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The transformation of the Indian agricultural input industry: has it increased agricultural R&D?

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  • Carl E. Pray
  • Latha Nagarajan

Abstract

Indian agricultural input industries have gone through a major transformation in the last 40 years. State owned firms grew during the Green Revolution and then stagnated or declined. Indian corporations that were protected from foreign competition are now exporters of agricultural tractors and pesticides. Foreign multinational corporations are rapidly increasing their role in the seed, pesticide, and tractor industries. Entry by large Indian firms and multinationals has increased competition in the input industries. Private agribusiness R&D in India grew from $23 million in 1985 to $250 million in 2009 in 2005 US dollars. This is the same time period as a transformation in the agricultural input industry, rapid growth in demand for agricultural inputs, breakthroughs in information technology and biotechnology, and changes in intellectual property rights. An econometric model was used to test whether the transformation of agricultural input industry was a major factor in the growth of R&D expenditure or not. This article analyzes a unique, firm level sales and R&D data set from the seed, pesticide, tractor, and fertilizer industries in 2000–2009. The estimated model indicates that agribusiness firms' R&D expenditures from 2000 to 2009 were positively related to variables associated with industry transformation such as firm size, ownership by multinationals, and declining industry concentration. The model also indicates that strengthening patent policy as well as growth in the size of research-intensive industries like the seed industry contributed to the growth of agribusiness R&D in India.

Suggested Citation

  • Carl E. Pray & Latha Nagarajan, 2014. "The transformation of the Indian agricultural input industry: has it increased agricultural R&D?," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 145-156, November.
    • Handle: RePEc:bla:agecon:v:45:y:2014:i:s1:p:145-156
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    References listed on IDEAS

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    1. Pray, Carl E. & Ramaswami, Bharat & Kelley, Timothy, 2001. "The impact of economic reforms on R&D by the Indian seed industry," Food Policy, Elsevier, vol. 26(6), pages 587-598, December.
    2. Schimmelpfennig, David E. & Pray, Carl E. & Brennan, Margaret F., 2004. "The impact of seed industry concentration on innovation: a study of US biotech market leaders," Agricultural Economics, Blackwell, vol. 30(2), pages 157-167, March.
    3. Nagarajan, Latha & Pray, Carl E., 2012. "Innovation and research by private agribusiness in India:," IFPRI discussion papers 1181, International Food Policy Research Institute (IFPRI).
    4. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
    5. Pray, Carl E. & Fuglie, Keith O., 2001. "Private Investment In Agricultural Research And International Technology Transfer In Asia," Agricultural Economic Reports 33927, United States Department of Agriculture, Economic Research Service.
    6. Ashok Kotwal & Bharat Ramaswami & Wilima Wadhwa, 2011. "Economic Liberalization and Indian Economic Growth: What's the Evidence?," Journal of Economic Literature, American Economic Association, vol. 49(4), pages 1152-1199, December.
    7. Fuglie, Keith O. & Heisey, Paul W. & King, John L. & Day-Rubenstein, Kelly & Schimmelpfennig, David & Wang, Sun Ling, 2011. "Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide: Executive Summary," Economic Information Bulletin 291936, United States Department of Agriculture, Economic Research Service.
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    1. Bhattarai, Madhusudan & Joshi, Pramod Kumar & Shekhawa, R. S. & Takeshima, Hiroyuki, 2017. "The evolution of tractorization in India’s low-wage economy: Key patterns and implications," IFPRI discussion papers 1675, International Food Policy Research Institute (IFPRI).
    2. Heng, Dora, 2015. "Incentives, Institutions and Investment in Private Agricultural Reasearch in Asia," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 2015, pages 1-25.
    3. Anderson Jock R. & Birner Regina & Nagarajan Latha & Naseem Anwar & Pray Carl E., 2021. "Private Agricultural R&D: Do the Poor Benefit?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 19(1), pages 3-14, May.
    4. Anna Jessop & Nicole Wilson & Michal Bardecki & Cory Searcy, 2019. "Corporate Environmental Disclosure in India: An Analysis of Multinational and Domestic Agrochemical Corporations," Sustainability, MDPI, vol. 11(18), pages 1-33, September.
    5. SJ, Balaji & Pal, Suresh, 2021. "Agricultural Productivity, Pay-Gap, and Non-Farm Development: Contribution to Structural Transformation in India," 2021 Conference, August 17-31, 2021, Virtual 315213, International Association of Agricultural Economists.
    6. Pepijn Schreinemachers & Julie Howard & Michael Turner & Simon N. Groot & Bhupen Dubey & Learnmore Mwadzingeni & Takemore Chagomoka & Michael Ngugi & Victor Afari-Sefa & Peter Hanson & Marco C. S. Wop, 2021. "Africa’s evolving vegetable seed sector: status, policy options and lessons from Asia," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(3), pages 511-523, June.
    7. Arun Jaitley, 2018. "Economic Survey 2017: Volume I, Chapter 8: Transforming Science and Technology in India," Working Papers id:12453, eSocialSciences.
    8. Sunipa Gupta & Bart Minten & N. Chandrasekhara Rao & Thomas Reardon, 2017. "The Rapid Diffusion of Herbicides in Farming in India: Patterns, Determinants, and Effects on Labor Productivity," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(3), pages 596-613, July.
    9. Charity Ruramai Nhemachena & Johann F. Kirsten & Binganidzo Muchara, 2019. "The Effects of Plant Breeders’ Rights on Wheat Productivity and Varietal Improvement in South African Agriculture," Sustainability, MDPI, vol. 11(12), pages 1-16, June.
    10. Rada, Nicholas E. & Schimmelpfennig, David E., 2015. "Propellers of Agricultural Productivity in India," Economic Research Report 262202, United States Department of Agriculture, Economic Research Service.
    11. Chandra S. R. Nuthalapati & Chaitanya Nuthalapati, 2021. "Has Open Innovation Taken Root in India? Evidence from Startups Working in Food Value Chains," Circular Economy and Sustainability, Springer, vol. 1(4), pages 1207-1230, December.
    12. Nicholas Rada & David Schimmelpfennig, 2018. "Evaluating research and education performance in Indian agricultural development," Agricultural Economics, International Association of Agricultural Economists, vol. 49(3), pages 395-406, May.

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