Speaker: Dr Digvijay Singh Negi, IGIDR, Mumbai
Date & Hour: 25 September 2019, 4:15 pm
Venue: Seminar Hall 1
Title: Market Access, Policies and Agricultural Transformation: Evidence Using Disaggregated Data from India
Abstract: Inter alia, diversification of agriculture in favor of high-return cash crops is considered an important pathway for sustainable improvements in agricultural productivity and agriculture-based livelihoods. In this paper, using highly spatially disaggregated data we study structural changes in Indian agriculture in terms of product diversification and commercialization in the presence of policy-induced market distortions. Indian agriculture is quite heterogeneous in topography, climatic conditions, crops, and market access. We take this heterogeneity into consideration in our analysis by using data on cropping pattern for 4707 tehsils (the administrative units below district) from across the country; and by constructing a measure of market access based on the distance of these tehsils from 494 major urban cities and their income levels. Our findings indicate that market access is critical in inducing diversification, more so on small farms, in favor of high-value cash crops such as vegetables and oilseeds that are perishable and require processing. Nonetheless, the policy-induced distortions in agri-food markets in the form of procurement of cereals, mainly rice and wheat, at government-determined minimum support prices discourage diversification even in the presence of market access.