The South Asian countries are gradually diversifying with some inter-country variation in favor of high value commodities, namely fruits, vegetables, livestock and fisheries. Agricultural diversification is strongly influenced by price policy, infrastructure development (especially markets and roads), urbanization and technological improvements. Rainfed areas have benefited more as a result of agricultural diversification in favor of high value crops by substituting inferior coarse cereals. Agricultural diversification is also contributing to employment opportunities in agriculture and increasing exports. The need is to suitably integrate production and marketing of high value commodities through appropriate institutions. Market reforms in developing and strengthening desired institutions through required legal changes would go a long way in boosting agricultural growth, augmenting income of small farm holders and promoting exports.

What are the outcomes for the poor of Vietnam's public safety net? Although centrally mandated, social welfare programs are locally implemented according to local norms and local poverty standards, and are often heavily reliant on local financing. This paper examines the coverage, incidence and horizontal equity of the programs that can be identified in the VNLSS data. The paper looks at the role of location in determining whether the poor are assisted nationally. Dynamic incidence between 1993 and 1998 is explored, as is the degree to which programs performed a safety net function. Coverage and payments to households are found to be low and to have had negligible impact on poverty. The impact of current outlays could in principle also be improved through better targeting. The system was also ineffective in protecting households who were vulnerable to shocks. Finally, although there is a greater concentration of poverty-related programs and household participation in poorer communes, the results suggest that more is spent absolutely and relatively on the poor in richer communes.

World cotton prices have fallen by about 40 percent over the last two years, focusing attention on the effect of subsidies for cotton growers in depressing prices. This paper combines farm survey data from Benin with assumptions about the decline in farmlevel prices to estimate the direct and indirect effects of cotton price reductions on rural income and poverty in Benin. The results indicate that there is a strong link between cotton prices and rural welfare in Benin. A 40 percent reduction in farm-level prices of cotton results in an increase in rural poverty of 8 percentage points in the short-run and 67 percentage points in the long run. Based on the estimated marginal propensity to consume tradable goods, the consumption multiplier is in the range of 3.3, meaning that one dollar of reduced spending by cotton growers results in a contraction of 3.3 dollars in overall demand. Finally, econometric analysis of the determinants of the demand for hired agricultural labor suggests that falling cotton prices will not greatly reduce labor demand since the labor intensity of cotton is similar to that of competing crops in Benin. Overall, the study highlights the link between rising subsidies for cotton growers in the U.S. and rural poverty in cotton exporting countries such as Benin. ii TABLE OF CONTENTS 1.

Using detailed trader surveys in Benin, Madagascar, and Malawi, this paper investigates the presence of increasing returns in agricultural trade. After analyzing margins, costs, and value added, we find little evidence of returns to scale. Motorized transport is found more cost effective for large loads on longer distances. But transporters pool quantities from multiple traders. Margin rates show little relationship with transaction size. Personal travel costs are a source of increasing returns, but the effect is small. Consequently, total marketing costs are nearly proportional to transaction size. Working and network capital are key determinants of value added. Constant returns to scale in all accumulable factors working capital, labor, and network capital -- cannot be rejected. This implies that policies to restrict entry into agricultural trade are neither necessary nor useful. Governments should focus instead on technological and institutional innovations to upgrade agricultural markets. ii TABLE OF CONTENTS 1.

From chronic shortages of milk, India has emerged today as the largest producer of milk in the world crossing 80 million tonnes. This has been achieved largely through a smallholder economy in which Operation Flood, one of the worlds largest dairy development programme, played an important role. All this happened largely under autarkic framework and regulated public policy dictated by import-substitution strategy. Until 1991, the Indian dairy industry was highly regulated and protected through quantitative restrictions (QRs) and stringent licensing provisions. Since early 1990s, India embarked upon liberal policy framework, which got reinforced with the signing of Uruguay Round Agreement on Agriculture (URAA) in 1994. This opening-up increasingly exposed the Indian dairy sector to the global markets, which in-turn are distorted by export subsidies, domestic support and prohibitive tariffs in developed countries. This raises several issues: negotiations, given scores of distortions that plague the world dairy markets? promote its competitiveness in a fast globalizing world? This study responds to these issues by empirically mapping the competitiveness of Indian dairy sector over the period 1975-2000 and delineating policy options for international negotiations and more importantly, domestic policy reforms, given Indias commitments to the WTO. ii TABLE OF CONTENTS I. BACKGROUND ........................................................................................................... 1 II. INDIAN DAIRY SECTOR........................................................................................... 3 Characteristics of Indian Dairy Sector .................................................................... 3 Policy Environment ............

