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Reforms in Indian agro-processing and agriculture sectors in the context of unilateral and multilateral trade agreements

Author

Listed:
  • A. Ganesh-Kumar

    (Indira Gandhi Institute of Development Research)

  • Manoj K. Panda

    (Indira Gandhi Institute of Development Research)

  • Mary E. Burfisher

    (Economic Research Services, United States Department of Agriculture)

Abstract

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.

Suggested Citation

  • A. Ganesh-Kumar & Manoj K. Panda & Mary E. Burfisher, 2006. "Reforms in Indian agro-processing and agriculture sectors in the context of unilateral and multilateral trade agreements," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-011, Indira Gandhi Institute of Development Research, Mumbai, India.
    • Handle: RePEc:ind:igiwpp:2006-011
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    References listed on IDEAS

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    1. Martin, Will & Mitra, Devashish, 1999. "Productivity growth and convergence in agriculture and manufacturing," Policy Research Working Paper Series 2171, The World Bank.
    2. Sanjaya Acharya, 2015. "Trade Liberalization," Palgrave Macmillan Books, in: Jens Hölscher & Horst Tomann (ed.), Palgrave Dictionary of Emerging Markets and Transition Economics, chapter 20, pages 393-412, Palgrave Macmillan.
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    Citations

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    Cited by:

    1. Manoj Panda & A. Ganesh-Kumar, 2008. "Trade Liberalization, Poverty and Food Security in India," Trade Working Papers 22410, East Asian Bureau of Economic Research.
    2. A. Ganesh-Kumar & Ashok Gulati & Ralph Cummings, Jr, 2008. "Reforming foodgrains management: Achieving food security with cost-effectiveness," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-027, Indira Gandhi Institute of Development Research, Mumbai, India.
    3. McDonald, Scott & Thierfelder, Karen & Robinson, Sherman, 2008. "Leveling the Global Playing Field: Taxing Energy Use and Carbon Emissions," Conference papers 331766, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Manoj K. Panda & A. Ganesh Kumar, 2008. "Trade liberalization, poverty and food security in India abstract: This paper attempts to assess the impact of trade," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-013, Indira Gandhi Institute of Development Research, Mumbai, India.
    5. Shutes, Lindsay & Ganesh-Kumar, Anand & Meijerink, Gerdien W., 2012. "Fluctuating staple prices and household poverty in India," MPRA Paper 40982, University Library of Munich, Germany.
    6. Sandra Polaski et al, 2008. "Policy dilemmas in India: The Impact of changes in agricultural prices on rural and urban poverty," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-012, Indira Gandhi Institute of Development Research, Mumbai, India.
    7. Landes, Maurice R. & Burfisher, Mary E., 2009. "Growth and Equity Effects of Agricultural Marketing Efficiency Gains in India," Economic Research Report 55959, United States Department of Agriculture, Economic Research Service.
    8. Paltsev, Sergey & Karplus, Valerie & Reilly, John, 2008. "Incorporating Household Transportation Sector into a General Economic Equilibrium Model: Implications for Climate Policy," Conference papers 331700, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    9. Grant, Jason H. & Hertel, Thomas W. & Rutherford, Thomas F., 2008. "Dairy Trq Liberalization: Contrasting Bilateral and Most Favored Nation Reform Options," Conference papers 331733, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.

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    More about this item

    Keywords

    Agriculture; Agro-processing; Trade agreements; CGE models;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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