Storage infrastructure and agricultural yield: Evidence from a capital investment subsidy scheme

Somdeep Chatterjee

No 2018-56, Economics Discussion Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: In a developing economy, the availability of storage infrastructure is considered essential for two purposes; the reduction of post-harvest losses resulting in food shortage, and allowing for gains from inter-temporal trade due to potential arbitrage opportunities arising out of volatility in food grain prices. This paper provides empirical evidence on a lesser studied impact of storage infrastructure, viz, agricultural yield. The author exploits potentially exogenous variation generated by the intensity of access to a capital investment subsidy program for construction and renovation of rural godowns in India to identify causal effects of better storage on yield. He finds that the program led to an increase in rice yield by 0.3 tons per hectare, approximately a 20% increase compared to the baseline. A potential mediating channel for such an effect would be reduced storage costs facilitating better investments in productive inputs. As supportive evidence, the author finds that fertilizer consumption increased by 21% in response to the intervention.

Keywords: storage; yield; fertilizer consumption; Grameen Bhandaran Yojana (search for similar items in EconPapers)
JEL-codes: O12 O13 Q12 Q18 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-agr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://www.econstor.eu/bitstream/10419/180657/1/1027038646.pdf (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwedp:201856

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