Crop Size Fixation Shields Price Volatility Syndrome: Analysis of Some Commercial Crops in India

Abstract

Prices of agricultural commodities like onion and chilli showed a high degree of volatility, which created a crisis like situation drawing attention from the policymakers, researchers, and farmers. An attempt was made to analyze the dynamics of production, price and export between regulated and unregulated crops. Results revealed that production variability was high in onion and chilli and low in FCV tobacco. The stability index for FCV tobacco price was high (0.90), while it was low for prices of onion (0.41) and chilli (0.59). The stability index for the export of FCV tobacco was high (0.81), while it was low for onion (0.31) and chilli (0.52). Thus, crop size fixation, a unique regulatory apparatus, is a potential instrument to shield the price volatility syndrome and stabilize exports.