Volatility in agriculture commodity prices in India: Impact and macroeconomic and sector-specific policy responses
Journal: Indian Journal of Economics and Development (Vol.9, No. 4)Publication Date: 2013-12-07
Authors : Seema Bathla;
Page : 291-304
Keywords : Agricultural trade; price transmission; volatility; macro economic policies.;
Abstract
Globalization and trade liberalization have exposed agricultural sector of many developing countries to sudden disturbances, caused not just by demand-supply conditions within their economies but also by volatility in global commodity prices, exchange rate and surge in imports. This paper evaluates the magnitude of sensitivity of Indian agriculture to these factors, and explores policy options that may neutralize their adverse effects, maintain price incentives and stability. The analysis is undertaken for one important tradable commodity, wheat by applying a structural econometric model, separately under the exportable and importable scenarios from 198081 to 2009?10. The findings reveal wheat to be increasingly driven by an incentive structure based on its linkages with world price, exchange rate and other factors. Counterfactual simulation experiments indicate that due to trade and sector-specific policies, wheat price and output tend to be much more resilient to fluctuations in international price and other shocks compared to its exports and imports.
Other Latest Articles
- Modified construction of random groups in Rao, Hartley and Cochran’s scheme: To increase its practical applicability
- Trend in foreign direct investment in Indian retail market: Empirical evidence
- Changing patterns of marriage in Indian society
- Comparative assessment of national water policies of India
- SAARC for food security of South Asia
Last modified: 2016-06-13 10:12:14