AGRICULTURAL SUBSIDIES AND FOOD SECURITY: A COMPARATIVE ANALYSIS OF INDIA AND CHINA

K.B. RAMAPPA¹*, A.V. MANJUNATHA^2
1Department Agricultural Development and Rural Transformation Centre (ADRTC), Institute for Social and Economic Change (ISEC), Bangalore, India
²Department Agricultural Development and Rural Transformation Centre (ADRTC), Institute for Social and Economic Change (ISEC), Bangalore, India
* Corresponding Author : ramappa@isec.ac.in

Received : 08-02-2016     Accepted : 17-02-2016     Published : 07-03-2016
Volume : 8     Issue : 7       Pages : 1057 - 1063
Int J Agr Sci 8.7 (2016):1057-1063

Keywords : Agricultural Subsidies, Subsidies and food security, Comparative analysis of India and China, Agriculture in India and China
Academic Editor : Ahmed-medhat Mohamed Al-naggar
Conflict of Interest : None declared
Acknowledgements/Funding : None declared
Author Contribution : None declared

Subsidy is one of the most common agricultural protection policy tool employed by the developing countries, as agriculture remains the important sector for overall development of the economy. In recent years, increased agriculture protection and its impact on agricultural trade have attracted attention at the global level. After the introduction of macro economic liberalization, both India and China have implemented a series of agricultural policy reforms to expand their agricultural sector and increase farm income. Notwithstanding, level of agricultural subsidy has grown overtime in both the countries, but not at the level of developed countries such as the USA, Canada, Japan and European Union. High subsidies in developed countries protect the market in these countries from producers in other countries who are relatively efficient. This protection, which favours a small number of large farmers and farm corporations, aiming at over production. The excess production is then dumped on the world market. The cheap subsidised products drive down world prices and badly affect the chances of developing countries earning from export of agricultural commodities and products. Although, the growth of agriculture subsidies over the years shows an outstanding increase in absolute terms in both countries (except few years in the middle). However, share in agriculture GDP found declined in India after the WTO accession whereas in case of China its share has increased tremendously. With this background, In this paper comparison is made between Indian and Chinese agricultural subsidies and its impacts on macroeconomic indicators and agricultural development. Finally, challenges faced and lessons learnt from each others' experiences is presented.