Effective Incentives in India’s Agriculture:Case of Coarse Cereals

This study examines the impact of government intervention in coarse cereals markets. Estimates of ‘effective incentives’ measured through protection coefficients for sorghum (jowar) and maize are reported at state level. On an average, at shadow exchange rates, sorghum and maize received low incentives in relation to international prices under importable hypothesis from 1980-81 to 1992-93. Neither of the commodities emerges as efficient exportable. These results imply that coarse cereals economy would not be affected significantly under a free-trade scenario, a situation akin to pulses. These results thus indicate that this is the appropriate time to open up coarse cereals to global markets.