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Aggregate Supply Responses in Indian Agriculture: Some Empirical Evidence and Policy Implications

Author

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  • T. Palanivel

    (Institute of Economic Growth)

Abstract

To what extent the current adjustment programs can rely on price instruments for bringing about structural change in the agricultural sector depends on how large aggregate agricultural supply response is to changes in agricultural terms of trade. While this paper shows that the elasticity of aggregate agricultural output with respect to the agricultural terms of trade is positive and statistically significant, it also brings out the fact that non-price factors are equally if not more important. Thus, it appears necessary that price incentives need to be substantially supplemented by a well balanced package of government instruments including promotion of technology and infrastructural investments.

Suggested Citation

  • T. Palanivel, 1995. "Aggregate Supply Responses in Indian Agriculture: Some Empirical Evidence and Policy Implications," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 30(2), pages 251-263, July.
  • Handle: RePEc:dse:indecr:v:30:y:1995:i:2:p:251-263
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    Cited by:

    1. Ndayitwayeko, W-M. & Odhiambo, M.O. & Nyangweso, P.M. & Korir, M.K., 2012. "Determinants of Beef Meat Supply in Burundi: A Vector Error Correction Model Approach Applied to structural Nerlov Paradign," 2012 Eighth AFMA Congress, November 25-29, 2012, Nairobi, Kenya 159414, African Farm Management Association (AFMA).
    2. Rao, N. Chandrasekhara, 2004. "Aggregate Agricultural Supply Response in Andhra Pradesh," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 59(1).
    3. Surajit Deb, 2002. "The Debate on Agriculture-Industry Terms of Trade in India," Working papers 109, Centre for Development Economics, Delhi School of Economics.
    4. Ranjan Paltasingh, Kirtti & Goyari, Phanindra, 2013. "Supply Response in Rainfed Agriculture of Odisha, Eastern India: A Vector Error Correction Approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 14(2), June.

    More about this item

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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