An econometric model of the agricultural sector of the Indian economy

The interrelationships between production, consumption, and stocks are studied in an interdependent framework for two groups of agricultural commodities, namely foodgrains and nonfoodgrains, with a view to obtain policy guidelines for agricultural growth. The model is formulated with aggregate information over the period 1951–1975 and both static and dynamic simulation along with multiplier analysis are carried out to assess the performance of the model. The study reveals that if there had been no PL 480 aid from the U.S. imports, foodgrain prices would have been higher than observed prices. Ex-ante forecasts to 1985 suggest some need for adequate planning with regard to stockbuilding.