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Effect of Trade Liberalization on the Efficiency of Indian Dairy Industry

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Authors
Kannan, Elumalai; Birthal, Pratap S.
Issue Date
2010-06
Publisher
Institute of International Affairs, Graduate School of International Studies, Seoul National University
Citation
Journal of International and Area Studies, Vol.17 No.1, pp. 1-15
Keywords
Trade liberalizationDairy industryTechnical efficiency
Abstract
India is the largest producer of milk, and milk is the second largest agricultural commodity after rice in terms of its contribution to agricultural gross domestic product. Having achieved selfsufficiency in milk production, the emphasis now is shifting towards value addition to improve the share of dairy products in global trade, which hitherto has remained negligible. Most of the Indian dairy products are not export competitive. The lack of competitiveness is often attributed to inefficiency in the processing industry. Further, the international diary markets, remains distorted due to protectionist policies followed in the developed world. Under such a situation India has a daunting task to make its presence felt in the world market. Using data from Annual Survey of Industries, this study has analyzed the effects of trade liberalization on performance of dairy industry. Technical and scale efficiency were estimated using non-parametric approach called Data Envelopment Analysis (DEA). The effect of economic reforms on dairy industry was measured in terms of association between the effective protection coefficient and performance indicators of the industry. Except the employment, other indicators such as gross output, net value added, capital and labour productivity and technical and scale efficiency were negatively correlated with the protection level. This indicates that dismantling the protection structures would help improve the performance of the dairy industry.
ISSN
1226-8550
Language
English
URI
http://hdl.handle.net/10371/96486
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Graduate School of International Studies (국제대학원)Dept. of International Studies (국제학과)Journal of International and Area StudiesJournal of International and Area Studies vol.17 (2010)
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