Working Paper Series No. E/299/2009
The present study evaluates effect of price, technology and institution-related policies of the Indian government on an average farm in North West India. The present evaluation assumes that with the rationalization of farm input and output prices farmers would adopt suitable technologies under a given institutional framework that will maximize Farmers objective function. A static linear programming-based model that maximizes profit and parameterizes risk has been chosen to present farmers objective function. The model simulates alternate price, technology and institution-related scenarios on an average farm; these scenarios have been compared on the basis of several economic, ecological and social indicators that influence long term-growth of agriculture in the region. Findings suggest that price rationalization alone would not be sufficient for the long-term growth of agriculture in the region; technology and institutions play also an important role.