Tracking agrifood value chain transformation in India: A tale of two approaches

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· IFPRI Discussion Paper Book 2443 · International Food Policy Research Institute
Ebook
42
Pages
Eligible

About this ebook

Global experience suggests that as agrifood systems transform with economic development, nonfarm activities rise in importance relative to primary agriculture owing to the expansion of processing, trade and distribution. Empirical work on the nature and distributional consequences of this transformation have followed two distinct but related methods that rely on Input-Output modelling, the “ERS-USDA Food Dollar approach” and the “IFPRI’s AgGDP+ approach”. So far, these have run parallel to each other. In this study, we offer a novel comparative perspective by applying both methods to a common dataset from India over the period 2011-12 to 2023-24. The Food Dollar estimates of the size of the Indian agrifood system remain consistently higher than that of the AgGDP+ approach but puts the share of “farm” lower- at around half of the consumer food rupee in the former in contrast to around two-thirds of agrifood-system value added under the latter approach. Our analysis suggests that these differences stem from identifiable differences in the questions they seek to answer and the way the data are processed. They must hence be viewed as complementary rather than competing approaches. Despite different vantage points, both methods suggest a coherent if surprising story of India’s agrifood system transformation. First, primary agriculture appears to be central to the agrifood system, whether measured as a share of the consumer rupee or as a share of agrifood-system value added. Second, post-farm value is concentrated in trade and transport rather than in processing or food service. Third, a transformation of the system through the growth of services, input supply, and away-from-home consumption is underway but has so far been gradual.
Global experience suggests that as agrifood systems transform with economic development, nonfarm activities rise in importance relative to primary agriculture owing to the expansion of processing, trade and distribution. Empirical work on the nature and distributional consequences of this transfo...

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