Reforms in Indian agro-processing and agriculture sectors in the context of unilateral and multilateral trade agreements
In this paper, we explore the potential impacts of trade and investment-related policy reforms on India's agro-processing sector. We consider the direct effects of policy reforms within the processing sector, and the indirect effects on agro-processing of policy reforms in the primary agriculture sector, in the Indian economy as a whole, and in a multilateral framework. Towards this, we develop a 22-sector, 16-region version of the GTAP computable general equilibrium (CGE), global model for our analysis. We find that trade and investment-related reforms in agro-processing together can help the sector to grow. Policy reforms that stimulate investment and help to improve productivity will be crucial in offsetting the contractionary pressures of trade reform alone on the production of processed agricultural products. We also find that indirect effects on agroprocessing from India's policy reforms in other sectors are more important than reforms in agro-processing itself. Our findings argue for an economy-wide perspective when targeting reform or development of the agro-processing sector in India. Compared to trade reform, comprehensive domestic reforms in the agro-processing and agriculture sectors relating to investment are critical for achieving growth in agro-processing. However, while the impacts of trade reform per se seem to be small, trade reform - by ushering in a higher degree of competition - could itself be a stimulus for investment and productivity gains in India. At present, unilateral reforms, especially those that improve productivity in agroprocessing and in primary agriculture, are more important to agro-processing than multilateral trade reforms. Nevertheless, our findings also suggest the importance of pursuing a domestic reform agenda within a multilateral trading strategy that can accommodate the expected economic growth of India and its future role in global markets, with general equilibrium effects on agro-processing.
|Date of creation:||Dec 2006|
|Contact details of provider:|| Postal: Gen. A. K. Vaidya Marg, Goregaon (E), Mumbai 400065|
Phone: (022) 840 0919/20/21
Fax: (022) 840 2752/2026
Web page: http://www.igidr.ac.in
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.:
- Martin, Will & Mitra, Devashish, 1999. "Productivity growth and convergence in agriculture and manufacturing," Policy Research Working Paper Series 2171, The World Bank.
- Parikh, Kirit S. & Narayana, N.S.S. & Panda, Manoj & Kumar, A. Ganesh, 1997. "Agricultural trade liberalization: growth, welfare and large country effects," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 17(1), October.
- Hewings, Geoffrey J. D. & Fonseca, Manuel & Guilhoto, Joaquim & Sonis, Michael, 1989.
"Key sectors and structural change in the Brazilian economy: A comparison of alternative approaches and their policy implications,"
Journal of Policy Modeling,
Elsevier, vol. 11(1), pages 67-90.
- Hewings, Geoffrey J.D. & Fonseca, Miguel A. & Guilhoto, Joaquim José Martins & Sonis, Michael, 1989. "Key sectors and structural change in the Brazilian economy: a comparsion of alternative approaches and their policy implications," MPRA Paper 54761, University Library of Munich, Germany.
- Parikh, Kirit S. & Narayana, N. S. S. & Panda, Manoj & Kumar, A. Ganesh, 1997. "Agricultural trade liberalization: growth, welfare and large country effects," Agricultural Economics, Blackwell, vol. 17(1), pages 1-20, October.
- Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, November. Full references (including those not matched with items on IDEAS)