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Power and Irrigation Subsidies in Andhra Pradesh and Punjab in India

There is an inbuilt inefficiency in the current pricing mechanism and measuring system of power for irrigation. In Andhra Pradesh and in many other states in India, the cost of electricity for irrigation for majority of the farmers is fixed per month. It implies that at the margin, farmers incur almost a zero cost for irrigation in the short-run (ignoring depreciation cost due to additional use and marginal labor cost of additional use). Linked to the pricing mechanism is the measurement problem as there is no accurate estimate of actual power consumption in agriculture. Provision of electricity and irrigation at concessions has encouraged inefficient use of a scarce resource and has distorted the inter-temporal resource allocation. This research, therefore, examines the general setting of subsidy in canal irrigation and power for irrigation and using household surveys identifies the beneficiaries and the efficiency losses of irrigation and power subsidies in AP and Punjab. The main objectives are:

Urban Rural Linkages in Bangladesh: Impact of Infrastructure and the Food Value Chain on the Livelihoods and Migration of Landless Households, Women and Girls in the Northwestern Region
(in collaboration with FCN Division)

Despite years of lagging growth, agriculture appears to be increasingly dynamic in Bangladesh, especially in the Northwest – the poorest region of the country. There have been significant changes in the rural economy, as seen through increasing non-farm activities, emerging land-use patterns, and links between farmers, the landless, women, and the private sector through changes in the food value chain and infrastructure investment. Although the emergence of agro-processing firms is one of the most important developments, there is no study on supermarkets and agro-processors in Bangladesh.

The main objective of this project is to analyze, with special emphasis on landless and women, the impacts, and implications for rural livelihoods and poverty of these (infrastructure and supply chain) changes. We will analyze what changes these developments imply for labor activities, migration, poverty reduction, and for the development of and connection with secondary and market towns, with special emphasis on women and the poor.

Peru Potato Marketing Project

The objective of this study were, a) assess the impact of new and complex contracting schemes, as opposed to traditional marketing channels on small farmers’ welfare, and b) explore the critical factors that determine the small farmers enter these institutional arrangements. In this context, two critical factors were stressed: access to credit and size of the agricultural plot. The results point out that market failure in rural Peru is widespread due to many problems like poor infrastructure, market segmentation, poor enforcement of contracts, imperfect information, high risk, and regulatory uncertainty, among the most important. Under this scenario, it is unrealistic to expect that agro industry by itself will be successful in connecting small farmers to output markets. Such a situation of non-competitive markets and inefficient private provision may justify Government and/or NGO intervention. However, these interventions need to be cautious to avoid amplifying these problems and further retarding or, even worse, impeding the development of efficient and competitive markets.

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