EconPapers    
Economics at your fingertips  
 

Food Grain Policies in India and their Implications for Stocks and Fiscal Costs: A Partial Equilibrium Analysis

Marta Kozicka, Matthias Kalkuhl and Jan Brockhaus

FOODSECURE Working papers from LEI Wageningen UR

Abstract: This paper analyzes current and possible future reforms of the Indian food policies of the two most important staple grains, wheat and rice, within a two commodity dynamic partial equilibrium model with stochastic shocks. The model is empirically grounded and reproduces past values well. It uses a new reduced-form approach to capture private storage dynamics. We evaluate implementation of the National Food Security Act (NFSA) under several policy measures with the current regime as well as two scenarios with a regime change - implementation of cash transfers and deficiency payments. Implications for market fundamentals and fiscal costs were simulated in the medium term - until 2020/21. The NFSA puts a high pressure on fiscal costs and public stocks. Relying on imports with low MSPs results in a high stock-out risk and the lowest fiscal costs, however with high domestic price levels and volatility and high international prices. A policy strategy to manipulate procurement prices in order to maintain public stocks close to the norms leads to slightly higher fiscal costs with lower and more stable prices and ample stocks. A cash-based regime can bring considerable savings and curb fiscal costs, particularly if targeted to the poor, and would leave ample stocks due to higher private stocks. However, this scenario shows the highest market price levels and variability, which can have negative effects on some producers and consumers as well as political stability.

JEL-codes: I38 O13 Q02 Q18 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr
Date: 2016-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www3.lei.wur.nl/FoodSecurePublications/WP%2 ... -brockhaus_india.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Working Paper: Food Grain Policies in India and Their Implications for Stocks and Fiscal Costs: A Partial Equilibrium Analysis (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fsc:fspubl:41

Access Statistics for this paper

More papers in FOODSECURE Working papers from LEI Wageningen UR Contact information at EDIRC.
Bibliographic data for series maintained by Barbara van der Hout (). This e-mail address is bad, please contact .

 
Page updated 2019-10-08
Handle: RePEc:fsc:fspubl:41