Econometric analysis of import demand of pulses in India

Abstract

India is the world's largest producer and consumer of a wide variety of pulses which is dominated by tropical and sub-tropical crops such as chickpea, black gram, red gram (pigeon pea), green gram (Mungbean), lentil and so on. The world pulse production, area and yield during 2013 was 73 million tonnes (MT), in nearly 80.8 million ha and 904 kg ha-1 respectively (FAOSTAT 2015). In India, production of pulses is around 19.3 million tonnes from 26.3 million ha (ESI 2015) with a very low average productivity of 764 kg/ha. India has witnessed an impressive growth in pulses production during last 5 years. The overall productivity of pulses increased to an impressive 786 kg ha-1 during 2012- 13 as compared to 577 kg ha-1during 2004-05. The credit goes to the improved varieties and production of breeder seed and schemes launched by the government to promote pulses cultivation. Pulses are rich sources of protein and energy but largely cultivated under energy starved conditions, mostly on marginal and sub-marginal land and more than three-fourth of the area under pulses is still rainfed resulting in poor crop productivity (Choudhary, 2013). Green revolution also adversely affected the acreage of pulses causing displacement by rice-wheat cultivation leading to shift of pulse crops in marginal dry lands in the country resulting in decline in the yield of pulses during last few decades. Pulses crop being rich in protein are loved by pests and Blue Bulls (Neelgais). They are also extremely sensitive to heat and cold, besides they are slow crop. All these factors contribute in high fluctuations in yield. To analyse trend and instability tolls like Cumulative Annual Growth Rate (CAGR) and Cuddy-Della Valle Index (CDVI) is employed. To accomplish the objective of import demand analysis to compute long run elasticity of determinant Stock Watson Dynamic OLS has been used. It has been found that import demand for pulses is determined by income, price and urbanization. Results indicate that import price of total pulses has no statistically significant impact on import demand for total pulses. It is important for policymakers to understand that abolishing the existing constraints on imports will not have a major impact on total pulse imports, because the pulse economy is rather weak to respond to market signals in India.