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Abstract
The present study is mainly focused on the price trends and volatility in agricultural commodities. It has observed in the study that international prices of agricultural commodities are highly volatile and are characterized by cyclical variations. Among these, prices of food grains, sugar and cotton have fluctuated around a static mean whereas prices of dairy products and fish have been moving up and down around a rising trend. However, due to WTO commitments, domestic produces can’t be protected from international price shocks. If such shocks are transmitted to farm level, it would destabilize the crop pattern and supply. Since vast majority of the Indian farmers is either small or marginal, they do not have resources and capabilities to change their cropping patterns in a short period as necessitated by the change in international prices. Since under WTO obligations, temporary imports and price shocks can’t be checked, there is need to develop mechanism to regulate the unwanted imports and exports. While domestic producers should be subjected to compete with stable level of international prices to improve efficiency, they need to be protected against volatility.