This paper reviews in detail the agricultural and trade policies and their implications for the domestic agricultural sector during the period 1995-2000. The problems and the role of state enterprises in agricultural commodity marketing and the various subsidy schemes that have been implemented to enhance production have been discussed. The paper also documents the constraints that hinder private sector investment in the domestic agricultural sector and the specific incentives provided by the government to attract more investment by the private sector. Finally, the paper makes several recommendations for improving the policy and regulatory environment that is required to achieve a higher growth in the sector.