The agricultural growth rate in India is strongly affected by the terms of trade for the sector. Empirical evidence shows that the growth trajectory of agricultural output accelerated when real prices for farm produce rose and decelerated with the fall in real prices. The main reason for high dependence of the country’s agricultural growth on price trend is the weak impact of non-price factors and technology on it. Till the time technology or non-price factors start driving growth, India has to use the instrument of price to maintain growth in output and farm income. Government support for this becomes essential
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