Conditions of Agricultural Price Policy and Trade Deterioration

Abstract

Appropriate agricultural policy must offer incentives to farmers to scale up the output and at same time protect interest of consumers. In short term, pricing strategy must offer consistency in harvest prices to bypass uncertainty. The medium-term goalmouth is to achieve consistency in terms of commerce for cultivation to promote speculation in agriculture. It has been experienced that agricultural prices have superior flexibility than industrial pricing both in upswing besides down swing. The increase in the prices of agricultural goods has been definitely smaller than the rise in the prices of commodities in general. If higher and higher procurement costs are set, it may drive up the overall price level. But some connection between what the farmers sell and what they purchase will have to be created, because agricultural inputs have been increasing unnaturally. This study argues that footings of commerce between agricultural in addition to industry alter in the course of economic growth.