ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Deepali S KohliSubscribe to Deepali S Kohli

Self-Sufficiency and Allocative Efficiency in Edible Oils

Self-Sufficiency and Allocative Efficiency in Edible Oils Ashok Gulati Anil Sharma Deepali S Kohli WE welcome the comments by M L Dant wala (EPW, July 6) on our paper "Self Sufficiency and Allocative Efficiency: Case of Edible Oils' (EPW, March 30). Dantwala's major remarks on our paper are the following: (i) We have overlooked the commendable increase in productivity of oilseeds cultivation; (ii) We have ignored a noteworthy feature of the oilseeds economy that incremental production has been contributed mostly by the areas with relatively low irrigation facilities, through the extension of cultivation to fallow lands, substitution of some low- yielding coarse cereals by oilseeds and their cultivation as a catch crop in some areas; (iii) While supporting our argument on excessive price incentives offered to oilseeds producers we used the wholesale price index of edible oils rather than oilseeds and governmentdid not contribute to this relative shift towards oilseed prices; (iv) We have argued against the setting up of Technology Mission on Oilseeds (TMO), the National Oilseeds Development Project (NODP), Oilseeds Production Thrust Project (OPTP) and deliberately chosen market intervention in the oilseeds sector for discussion; and (v) World prices are not a relevant reference point for judging the appropriateness of domestic prices or allocative efficiency.

Self-Sufficiency and Allocative Efficiency-Case of Edible Oils

Case of Edible Oils Ashok Gulati Anil Sharma Deepali S Kohli With the opening up of imports and exports of agricultural commodities, India is likely to experience increasing levels of edible oil imports. Simultaneously, its exports of cereals and cotton may increase substantially. Cropping pattern changes, which had been moving in favour of oilseeds since mid-1980s, may slow down and even reverse in favour of cereals in the coming years. Economically, the nation is going to be a net gainer through these trade policy changes. But 'self-sufficiency' in edible oils would be under threat unless the focus of policy-makers shifts from overplaying with the price instrument to its productivity augmentation.
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