Economics of India's Agricultural Domestic and International Prices during WTO Regime: Signals and Policies

Abstract

Prices play a great role in living economics. Prices act as signals for shortages and surpluses which help government, firms, consumers to respond to changing market conditions. The study was conducted at NAARM, Hyderabad. The study period was from 1990–91 to 2018–19. Trends, growth rates, terms of trade, instability, elasticities, domestic and international agriculture price analysis were employed for achieving objectives. An increasing trend of MSP has been found in India’s major agricultural crops. Minimum Support Price (MSP) growth rate of pulses were more than cereals and oilseeds. WPI growth rate of pulse crops was greater than the cereal and oilseed crops except sorghum. The variation in WPI of major agricultural commodities in India was stable except sunflower. Consumer food price index has shown more or less linear trends. It indicates Government monitoring food prices stable. The variation in export price of rice and sunflower and import price of sorghum was stable. The study found that India has comparative advantage for rice, gram, groundnut and soybean crops in international markets. The export price elasticities of rice, wheat, gram, groundnut, soybean and sunflower was observed to be marginally higher than their import price elasticities. The findings can be useful to government in designing price fixing mechanism and monetary policy, distortion of prices and control of inflation