New Delhi: India’s trade policy in agriculture has a pro-consumer bias which implicitly taxes farmers by placing export restrictions on different crops, said a joint study released by The World Bank and Delhi-based Indian Council for Research on International Economic Relations (ICRIER) on Tuesday.
Following an analysis of how domestic prices deviate from international prices, the study found that in most years policy makers used restrictive trade policies to keep domestic prices low. “This showed the pro-consumer bias in the policy complex,” the study observed.
“This means that policies more than often harm the farmers’ interests, whose scope of getting higher returns globally are curbed,” it said, adding, “any possibility of price hikes in agriculture in general and food in particular led policy makers to restrict trade.”
Titled ‘Price Distortions in Indian Agriculture’, the study analysed domestic and international prices of 15 commodities for a decade between 2004-05 to 2013-14. The analysis showed that domestic prices were on an average 72% of the time below export parity prices, implying farmers would gain significantly from exports. Read more
Following an analysis of how domestic prices deviate from international prices, the study found that in most years policy makers used restrictive trade policies to keep domestic prices low. “This showed the pro-consumer bias in the policy complex,” the study observed.
“This means that policies more than often harm the farmers’ interests, whose scope of getting higher returns globally are curbed,” it said, adding, “any possibility of price hikes in agriculture in general and food in particular led policy makers to restrict trade.”
Titled ‘Price Distortions in Indian Agriculture’, the study analysed domestic and international prices of 15 commodities for a decade between 2004-05 to 2013-14. The analysis showed that domestic prices were on an average 72% of the time below export parity prices, implying farmers would gain significantly from exports. Read more