Decreasing Returns...

Article;

India Seeks Cut in Trade Distorting Agriculture Subsidies by US-European Union


Comment;

In the international market it is the cheap price that goes around the world because there is a constant pressure on the exchange rate to depreciate so that the buyer has more money and more purchasing power. This is what nations try to achieve in a crisis. Precisely, demand backed by an improvement in the value of money of the other party. Other country’s currency appreciates and amount increases. It is an expectation that demand will increase. If India can sell agriculture products and subsidy can fetch you foreign exchange we should do it but without increasing domestic inflation. We are spending less and we are earning in dollars and pounds, stronger currencies, and if we sell it in the market at the right time, it will be a gain. But it has an added advantage. Our foreign reserves improve. At least the is what our CAD demands... After all food grains are products too. I think India can take on China on this front. Sell food grains and reduce the deficit. Investment in agriculture, straight, has been told to be a great investment in the Long-run because land is scarce, more than labor and capital. Prices will rise in the long run. We need more investment in agriculture to not let the prices go above the roof and earn foreign exchange…