Agricultural Policies in India

image of 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.



Making India food secure while ensuring farmer income security in an inclusive and sustainable manner

The chapter describes the food security policy instruments used in India, with a focus on the Targeted Public Distribution System (TPDS). Scenarios developed for the purposes of this report examine what would happen over the medium term if the TPDS remains in place compared to a situation where the public grain distribution is gradually and partially replaced by cash transfers. The analysis shows that significant benefits could accrue, across many dimensions of policy performance. As India’s TPDS is also used to support producer incomes, special attention is given to what reforms are needed to ensure producer incomes do not suffer as a result of policy moves to enhance the effectiveness and efficiency of the TPDS.


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