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Would Indian farmers benefit from liberalization of world cotton and sugar markets?

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  • Surabhi Mittal
  • Jeffrey J. Reimer

Abstract

Rich‐country support programs for cotton and sugar producers are frequently claimed to be detrimental for developing‐country farmers. This study investigates whether a reduction in protectionist policies for Organization for Economic Cooperation and Development cotton and sugar producers would have a measurable effect on the welfare of Indian farmers. The fact that these sectors are intensively regulated within India might suggest that any such effect will be small. However, this study shows econometrically that prices in Indian rural markets closely follow world prices, and that Indian farmers are flexible in the medium to long run in changing production according to price signals from these markets. Depending on the crop and the nature of liberalization, producer surplus increases from 4.2% to 22.3% in the long run.

Suggested Citation

  • Surabhi Mittal & Jeffrey J. Reimer, 2008. "Would Indian farmers benefit from liberalization of world cotton and sugar markets?," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 301-312, May.
    • Handle: RePEc:bla:agecon:v:38:y:2008:i:3:p:301-312
    DOI: 10.1111/j.1574-0862.2008.00301.x
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    References listed on IDEAS

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    1. Amani Elobeid & John Beghin, 2006. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets," Journal of Agricultural Economics, Wiley Blackwell, vol. 57(1), pages 23-48, March.
    2. Koo, Won W. & Taylor, Richard D. & Mattson, Jeremy W., 2003. "Impacts Of The U.S.-Central America Free Trade Agreement On The U.S. Sugar Industry," Special Reports 23069, North Dakota State University, Center for Agricultural Policy and Trade Studies.
    3. Burfisher, Mary E., 2001. "The Road Ahead: Agricultural Policy Reform In The Wto -- Summary Report," Agricultural Economic Reports 34067, United States Department of Agriculture, Economic Research Service.
    4. Elobeid, Amani & Beghin, John C., 2005. "Multilateral Trade and Agricultural Policy Reforms in Sugar Markets (Revised)," Staff General Research Papers Archive 12419, Iowa State University, Department of Economics.
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    Cited by:

    1. Didier Yélognissè Alia & Anne Floquet & Epiphane Adjovi, 2017. "Heterogeneous Welfare Effect of Cotton Pricing on Households in Benin," African Development Review, African Development Bank, vol. 29(2), pages 107-121, June.
    2. Troy G. Schmitz, 2018. "Impact of the 2014 Suspension Agreement on sugar between the United States and Mexico," Agricultural Economics, International Association of Agricultural Economists, vol. 49(1), pages 55-69, January.
    3. Reimer, Jeffrey J. & Zheng, Xiaojuan & Gehlhar, Mark J., 2012. "Export Demand Elasticity Estimation for Major U.S. Crops," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 44(4), pages 1-15, November.
    4. Reimer, Jeffrey J., 2021. "An investigation of log prices in the U.S. Pacific Northwest," Forest Policy and Economics, Elsevier, vol. 126(C).
    5. Mittal, S & Hariharan, VK & Subash, SP, 2018. "Price volatility trends and price transmission for major staples in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 31(1).
    6. Jales, Mário, 2010. "How Would A Trade Deal On Cotton Affect Exporting And Importing Countries?," WTO Doha Round 320115, International Centre for Trade and Sustainable Development (ICTSD).

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