Impacts on India’s Farmers and Processors of Reducing Soybean Import Barriers

Suresh Persaud

No 413454, Miscellaneous Publications from United States Department of Agriculture, Economic Research Service

Abstract: India is the world’s largest importer of soybean oil, despite its high tariff. In the past decade, India’s domestic consumption of soybean meal increased roughly five-fold, leading to sharp decreases in India’s once significant exports of soybean meal. India’s policies prevent imports of oilseeds (the raw material for producing soybean oil and meal), and domestic soybean production has not kept pace with India’s growing demand for these products. This study examines the potential impacts on Indian farmers and processors of reducing barriers to soybean imports. Model-based simulations find that with imported soybeans, processors could more fully utilize their existing crush capacity, reduce their unit costs, and sharply expand their sales volumes and revenues—leading to substantial economic benefits. If India maintains its soybean oil tariff at current levels, imports of soybeans are economically attractive even when subject to a tariff that protects Indian soybean farmers—India could lower its barriers that effectively preclude soybean imports without adversely affecting farmers.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Demand and Price Analysis; Food Consumption/Nutrition/Food Safety; International Relations/Trade; Livestock Production/Industries; Productivity Analysis; Research Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 36
Date: 2019-10
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersmp:413454

DOI: 10.22004/ag.econ.413454

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