India's agricultural trade
The TAPSIM project improved understanding about the impact of major structural and policy changes in India on global agricultural markets and future trade agreements. The topic is of particular interest given rapid economic developments in India, and the potential implications for international as well as EU–India trade. Researchers conducted a wide range of studies on relevant issues, including trade policies in India and their future outlook. A key challenge for the agricultural sector is the lack of world-class physical infrastructure, which adversely impacts agricultural exports. To attract investments, the policy environment has to encourage and support multi-stakeholder participation in agriculture. This is a pressing issue as agriculture in India has extended beyond farming to activities like logistics, processing and marketing. The team used two simulation models for quantitative analysis of policy impacts: one covering the global economy, and the other the Indian economy. The latter offered insights into sector-specific details such as production structure and domestic policies. It also allowed assessment of trade and agricultural policy impacts on poverty. Spurring agricultural growth is vital for pro-poor development; however, one TAPSIM study showed that in dairy production, for example, there is a pro-rich bias. With some three quarters of India's labour force dependent on agriculture, this situation requires urgent attention. While it implies a faster transition towards a modern society, rapid growth is not poor-inclusive and does not favour agriculture. Supplementary policies are thus required to boost agriculture in a way that will also benefit rural households. Study results underlined the potential of farm technology for increasing production and, generally, the need to reduce input subsidies. However, today's farmers still need to be protected through continued minimum support prices. The TAPSIM study offers a basis for identifying and anticipating future trends. It can also be used to inform the EU–India free trade agreement for optimal benefit on both sides.
Keywords
Agricultural trade, food value chain, policy changes, trade policies, agricultural exports, farming, agricultural policy, poverty, dairy production, farm technology, input subsidy, free trade agreement
