Incentives needed to improve grain markets in India

Incentives needed to improve grain markets in India

Even after the agricultural reforms of 2002-03, for wheat, rice, and pearl millet farmers in India, grain markets are still pretty sticky. Economists analyzed infrastructure of interstate trade for food-grain crops in three Indian states and found that grain farmers are unable to cash in on India’s market reforms and take advantage of a price difference between two or more markets.

via Agriculture and Food News — ScienceDaily:

Even after the agricultural reforms of 2002-03, for wheat, rice, and pearl millet farmers in India, grain markets are still pretty sticky. Two University of Illinois economists analyzed infrastructure of interstate trade for food-grain crops in three Indian states and found that grain farmers are unable to cash in on India’s market reforms and take advantage of a price difference between two or more markets.”We wanted to see if there was more integration in the markets since the 2002 reforms,” said Kathy Baylis. “We were surprised at how little integration we saw. Apparently there are still a lot of regulations in place. A lot of the wholesale markets are not open other than right around harvest. There is a strong incentive to sell at harvest because if you don’t you’d have to travel to Delhi or another major city. The ADM Institute for the Prevention of Postharvest Loss that provided the funding for this research is interested in storage, and what we found in India is that there was a huge disincentive to invest in on-farm storage because even if farmers could store their grain for six months or so, they wouldn’t be able to sell it then.”Baylis explained that, prior to the reforms of the early 2000s it was difficult in India to transport grain across state lines. The reforms made that easier and also expanded the number of people who could purchase and trade grain. Farmers used to have to go through a long, arduous process to become certified. The reforms eliminated some of those issues, but other problems still plague the system.”Some people may think of this as only an engineering problem,” Baylis said, “where we just need to develop a really good place for them to store the grain. …

For more info: Incentives needed to improve grain markets in India

Agriculture and Food News — ScienceDaily

Incentives needed to improve grain markets in India

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