Trade Competitiveness of Cash Crops in Post-WTO Period in Andhra Pradesh

In Andhra Pradesh, cotton and groundnut are the major cash crops. There are significant changes in the competitiveness of these two crops due to technological and policy environment. This paper examines the trends in area, production, and yield and competitiveness of these two crops in pre- and post-WTO period and their implications for producers, consumer surplus and social cost benefits at state level. Trade competitiveness of groundnut and cotton increased during post-WTO period as revealed from DRC and NPC. In the case of cotton, growth rate in area and production are consistently higher, but negative for groundnut. In the case of cotton, the state had clear competitive advantage and the adoption of Bt cotton varieties raised it further. The state is an efficient and competitive producer of groundnut, but its profitability is adversely affected by fluctuations in prices and yields. Welfare gain was higher in the case of cotton than groundnut due to free markets.