Agricultural input and output trade is a powerful engine for agricultural growth. It helps in optimizing farmer’s performance and deals with the changing social, environmental and economic conditions. Trade in agricultural inputs arises relatively because of the geographical disparity in the manufacturing of agricultural inputs. This paper discusses the agricultural input-output trade in South Asia. Economic growth of South Asia has been averaging at 6% per year over the last two decades. This study shows that the proportion of the gross domestic product derived from agriculture declined throughout the study period in all the South Asian countries. Also, the employment in agriculture declined from 59.2% in 2000-02 to 47.1% in 2010-12. The availability of better quality inputs would help in increasing the cereals yield across all the South Asian countries. A little improvement is seen in the exportimport of fertilizers, pesticides, insecticides and agricultural machineries during the study period. At the same time, an increasing trend has also been seen in the cereals yield. The agricultural outputs trade enables South Asian countries to manage the balance among food deficit and surplus countries along with balancing the prices of outputs. A policy suggestion would be to establish the most favored nation regulations among South Asian countries to initiate trade exchanges for agricultural inputs other than seeds like fertilizers, insecticides, pesticides and agricultural machinery.

Trade of agricultural inputs and outputs is a powerful engine for agricultural growth. It would help in optimizing the farmer’s performance and deals with the changing social, environmental and economic conditions. Adam Smith (1776) wrote in The Wealth of Nations that if a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage.1 Davis Ricardo (1817) propounded his theory that international trade is founded on the principle that open markets allow countries to specialize in producing goods or services in which they have comparative advantage.2 The gist of these theories is that a country would be better off if it specializes in producing goods and services in which it is particularly productive rather than producing everything to consume. This advantage might occur because of favorable climatic conditions, natural resources, available land and labor, technical know-how, and availability of other required inputs. It can then trade its surplus of these goods to other countries to obtain other goods needed.

CUTS International Report 20153 highlights that farming is becoming inputintensive and that agricultural income has seen a constant decline. The situation is further aggravated by a fragile value-chain for the sector. The challenge for South Asia is food security which is largely a management challenge, where food produced does not meet the demand. On the other hand, in many locations, farmers even do not receive quality inputs that are required for agriculture. Thus, there is high hope on opportunities in cross-border trade. Though cross-border trade does not only improve the market for its produce, it also reduces the cost of food items by reducing the storage and transport needs. In recent years, there has been limited trade in agri-produces across the border, but it is much more controlled.

International Relations Journal, Agricultural Inputs, Agricultural Scenario, Domestic Cereals Supply, Linkages Between Outputs Trade, Most Favored Nation (MFN), Outputs Trade, South Asia