Aaditya Mattoo, Deepak Mishra and Ashish Narain, in the Times of India, on the problem and solution for Indian agriculture:
So, here’s the paradox: the hard-working Indian farmer — one of the world’s low-cost producers — is unable to compete globally.
What is hobbling the Indian giant? A recent World Bank study finds that the biggest problems for India’s horticulture lie outside the sector rather than within it…
Remedying bottlenecks from farm to market is arguably a higher priority than raising farm productivity. Consider this: 20 per cent higher yields will only lower the final price by less than three percentage points.
In contrast, a 20 per cent reduction in transportation costs alone will reduce final prices by as much as 10 percentage points.
In fact, without more efficient logistics, increasing production — through subsidised credit, power and fertilisers — can lead to gluts that hurt rather than help farmers. [TOI]