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Agricultural diversification in India and role of urbanization


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  • Rao, P. Parthasarathy
  • Birthal, P. S.
  • Joshi, P. K.
  • Kar, D.


Indian agriculture is diversifying during the last two decades towards High-Value Commodities (HVCs) i.e., fruits, vegetables, milk, meat, and fish products. The pace has been accelerated during the decade of 1990s. HVCs account for a large share in the total value of agricultural production. Supply and demand side factors coupled with infrastructural development and innovative institutions drive these changes. In this paper, the focus is on diversification towards HVCs in the context of urbanization. Group of urban districts (districts with >1.5 million urban population) have a higher share of HVCs compared to the urban-surrounded (near urban districts) and other districts (districts in the hinterland). Among the HVCs, vegetables and meat products have a higher share in urban districts compared to the other two groups. Milk production is more widespread due to excellent network of co-operatives and infrastructure facilities. Using GIS (geographic Information System) approach it was found that urban-surrounded districts with better road network connection to urban centers have been able to diversify towards HVC's to meet the demand in the urban centers. Model results further confirm these findings. Thus, urbanization is a strong demand side driver promoting HVCs. Since urban population is growing at more than 3% per annum, demand for HVCs will drive their production. The analysis has also brought out regional variations in HVCs across different districts in the country that has implications on regional development and planning, and consequently on public and private sector investment strategies.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series MTID discussion papers with number 77.

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Date of creation: 2004
Date of revision:
Handle: RePEc:fpr:mtiddp:77

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  1. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, Elsevier, vol. 20(3), pages 171-185, June.
  2. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, The MIT Press, edition 5, volume 1, number 026261183x, December.
  3. Joshi, P.K. & Gulati, Ashok & Birthal, Pratap S. & Tewari, Laxmi, 2003. "Agriculture diversification in South Asia," MSSD discussion papers, International Food Policy Research Institute (IFPRI) 57, International Food Policy Research Institute (IFPRI).
  4. Prabhu Pingali & Yasmeen Khwaja, 2004. "Globalization of Indian Diets and the Transformation of Food Supply Systems," Working Papers, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) 04-05, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  5. Priya Deshingkar & Usha Kulkarni & Laxman Rao & Sreenivas Rao, 2003. "Changing Food Systems in India: Resourcesharing and Marketing Arrangements for Vegetable Production in Andhra Pradesh," Development Policy Review, Overseas Development Institute, vol. 21(5-6), pages 627-639, December.
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Cited by:
  1. World Bank, 2007. "India's Emergent Horticultural Exports : Addressing Sanitary and Phytosanitary Standards and Other Challenges," World Bank Other Operational Studies 19232, The World Bank.
  2. Massimiliano Cali & Carlo Menon, 2009. "Does urbanisation affect rural poverty? Evidence from Indian districts," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 33205, London School of Economics and Political Science, LSE Library.
  3. Mukherjee, Sanchita, 2010. "Crop diversification and risk: an empirical analysis of Indian states," MPRA Paper 35947, University Library of Munich, Germany.
  4. Kakarlapudi, Kiran Kumar, 2010. "Agricultural Growth Deceleration in India: A Review of Explanations," MPRA Paper 35865, University Library of Munich, Germany, revised 10 Jan 2012.


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