MTID Discussion Papers contain preliminary material and research results, and are circulated prior to a full peer review in order to stimulate discussion and critical comment. It is expected that most Discussion Papers will eventually be published in some other form, and that their content may also be revised. MTID DISCUSSION PAPER NO. 74

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This paper addresses the conceptual issues around the negative price effects of technological change on agricultural producers, explores price policy options vis--vis this problem, and reviews and compares experiences across Asian countries as they transformed their rural economies. It then draws implications for the challenge of achieving a smallholder-led agricultural revolution in Africa in the context of market liberalization. ii TABLE OF CONTENTS I. SETTING THE STAGE ............................................................................................... 1 II. THE PROBLEM OF PRICE VARIABILITY .............................................................. 4 Causes and consequences of price variability ........................................................... 4 III. THE AGRICULTURAL TECHNOLOGY TREADMILL .......................................... 6 Sustainability of technological advance .................................................................... 9 Technological change with semi-subsistence agriculture ....................................... 10 IV. PRICE POLICY OPTIONS........................................................................................ 12 The border price paradigm ...................................................................................... 13 The structuralist approach ....................................................................................... 14 The stabilization school........................................................................................... 15 Price stabilization in asia ......................................................................................... 15 Indonesian experience with BULOG ................................................................. 1...

Rice is the lifeline of almost 70% of the worlds poor residing in Asia, where more than 90% of world rice production and consumption takes place. Rice trade liberalization therefore has tremendous implications for poverty. The world rice market is highly distorted, partly because of the high degree of intervention in rice markets across the world. While poor countries such as Thailand, Vietnam, and India tend to disprotect rice sectors, the rich countries of East Asia (Japan and Korea), Europe, and the United States heavily support their rice producers. As a result, there is great diversity in domestic rice price levels, with very high prices in the latter countries and very low prices in the former. Trade liberalization would thus result in flows from these poorer Asian countries to East Asia and Europe. This is predicted to have beneficial effects for poverty, through producer price increases and second-round effects (wages, employment, and investment) in exporting countries, and to augment short-term food security in poor importing countries. However, if rice trade liberalization is to contribute to poverty alleviation in developing countries, there is a need to streamline distortionary agricultural policies, particularly in developed countries. Also important are behind the border reforms in developing countries aimed at reducing transactions costs for farmers, rationalizing input pricing policies, ensuring access to risk management institutions and safety nets, improving access to food, and combating adverse environmental conditions. In the long run, rice trade liberalization might have to be iv coupled with initiatives to enhance agricultural productivity and rural economic growth to be able to make a dent in poverty. \ 1 RI...

this report, we interchangeably refer to States/ Union Territories as states. 8 Table 2.1Safety Net ProgramsInterventions, Financing Arrangements and Coverage Program/Scheme Volume of Food-Based Transfer Program Interventions A. Targeted Public Distribution System BPL/ APL: 35 kg rice and wheat/ family/ month Price subsidies on rice wheat, sugar, edible oils. 1. Antyodaya Anna Yojna 35 kg of rice and wheat per family classified as poorest of the poor A higher price subsidy on rice and wheat than BPL rates 2. Annapurna Scheme 10 kg/ month/indigent senior citizen Free grain to indigent senior citizens B. Food grain Price Stabilization Food grain procurement and price support, rice and wheat buffer stocks and open market sales at below market prices; Controls on private storage, movement, access to credit, rice milling, external trade C. Food for Work 1.Jawahar Gram Samriddhi Yojana 1 kg of rice or wheat/workday Employment in lean agricultural season for rural workers below poverty line 2. Employment Assurance Scheme 1 kg of rice or wheat/workday 100 days employment during lean agricultural season up to 2 members/family 3. Swarnjayanti Gram Swarozgar Yojana Up to 5 kg grains per person per day Employment at minimum wage, partly paid in kind 4. Food-for-Work Food grains up to 5 kg per man-day Employment in natural calamity areas D. Mid-Day Meals Scheme 3 kg rice or wheat/child/month for 10 mos. Or cooked meal (100gm/day) for 200 days Cooked meal or distribution of food grains to primary schools E. Nutrition Schemes with Food Supplementation 1. Integrated Child Development Services Scheme/ Tamil Nadu Integrated Nutrition 0 to 6 yrs: 300 calories (ready to eat food) + 8-10 gm protein for 300 Malnourish...