An autonomous research institute under the Ministry of Finance


Diagnosing and overcoming sustained food price volatility: Enabling a National Market for Food

Publication date

Jul, 2018


NIPFP Working Paper No. 236


Anirudh Burman, Ila Patnaik, Shubho Roy and Ajay Shah


The agricultural markets in India suffer from high price volatility. There may be an element of a Samuelson Cobweb Model at work, which generates a cycle of boom and bust. When food prices are high, consumers protest and in the years when food prices are low, farmers are in distress and demand loan waivers. Four policy pathways address the cobweb model: storage, national trade, international trade and futures trading. We argue that the Constitution imposes an obligation upon the Union government to achieve a national market. We work out an implementable set of steps through which the Union government can obtain a national market for agricultural produce.

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