Agricultural Trade Liberalization Reforms: Effects on Indian Agriculture and Agricultural Marketing Institutions

Abstract

Worldwide, Governments have recognized the importance of liberalizing agriculture. The heart of the agriculture reforms lies in the ‘market place’. This is basically a quick, diagnostic study illustrates firstly, the effects of WTO agreements and trade liberalization on Indian agriculture. Secondly, the effects of these reforms on mandates and functions of agricultural marketing institutions vis-à -vis the reforms and reorientation on happening in them in the context of trade liberalization regime in India. WTO agreements have mixed effects on agriculture of developing countries. Economic liberalization/ trade liberalization effects on Indian agriculture suggest that finance to agriculture by private sector has increased significantly. Production of food grains, non-food grains and all crops depicted a declining trend. Supply growth remains higher than growth in demand of cereals, fruits, vegetables except pulses and oilseeds. Marketed surplus and procurement prices of major staple cereals viz; paddy and wheat has shown an increasing trend. Aggregate measure of support (AMS) has decreased. Thus agricultural sector is now less protected and face stiff competition and higher price risks. Most of the functions of different agricultural marketing institutions relate to market regulation, development of infrastructure and administered prices are overlapping. The reforms in major areas of agricultural marketing sector at country level are matching with WTO liberalization requirements particularly in domestic markets, export and import, regulated markets, SPS measures and TRIPS. Some of the typical informal liberalized model markets such as alternative markets are already in operation. But some marketing institutions have been proactive in initiating reforms and marching towards commercialization