Six Puzzles in Indian Agriculture

A quarter century after India’s historic shift to a more market-oriented economy, the agriculture sector continues to be racked by severe policy distortions, despite its importance for the livelihoods of the majority of India’s population and in addressing major long-term challenges facing the country, from food security to natural resource sustainability. The paper highlights some key empirical realities and data anomalies to raise some fundamental questions about Indian agriculture and anchors the analysis in six major puzzles: prices; procurement; political economy; trade; productivity; and exit. While the list is neither exhaustive nor original in and of itself, these puzzles raise important policy issues. We conclude by arguing that more unified frameworks of analysis are needed for effective policy in a much neglected but crucial sector for securing India’s future. JEL Codes: D43, D45, O1, Q11, Q12, Q13, Q18 Chatterjee: sc20@princeton.edu. Kapur: dkapur@upenn.edu. The authors would like to thank Amarsingh Gawande and Beeban Rai for excellent research assistance.