IS CHANGE IN CONSUMPTION PATTERN TOWARDS HIGH-VALUE COMMODITIES DRIVING PRODUCTION DIVERSIFICATION IN INDIA?

M. ARUN¹*, P.G. CHENGAPPA², B.N. PRADEEP BABU³, C.G. YADAV^4
1Department of Agricultural Economics, College of Horticulture, Bengaluru, University of Horticultural Sciences, Bagalkot, Karnataka, India
²University of Agricultural Sciences, Vignana Kendra, Bengaluru, Karnataka 560065, India
³Market Intelligence Unit, Coffee Board, Bengaluru, India
⁴Department of Agricultural Economics, College of Horticulture, Sirsi, 581402, University of Horticultural Sciences, Bagalkot, Karnataka, India
* Corresponding Author : arun.muniyappa@gmail.com

Received : 08-07-2017     Accepted : 24-09-2017     Published : 30-09-2017
Volume : 9     Issue : 45       Pages : 4740 - 4746
Int J Agr Sci 9.45 (2017):4740-4746

Keywords : Consumption pattern, monthly per capita expenditure, value of output, production diversification, high-value commodities, consumption elasticity
Academic Editor : Meenakshee Dwivedi
Conflict of Interest : None declared
Acknowledgements/Funding : Author thankful to University of Agricultural Sciences, Bengaluru, India
Author Contribution : All author equally contributed

This paper examines both consumption and production diversification towards high value commodities (HVCs) in India. A clear structural shift in consumption from food grains, particularly cereals, to high-value commodities (HVCs) comprising mainly livestock based foods, horticulture products, and beverages is witnessed in both rural and urban India. Similarly, the increasing share of HVCs accounting for more than half of the total agricultural value of output in the recent decade provides ample evidence of production diversification towards HVCs. Thus, a perceptible positive relationship between the rise in consumption expenditure on HVCs and their production (value of output) is discernible. The determinants of diversification towards HVC estimated through a pooled WLS regression analysis further provided the empirical evidence that changing consumption pattern towards HVCs is distinctly driving production diversification at the national level. Additionally, the structural changes in terms of development of markets, road network, irrigation, technology, urbanization and growing income levels have positively influenced agricultural diversification towards HVCs.

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