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GTAP Resource #2366

"Liberalising Border Trade: Implications for Domestic Agricultural Markets of India"
by Chadha, Rajesh, Devender Pratap and Anjali Tandon


Abstract
Indian agricultural markets are likely to get affected through various re-adjustments in the output-vector as it exists before and after trade liberalisation both at global and Indian borders. Dismantling of tariff barriers on rice and wheat partially mimic dismantling of STE operations in their domestic and import markets. We have conducted hypothetical simulations on various combinations of trade liberalisation experiments in primary and processed agricultural sectors across the high-income and developing countries/regions of the world. We have also experimented with alternatives for India in which it chooses or not to liberalise its own markets to provide market access. While complete global agricultural trade liberalisation would raise global welfare along with rise in welfare of most of the countries/regions of the world it may affect farmers in these countries/regions in different ways. The resources would get re-allocated with obvious consequence of creating gainers and losers in the process. In the case of India, while there are expected to be gains in the consumer welfare the farmers growing oilseeds, vegetables and fruits and the output of edibles oils may get adversely affected. On the contrary the rice, wheat and other grain outputs are expected to gain. India’s opening up of its own agricultural markets would bring in welfare gains particularly when the processed agricultural product markets are liberalised. It might lead to substitution of crops away from vegetables, fruits and oilseeds into grains and animal husbandry. However, there is some trade-off between consumer welfare and farmers’ interests. There may thus be the need to continue using relatively high protection on oilseeds, vegetables and fruits, and edible oils till the productivity levels rise or crop substitution takes place. An important result is that India would become relatively competitive in animal husbandry and producing meat products.



Resource Details (Export Citation) GTAP Keywords
Category: 2007 Conference Paper
Status: Published
By/In: Presented at the 10th Annual Conference on Global Economic Analysis, Purdue University, USA; To be published by Kluwer Law International as a book chapter
Date: 2007
Version: Final (slightly modified title)
Created: Chadha, R. (4/14/2007)
Updated: Batta, G. (10/10/2007)
Visits: 2,025
- Economic growth
- Dynamic modeling
- Asia (East)


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