Record Details

PRICE BEHAVIOUR OF MAJOR OILSEED CROPS IN GUJARAT: AN ECONOMETRIC ANALYSIS

KrishiKosh

View Archive Info
 
 
Field Value
 
Title PRICE BEHAVIOUR OF MAJOR OILSEED CROPS IN GUJARAT: AN ECONOMETRIC ANALYSIS
 
Creator TARPARA VRAJLAL DAYABHAI
 
Contributor Shiyani R. L.
 
Subject OILSEED
ECONOMICS
 
Description The Government is promoting organized marketing of agricultural
commodities in the country through a network of regulated markets. The
basic objective of setting up of network of physical markets has been to
ensure reasonable gain to the farmers by creating environment in markets
for fair play of supply and demand forces, regulate market practices and
attain transparency in transactions.
Oilseeds all over the world are known for being a rich source of food,
feed, energy and employment. The oilseeds and their by-products also
provide nutrition to the livestock and a good source of manures to the crop
production.
The analysis of prices and market arrivals of oilseeds over time is
important for formulating a sound price policy. In order to device the
appropriate ways and means for reducing the price fluctuations of oilseeds
commodities, there is a need to have a thorough understanding of the price
behaviour over time. Hence, the present study assumes the price behaviour
of four major oilseeds viz., groundnut, sesamum, mustard and castor crops
of Gujarat.
The data on districtwise area, production and yield of major oilseeds
crop were collected from published data of Directorate of Agriculture,
Gujarat state, Gandhinagar from 1990-91 to 2009-10 to study the growth in
area, production and productivity. The monthly time series data on arrivals
and prices of major oilseeds from 1990-91 to 2009-10 were collected from
different Market Committees to study the price behaviour, price forecasting
and market integration.
Compound Growth Rates (CGRs), Augmented Dickey-Fuller (ADF) unit
root test, Auto Regressive Integrated Moving Average (ARIMA), Johansen’s
co-integration test, Vector Error Correction Mechanism (VECM) and
Garrett’s Ranking techniques were used to achieve the objectives of the
study.
Major findings of the study revealed that, the Gujarat state registered
negative and significant growth rates of area under groundnut and mustard
while positive and significant growth rates were found for sesamum and
castor crops. The growth rate of production was positive and significant in
groundnut, sesamum and castor, while mustard crop registered negative
and non-significant growth rate. The per annum rate of increase in
productivity was observed highest in groundnut (3.97%), followed by
mustard (1.58%), sesamum (1.02%) and castor (0.44%).
The highest variation in area was noticed in castor, followed by
mustard, sesamum and groundnut during the study period. The production
and yield variation was found the highest in groundnut, followed by
sesamum, mustard and castor crop.
Higher indices of market arrivals were noticed in the month of
November for groundnut, October for sesamum, March and April for
mustard and April and February for castor while that of highest price index
was observed in the month of July and August for groundnut, April and
May for sesamum, November and December for mustard and September for
castor crop. The lower market arrivals index value was found during the
month of August for groundnut, March and August for sesamum, October
and February for mustard, and October for castor crop while the lower price
indices were observed in the month of December for groundnut, October for
sesamum, March for mustard and June and January for castor crop.
The results of ARIMA models were found to be the most suitable for
forecasting the prices of selected oilseeds commodities viz., (1, 1, 0) for
groundnut, (0, 1, 0) for sesamum, (0, 1, 0) for mustard and (1, 1, 2) for
castor price. The validity of the forecasted values of all the four oilseeds
commodities were checked by comparing them with their actual values
during the post sample forecast period. The percentage difference between
the forecasted and actual value of groundnut, sesamum, mustard and
castor were found to be 5.2 per cent, 2.0 per cent, 0.5 per cent and 4.4 per
cent, respectively. This proved that the ARIMA models were the best fit
models for forecasting the price of oilseeds.
The results of the Augmented Dickey-Fuller (ADF) unit root test for the
selected four oilseed crops viz., groundnut, sesamum, mustard and castor
revealed that the level data were non-stationary but their first
differences were stationary. This implies the presence of unit root in both
the selected market price series of all the selected crops. Hence, both the
market price series of all the selected crops were integrated of the order 1
i.e. I(1). Further, the Johansen’s co-integration test revealed that the Gondal
and Junagadh market price series for groundnut, Rajkot and Gondal
market price series for sesamum and Dhanera and Patan market price
series for mustard were co-integrated while there was no co-integration
between Patan and Dhanera market prices of castor during the period
under study. This indicated that the castor markets were inefficient in
comparison to the markets of other three oilseeds commodities.
The results of Vector Error Correction Mechanism (VECM) showed that
the causality in the case of groundnut and sesamum was unidirectional
while, it was observed bidirectional in case of mustard means both the
selected market prices influenced each other equally. In case of castor, the
price series were not co-integrated. The results of Granger causality test
indicated that for groundnut, there existed unidirectional causality while in
case of sesamum and mustard, both the market prices exerted bidirectional
causality among them.
The results based on the Johansen multiple co-integration
procedure for national and international market of mustard showed that the
presence of at least two co-integration equations at 1 per cent level of
significance. Hence, markets are having long-run equilibrium relationship.
In case of the Hapur market price model of mustard, the price discovery
occurred in the Alwar and Dhanera markets and was transmitted to Hapur
market. However, in the Alwar market model, the price discovery occurred
in the Dhanera market and was transmitted to Alwar market. In Dhanera
market price model, the Dhanera market was influenced by its own price
too. Similarly, in Hamburg market price model, the Hamburg market was
also influenced by its own price.
Granger causality test for national and international markets revealed
that Alwar market prices influenced the Hapur market price and there
existed unidirectional causality from Alwar to Hapur markets. Similarly,
unidirectional causality was exerted from Dhanera to Alwar, Dhanera to
Hapur, Hamburg to Hapur and Hamburg to Dhanera market.
The results of Garrett’s ranking analysis of problems associated with
marketing revealed that the price fluctuation was the major problem
expressed by most of the farmers.
Adoption of appropriate price policy measures to maintain acreage at
desired levels, improvement in the productivity of oilseed crops through
more research and extension efforts, enhancing storage facilities, adoption
of different price mechanism techniques to reduce the price fluctuation and
adequate and continuous efforts to disseminate the market intelligence and
market information, particularly for price forecast are some of the major
suggestions emerged from the study.
 
Date 2016-09-21T17:22:04Z
2016-09-21T17:22:04Z
2010-10
 
Type Thesis
 
Identifier http://krishikosh.egranth.ac.in/handle/1/78216
 
Language en
 
Format application/pdf