Metadata
Title:
Managing agricultural price risk: implications for India
Series:
Reports to clients
Series Issue:
April 2014
Publication Date:
30/04/2014
Description:
Overview The project Managing agricultural price risk: implications for India is a capacity building project between ABARES and the National Centre for National Centre of Agricultural Economics and Policy Research (NCAP) in New Delhi, India. The project was supported under AusAID's Public Sector Linkages Program. The objective of the ABARES/NCAP project is to develop a model to undertake analysis of Indian agristaples policies which have been designed to address agricultural price risk. Agristaples are staple food products essential for the nutritional wellbeing of a population. In India, the principal agristaples are wheat and rice. Three reports have been produced for this project. The first, Indian agricultural policy-A brief summary provides a brief overview of the key agristaples policies modelled in the ABARES/NCAP agristaples CGE model. The second, The ABARES/NCAP agristaples CGE model-Illustrative results for India presents simulation results from the economic model developed as part of the project's main objective. The third report, Appendix: Documentation of the ABARES/NCAP agristaples CGE model for India, is the technical appendix for the ABARES/NCAP model. Key Issues * Despite undergoing significant economic growth over the past decade, poverty and hunger remain significant challenges in India. * Ensuring food security for its people is an important policy objective of the Indian Government. To that end, numerous agristaples policies exist which reduce the adverse effects on producers and consumers from significant changes in the prices of agristaples. These policies are described in the first report, Indian agricultural policy-A brief summary . * The ABARES/NCAP agristaples computable general equilibrium (CGE) model was developed to undertake analysis of the effects of a change in agristaples prices on different components of the Indian economy over the long term. The technical features of the model are described in the Appendix: Documentation of the ABARES/NCAP agristaples CGE model for India . * The simulation analysis sets up scenarios that impose long-term price changes to the markets for agristaples (wheat and rice). These price changes include a 50 per cent increase and decrease to domestic agristaples prices and a 50 per cent increase and decrease to foreign agristaples prices. * Each of the four price changes are imposed on three different policy environments. These include the existing Indian policy environment, which is protected by both domestic and trade agristaples policies; an environment where only domestic policies exist because trade reform agristaples has occurred; and an environment where there are neither domestic or trade policies supporting agristaples markets. * The long-term effects of the shocks on key economic indicators, such agristaples prices, trade, production, labour use and gross domestic product (GDP), are assessed and compared across the three policy environments. Particular attention is paid to the effect on low-income welfare indicators, including household incomes and agristaple consumption. * The results from the ABARES/NCAP model are consistent with basic economic principles. For an economy as a whole, fully liberalised agristaples markets lead to higher aggregate welfare (in the form of aggregate GDP), compared with policy environments that have only experienced agristaple trade reform or no reform at all. * For low income households, a fully liberalised policy environment leads to higher incomes and higher agristaples consumption over the long term compared with the other two policy environments considered. One exception occurs when domestic agristaple prices increase because consumption is lower given the absence of domestic support.
Resource URL Description:
0 : Indian agricultural policy: A brief summary - MS Word [1.5 MB]

1 : The ABARES/NCAP agristaples CGE model: Illustrative results for India (edited 2014-06-06) - MS Word [2.3 MB]

2 : Appendix: Documentation of the ABARES/NCAP agristaples CGE model for India - MS Word [1.4 MB]

3 : Indian agricultural policy: A brief summary - PDF [1.3 MB]

4 : The ABARES/NCAP agristaples CGE model: Illustrative results for India (edited 2014-06-06) - PDF [2.1 MB]

5 : Appendix: Documentation of the ABARES/NCAP agristaples CGE model for India - PDF [1.4 MB]
Publisher:
ABARES : Australian Bureau of Agricultural and Resource Economics and Sciences : Department of Agriculture
Author:
MOBSBY David

THORPE_Sally Dr

HEYHOE Edwina

GUNNING-TRANT Caroline

HAMSHERE Patrick

PENM Jammie
Right Management:
Use constraints: copyright

Other constraints: Licence base:Copyright

Other constraints: Licence type:Creative Commons Attribution 3.0 Australian Licence (CC By)

Other constraints: Ownership of intellectual property rights: Unless otherwise noted, copyright (and any other intellectual property rights, if any) in this publication is owned by the Commonwealth of Australia (referred to as the Commonwealth). Creative Commons licence: All material in this publication is licensed under a Creative Commons Attribution 3.0 Australia Licence, save for content supplied by third parties, logos and the Commonwealth Coat of Arms.

Other constraints: Indian agricultural policy (and any material sourced from it) should be attributed as: Mobsby, D 2014, Indian agricultural policy-A brief summary, ABARES, Report to client prepared for AusAID Public Sector Linkages Program, Canberra, April. CC BY 3.0. The ABARES/NCAP agristaples CGE model (and any material sourced from it) should be attributed as: Thorpe, S, Gunning-Trant, C, Heyhoe, E, Hamshere, P & Penm, J 2014, The ABARES/NCAP agristaples CGE model–Illustrative results for India, ABARES (Report to client prepared for the AusAID Public Sector Linkages Program, Canberra, April. CC BY 3.0. The Appendix: Documentation of the ABARES/NCAP (and any material sourced from it) should be attributed as: Thorpe, S 2014, Appendix: Documentation of the ABARES/NCAP agristaples CGE model for India. ABARES Report to client prepared for AusAID Public Sector Linkages Program, Canberra, April. CC BY 3.0
Asset Name:
pb_mapriid9abt_20140430_11a