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The Debate on Agriculture-Industry Terms of Trade in India


  • Surajit Deb

    (Ram Lal Anand College (Evening))


In this paper, we focus on the vast literature that involved analysis of the agriculture-industry terms of trade in India. We first state the key policy issues that are found to be associated with changes in terms of trade variable, and subsequently discuss specific issues concerning the empirical estimation of agricultural terms of trade. We find that the barter terms of trade measure may not only be subject to an aggregation error associated with the index number construction, but is also exposed to the aggregation problems of empirical estimation. We also undertake a set of statistical tests to examine the difference among various agricultural net barter terms of trade series on India. The results indicate that in spite of the methodological differences, the alternate series reflect similar attributes over comparable time periods.

Suggested Citation

  • Surajit Deb, 2002. "The Debate on Agriculture-Industry Terms of Trade in India," Working papers 109, Centre for Development Economics, Delhi School of Economics.
  • Handle: RePEc:cde:cdewps:109

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    References listed on IDEAS

    1. 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.
    2. Dantwala, M.L., 1967. "Incentives and Disincentives in Indian Agriculture," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 22(2).
    3. Datt, Gaurav & Ravallion, Martin, 1997. "Macroeconomic Crises and Poverty Monitoring: A Case Study for India," Review of Development Economics, Wiley Blackwell, vol. 1(2), pages 135-152, June.
    4. Rangarajan, C., 1982. "Agricultural growth and industrial performance in India:," Research reports 33, International Food Policy Research Institute (IFPRI).
    5. Schiff, Maurice & Montenegro, Claudio E, 1997. "Aggregate Agricultural Supply Response in Developing Countries: A Survey of Selected Issues," Economic Development and Cultural Change, University of Chicago Press, vol. 45(2), pages 393-410, January.
    6. Pesaran, M Hashem & Pierse, Richard G & Kumar, Mohan S, 1989. "Econometric Analysis of Aggregation in the Context of Linear Prediction Models," Econometrica, Econometric Society, vol. 57(4), pages 861-888, July.
    7. Ghose, A K, 1989. "Rural Poverty and Relative Prices in India," Cambridge Journal of Economics, Oxford University Press, vol. 13(2), pages 307-331, June.
    8. Rao, J. Mohan, 1989. "Getting agricultural prices right," Food Policy, Elsevier, vol. 14(1), pages 28-42, February.
    9. Lee, Kevin C & Pesaran, M Hashem & Pierse, Richard G, 1990. "Testing for Aggregation Bias in Linear Models," Economic Journal, Royal Economic Society, vol. 100(400), pages 137-150, Supplemen.
    10. Madan, B.K., 1958. "Presidential Address," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 13(1).
    11. Stoker, Thomas M, 1993. "Empirical Approaches to the Problem of Aggregation Over Individuals," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1827-1874, December.
    12. Martin Ravallion & Gaurav Datt, 1996. "India's Checkered History in Fight against Poverty: Are There Lessons for the Future?," Monash Economics Working Papers archive-33, Monash University, Department of Economics.
    13. N. Jayaram & Surendra K. Gupta & A.P. Barnabas & Sachchidananda & P.S. Pachauri & M.L. Khattar & B.N. Sampath & H. R. Khanna, 1985. "India," India Quarterly: A Journal of International Affairs, , vol. 41(1), pages 177-179, January.
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    Cited by:

    1. Surajit Deb, 2002. "Terms of Trade in a Multi-Sectoral Framework: Analysis for All-India and States," Working papers 112, Centre for Development Economics, Delhi School of Economics.

    More about this item


    agricultural linkage; price policy; index number and aggregation; non-parametric methods.;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation


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