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SPATIAL PRICE EQUILIBRIUM ANALYSIS OF RICE ECONOMY IN ANDHRA PRADESH

KrishiKosh

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Title SPATIAL PRICE EQUILIBRIUM ANALYSIS OF RICE ECONOMY IN ANDHRA PRADESH
 
Creator SUHASINI KORABANDI
 
Contributor KRISHNAIAH, J
 
Subject SPATIAL, PRICE, EQUILIBRIUM, ANALYSIS, RICE, ECONOMY, ANDHRA PRADESH
 
Description The study entitled "THE SPATIAL EQUILIBRIUM
ANALYSIS OF RICE ECONOMY IN ANDHRA PRADESH" assumes
significance because the marketable surpluses of rice
made possible through the continuous adoption of
improved technology in the state may depress the
producer's prices and may result in the diversion of
current area under rice to other remunerative crops.
From the welfare point of view also there is a need
to match the growiny demand caused by population
explosion for rice with the available supplies. This
basically involves supply analysis, demand analysis
determination of transport costs and finally spatial
price equilibrium model applying Quadratic Prograrami~g
approach. -
The study has been undertaken with the general
objective of developing a normative spatial price
equilibrium and area allocation model in three
different regions of Andhra Pradesh. The specific
objectives are (i) to determine a set of equilibrium
prices for each of the region in Andhra Pradesh, (ii)
to determine the optimum pattern of crop allocation,
commodity flows and price outcomes consistent with
optimal allocation of rice and (iii) to estimate the
volume and direction of trade in each region.
The data for supply analysis, pertaining to
production, area, prices of competing crops, price of
the own crop, area under irrigation, area under high
yielding varieties of rice and fertiliser prices were
collected from Season and Crop reports for the period
1966-67 to 1986-87 and from Agricultural situation
published by (BES) Government of Andhra Pradesh for the
period from 1986-87 to 1988-89. Demand analysis was
based on consumer expenditure data of the Thirty Eighth
Round (1983) of National Sample Survey collected from
Centre for Economic and Social Studies (CESS),
Hyderabad.
Transport costs for roadways were collected
from private agencies and railway transport costs were
obtained from Central Railways. Based on this a
transport cost function was fitted. The weighted
average of roadways and railways is taken as- the . transport
costs (the weight being the volume of commodity·
handled at present by these sources) between each pair
of regions. The final solution for spatial price equilibrium
analysis is obtained by applying a Quadratic
Programming, on lines of Takayama and Judge.
The optimal solution revealed that the equilibrium
(optimal) prices for each region were 5.49
million rupees per thousand tonne in Coastal Andhra,
4.46 million rupees per thousand tonnes in Rayalaseema
and 4.56 million rupees per thousand tonnes in
Telangana regions. The solution revealed optimal
demand of 2352.37 thousand tonnes and optimal supply of
3322.69 thousand tonnes for Coastal Andhra, with a
surplus of 970.32 thousand tonnes. The optimal demand
was 960.17 thousand tonnes and optimal supply was
391.97 thousand tonnes, with a deficit of 568.2
thousand tonnes in Rayalaseema region. Optimal demand
was 2027.68 thousand tonnes and optimal supply was
1625.56 thousand tonnes, with a deficit of 402.12
thousand tonnes in Telangana region. This implies the
flow of surplus production from Coastal Andhra to both
Rayalaseema and Telangana regions.
The optimal area allocation revealed that
8Cl.24 thousand hectares in Coastal Andhra, 88.81
thousand hectares in Rayalaseema, 307.75 thousand
hectares in Telangana regions and 1257.81 thousand
hectares in Andhra Pradesh may be d~verted for non-food
grains and other important crops. The production
increased by 268.91 thousand tonnes, 47.65 thousand
tonnes and 275.62 thousand tonnes in Coastal Andhra,
Rayalaseema and Telangana regions respectively, because
of inter regional trade between them. The economic
surplus was of the order of Rs.59734.39 millions.
The model assumes closed economy, flow of rice
in and out of state is not allowed but inter regional
trade is allowed. Hence the surplus production in
Coastal Andhra flows to both Rayalaseema and Telangana
regions. Thus, the gain in area allocation and production
pattern ~s a result of inter regional trade.
 
Date 2016-08-19T15:39:50Z
2016-08-19T15:39:50Z
1990
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/73068
 
Language en
 
Relation D3447;
 
Format application/pdf
 
Publisher ACHARYA N.G. RANGA AGRICULTURAL UNIVERSITY, RAJENDRANAGAR, HYDERABAD.