while the impacts of trade reform per se seem to be small, trade reform - by ushering in a higher degree of competition - could itself be a stimulus for investment and productivity gains in India.

At present, unilateral reforms, especially those that improve productivity in agro-processing and in primary agriculture, are more important to agro-processing than multilateral trade reforms. Nevertheless, our findings also suggest the importance of pursuing a domestic reform agenda within a multilateral trading strategy that can accommodate the expected economic growth of India and its future role in global markets, with general equilibrium effects on agro-processing

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Reforms in Indian agro-processing and agriculture sectors in the context of unilateral and multilateral trade agreements

Trade policy reforms which lead to changes in world prices of agricultural commodities or domestic policies aimed at affecting agricultural prices are often seen as causing a policy dilemma: a fall in agricultural prices benefits poor urban consumers but hurts poor rural producers, while a rise yields the converse. Poor countries have argued that they need to be able to use import protection and/or price support policies to protect themselves against volatility in world agricultural prices in order to dampen these effects. In this paper, we explore this dilemma in a CGE model of India that uses a new social accounting matrix (SAM) developed at the Indira Ghandi Institute of Development Research (IGIDR) in Mumbai. The SAM includes extensive disaggregation of agricultural activities, commodity markets, labor markets, and rural and urban households. This SAM includes 115 commodities, 48 labor types and 352 types of households, (classified by social group, income class, region, and urban/rural). The CGE model based on this SAM can be used to explore the linkages between changes in world prices of agriculture and the incomes of poor rural and urban households, capturing rural-urban linkages in both commodity and factor markets. The results indicate that the inclusion of linkages between rural and urban labor markets is necessary to fully explore, and potentially eliminate, the dilemma. A fall in agricultural prices hurts agricultural producers, lowers wages and/or employment of rural labor, and in some cases spills over into urban labor markets, depressing wages and incomes of poor urban households as well. In these cases both rural and urban poverty increases. The paper explores the strength of these commodity and factor market linkages, and the potential spillover effects of policies affecting agricultural prices.

/pdf/policy-dilemmas-in-india-the-impact-of-changes-in-1z367imu1c.pdf

Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty

The study finds that a U-shaped relationship exists between farm size and farm / farmer's income. The results also show that both on-farm and off-farm diversification have an inverted U-shape relationship with farm / farmer's income. That is, diversification up to some level helps improve income but excessive diversification might lead to misallocation of resources and hence a fall in income. The results also show that engagement in public works programme such as MGNREGA has an adverse impact on farm / farmer's income, possibly due to the opportunity cost of time spent in such programmes. Finally, positive effect of education on income is seen only at somewhat high education levels.

Drivers of farmers' income: The role of farm size and diversification

This paper analyses the role of storage facility and structural factors in determining agricultural commercialization in India. Commercialization of agriculture represents an important aspect of farm market behaviour. Farmers commercialization decision may be represented by farmers decision to participate in market sale, degree of market participation, number of market transactions and diversity of market agency sale. Access to storage could significantly regulate post-harvest management and marketing decisions by farmers. It could prevent distress sale and enhance better commercialization practices by farm households. Apart from access to storage facilities, this study considers various other farm, household, and structural variables in affecting farmers crop sale outcomes. Results show that farm households with likely access to storage facility have higher probability to participate in market transaction, sell more number of crops, and are more likely to have higher number of market transactions. This shows that having access to storage facility is likely to raise agricultural commercialization of farmers in India. The findings also show that structural or location specific variables which are beyond the control of the farm and household could significantly affect farmers marketing decisions.

A. Ganesh Kumar

Papers

Agricultural trade liberalization: growth, welfare and large country effects

Reforms in Indian agro-processing and agriculture sectors in the context of unilateral and multilateral trade agreements

Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty

Drivers of farmers' income: The role of farm size and diversification

Do storage and structural factors determine agricultural commercialization in India