Role of terms of trade in Indian agricultural growth: a national and state level analysis
Using time series data, this paper analyses the relative contributions of terms of trade and non-price variables in explaining agricultural growth in recent decades in India. Agricultural growth is largely explained by expansion of irrigation, (which in the model is also a proxy for HYVs and other capital investments), and, until the 1970s, by increases in the net cultivated area. Agricultural output is inelastic, and is becoming increasingly more so over time. The terms of trade was not an important factor in explaining past growth. Even during the late 1960s and early 1970s when the terms of trade improved by 18 percent for agriculture, they only accounted for 15 percent of the growth in output. Increases in agricultural output are also found to worsen the terms of trade for agriculture, despite government attempts to control prices. The results highlight the importance of further investments in agricultural research, extension, irrigation and other supply-enhancing inputs if the ongoing policy reforms in India are to translate into more rapid and sustained agricultural growth.
|Date of creation:||1995|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.ifpri.org/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Krishna, Raj, 1982. "Some Aspects of Agricultural Growth, Price Policy and Equity in Developing Countries," Food Research Institute Studies, Stanford University, Food Research Institute, issue 03.
When requesting a correction, please mention this item's handle: RePEc:fpr:eptddp:15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.