The Impact of Public Law 480 Imports on Prices and Domestic Supply of Cereals in India

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Abstract
This article quantifies the impact of imports of cereals under Public Law 480 on the prices and domestic supply of cereals in India. An econometric model encompassing six simultaneous equations is set up. An analytical framework for measuring the impact of P.L. 480 imports on prices and domestic supply is constructed. The statistical analysis supports the belief that the importation of cereals under P.L. 480 leads to lower prices and a decline in domestic supply but that the decrease in domestic supply is less than the quantity imported. Thus, there is a net addition to the quantity available for consumption, which is a significant contribution in a shortage economy.

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