Income policies for farmers - India : latest developments

摘要

In India, milk is the single largest agricultural commodity and contributes about 8 percent to the National GDP. Ownership of dairy animals is more evenly distributed among the rural farmers than land and therefore economic growth in dairying leadsto more equitable distribution of farmer incomes. Keeping in view the limited land resources and a large human and bovine population, dairying in India is based on feeding of agriculture crop residues and is therefore largely a low input low output dairysystem. Milk production in India is growing at over 4 per cent per annum. Producer milk prices are growing at over 3 per cent per annum. However, lack of purchasing power of a substantial number of Indians may reduce this growth rate in future. All quantitative restrictions on import of dairy commodities have now been lifted and import duties are at reasonable levels. Because of the integration with World Dairy economy, policies followed elsewhere in the World would have as much impact as the domesticpolicies on farmer incomes. Producer support and export subsidies in OECD countries are very high, hi 1998, the total value was twice the value of the milk produced in India even though India is the largest producer of milk in the World. Both UNCTAD andthe World Bank have acknowledged that such policies of the developed countries harm producer incomes in the developing countries. On the contrary, India does not maintain such high levels of support and the prices and thus farmer incomes are by and largedetermined by the market.