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Agricultural diversification in India and role of urbanization

  • Rao, P. Parthasarathy
  • Birthal, P. S.
  • Joshi, P. K.
  • Kar, D.

Indian agriculture is diversifying during the last two decades towards High-Value Commodities (HVCs) i.e., fruits, vegetables, milk, meat, and fish products. The pace has been accelerated during the decade of 1990s. HVCs account for a large share in the total value of agricultural production. Supply and demand side factors coupled with infrastructural development and innovative institutions drive these changes. In this paper, the focus is on diversification towards HVCs in the context of urbanization. Group of urban districts (districts with >1.5 million urban population) have a higher share of HVCs compared to the urban-surrounded (near urban districts) and other districts (districts in the hinterland). Among the HVCs, vegetables and meat products have a higher share in urban districts compared to the other two groups. Milk production is more widespread due to excellent network of co-operatives and infrastructure facilities. Using GIS (geographic Information System) approach it was found that urban-surrounded districts with better road network connection to urban centers have been able to diversify towards HVC's to meet the demand in the urban centers. Model results further confirm these findings. Thus, urbanization is a strong demand side driver promoting HVCs. Since urban population is growing at more than 3% per annum, demand for HVCs will drive their production. The analysis has also brought out regional variations in HVCs across different districts in the country that has implications on regional development and planning, and consequently on public and private sector investment strategies.

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Paper provided by International Food Policy Research Institute (IFPRI) in its series MTID discussion papers with number 77.

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Date of creation: 2004
Date of revision:
Handle: RePEc:fpr:mtiddp:77
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  1. Prabhu Pingali & Yasmeen Khwaja, 2004. "Globalization of Indian Diets and the Transformation of Food Supply Systems," Working Papers 04-05, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  2. Priya Deshingkar & Usha Kulkarni & Laxman Rao & Sreenivas Rao, 2003. "Changing Food Systems in India: Resourcesharing and Marketing Arrangements for Vegetable Production in Andhra Pradesh," Development Policy Review, Overseas Development Institute, vol. 21(5-6), pages 627-639, December.
  3. Joshi, P.K. & Gulati, Ashok & Birthal, Pratap S. & Tewari, Laxmi, 2003. "Agriculture diversification in South Asia," MSSD discussion papers 57, International Food Policy Research Institute (IFPRI).
  4. Peter Kennedy, 2003. "A Guide to Econometrics, 5th Edition," MIT Press Books, The MIT Press, edition 5, volume 1, number 026261183x, June.
  5. Pingali, Prabhu L. & Rosegrant, Mark W., 1995. "Agricultural commercialization and diversification: processes and policies," Food Policy, Elsevier, vol. 20(3), pages 171-185, June.
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