An Econometric Analysis of Demand and Supply Response of Pulses in India
Pushpa M. Savadatti
Abstract
The present study is an attempt to undertake the task of verifying the various factors influencing the supply of pulses and to develop suitable demand relations. The present study focuses on two important pulses grown in the country namely gram (chick pea) and tur (pigeon pea). Using Nerlove’s adjustment lag model as the basic ftamework, supply aspect has been studied at the regional and national level, based on the time series data covering the period 1965-66 to 1998-99. Demand aspect has been discussed at the national level only for the same period. Acreage response results revealed that in rain fed areas farm harvest prices and good weather conditions positively influence the area allocation decision of the farmers. But yield turned out to be an insignificant factor in influencing the farmers’ decision to allocate land to either gram or tur. It is clear from our analysis that even though farmers are price responsive and farm harvest prices of pulses are much higher than the farm harvest prices of competing crops like cereals, farmers do not realize reasonable returns for their outputs because of lower and also unstable yields of gram and tur. Production of pulses (gram and tur) mainly depends on area under the crop. Technological factor represented by time trend turned out to be positive. But growth trends in production of gram and tur suggest that existing technology has not been able to bring desired increase in production of gram and tur so as to meet increasing demand. Demand analysis reveals that price elasticity of demand being less than one in case of both gram and tur indicating that in situations of scarcity, there will be heavy pressure on prices of pulses and hence, sufferers are weaker section of the society.
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