Estimation of Acreage Response of Major Crops in Haryana using Co-integration Approach

Abstract

The present study is an attempt to estimate the acreage response functions for major crops in Haryana within the framework of co integration and error correction model and to compare the short-run and long-run supply elasticities of major crops. The long-run acreage response to lagged price was positive and significant in the case of rice, rapeseed mustard and sugarcane with elasticity values 0.19, 0.22 and 0.29, respectively. In case of other crops except bajra and gram, very low positive but non-significant price elasticities have been observed. In the short-run, lagged price elasticities were found to be positive for all the crops. However, the positive significant values have been observed in case of rapeseed-mustard, sugarcane and bajra only. The long-run acreage response to lagged year yield was found to be positive and significant in case of rice, wheat and cotton (Am.) with elasticity values 0.26, 0.18 and 0.29, respectively. Irrigation elasticity has been observed to be positive for all the crops in the long-run, while it is positive for all the crops except gram and rapeseed-mustard in the short-run. However, only wheat and sugarcane are found to be positively and significantly responsive to irrigation in the long-run as well as short-run.