Agricultural Policies in India
This report assesses the performance of agricultural and food policy in India and calculates a set of policy indicators providing a comprehensive picture of agricultural support. These indicators, developed by the OECD, are already used regularly in the analysis of the agriculture and food sector in 51 OECD countries and emerging economies and are now available for India for the first time.
Government intervention in India is found to provide both negative and positive support to agriculture, with market and trade interventions often depressing prices, while subsidies to fertilisers, water, power and other inputs incentivise their use. This reveals the inherent difficulty in attempting to secure remunerative prices and higher incomes for farmers, while at the same time keeping food prices low for consumers. The report also points to policy-induced pressures on natural resources such as water and soil. Detailed recommendations are offered which, if implemented, have the potential to improve farmers' welfare, reduce environmental damage, alleviate some of the pressure on scarce resources, better prepare the sector for climate change, improve food and nutrition security for the poor, improve domestic market functioning and position India to participate more fully in agro-food global value chains.
Foreword
This review of Agricultural Policies in India is one of a series of reviews of national agricultural policies undertaken by the OECD’s Committee for Agriculture (CoAg). The study has been carried out by the Trade and Agriculture Directorate (TAD) of the OECD jointly with the Indian Council for Research on International Economic Relations (ICRIER). It examines the agricultural policy context and the main trends in Indian agriculture. The Review also classifies and measures the support provided to agriculture using the same method the OECD employs to monitor agricultural policies in OECD countries and a growing number of non-member economies, such as Brazil, China, Colombia, Costa Rica, Indonesia, Kazakhstan, the Philippines, Russia, South Africa, Ukraine and Viet Nam. Finally, the study includes a special chapter on the food security policy instruments used in India, with a particular attention to the Targeted Public Distribution System (TPDS). The review is the first stage in a process whereby India will be included in the annual OECD publication Agricultural Policy Monitoring and Evaluation.