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Do Agricultural Marketing Laws Matter for Rural Growth? Evidence from the Indian States

Author

Listed:
  • Purnima PUROHIT

    (The Adam Smith Business School, University of Glasgow, UK)

  • Katsushi S. Imai

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan, and Department of Economics, The University of Manchester, UK)

  • Kunal Sen

    (The Global Development Institute, University of Manchester, UK)

Abstract

This article examines effects of the regulatory framework of post-harvest agricultural markets on agricultural growth across Indian states over the period 1970-2008. We propose a new measure that captures various legislative dimensions of a key ‘Act’ - the Agricultural Produce Markets Commission (APMC) Act and Rules - governing the agricultural markets, evolved from the dismal colonial history of India, and use this measure to estimate growth models using panel methods. We have applied Fixed-Effects, Feasible Generalized Least Squares, and Fixed-Effects Instrumental Variable models to the panel data to address the endogeneity associated with the regulatory framework. Our results show that the Act significantly promotes not only agricultural growth but the use and the adoption of agricultural technology. Evidence presented suggests that a policy to remove market regulation rather than advancing effective ones would fail consequentially to draw investments and improve agriculture growth.

Suggested Citation

  • Purnima PUROHIT & Katsushi S. Imai & Kunal Sen, 2017. "Do Agricultural Marketing Laws Matter for Rural Growth? Evidence from the Indian States," Discussion Paper Series DP2017-17, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2017-17
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2017-17.pdf
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    References listed on IDEAS

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    Cited by:

    1. Chandra Sekhara Rao Nuthalapati & Yogesh Bhatt & Susanto K Beero, 2020. "Is the Electronic Market the Way Forward to Overcome Market Failures?," IEG Working Papers 387, Institute of Economic Growth.
    2. Bisena, J & Kumar, R, 2018. "Agricultural marketing reforms and e-national agricultural market (e-NAM) in India: a review," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 31(2).

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    More about this item

    Keywords

    Law; Regulation; Agricultural markets; Colonial institution; Technology; Economic growth; Panel data; Indian states;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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