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Scales of Balance - Pricing and Procurement in South Asia | 29mins
Director: Babel Press TV | Producer: Global Development Network
Focus Years: 2012 | Country: India
Subject Tags: asia, bangladesh, economies, food, governance, india, livelihood, nepal
Quality Tags: Optimistic, Slow, Activating, Harmonizing
Most countries intervene to some degree in the markets for agricultural inputs and outputs. Governments may set prices directly or offer subsidies to farmers. They may also use tariffs and export taxes to raise revenue and/or to manage domestic prices. Many countries offer subsidized food prices for poor consumers. And frequently governments intervene in the markets for agricultural inputs: It is common to find subsidies for agricultural uses of diesel or fuel, electricity, fertilizer, and credit, not to mention government services such as extension and education. Studies in the 1980s and early 1990s tended to find that most developing countries – and certainly most African and Asian countries – were pursuing pricing policies that had large negative effects on agriculture. Typically these studies argued that the limited subsidies offered to farmers for inputs were far too small to offset the negative effects of cheap food policies and overvaluation of exchange rates. The most egregious pricing policies were largely eliminated in the late 1990s and the period after 2000, partly under pressure from international institutions. However, most countries continue to intervene in agricultural markets, and a lively debate remains on the role of governments in managing domestic prices and food supplies. This issue has come to the fore over the past several years with the spikes in food prices in 2007-08 and in 2010-11. Some governments have responded to price spikes by controlling prices aggressively. Others have tried to create buffer stocks and to manage supply directly as a way to achieve price stability. This research theme will take up a range of questions related to the appropriate role for government in agricultural pricing and procurement.
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