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Supply Response in Rainfed Agriculture of Odisha, Eastern India: A Vector Error Correction Approach

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  • Ranjan Paltasingh, Kirtti
  • Goyari, Phanindra

Abstract

This paper provides an empirical investigation of supply response in case of rice in rainfed agriculture of Odisha. A composite weather index, instead of rainfall has been incorporated in the model to monitor farmers’ supply response to weather. The vector error correction approach which avoids the unrealistic assumption of fixed supply on the basis of static expectation is applied. The empirical results reveal the fact that there is price inelasticity of supply whereas the supply elasticity with respect to weather is found to be very high. The policy implications suggest that there should be huge emphasis on irrigation as well as weather insurance. Assured irrigation minimizes the dependence on weather conditions and secures the crop from the vagaries of monsoon and thereby reduces the risk attached with farming.

Suggested Citation

  • Ranjan Paltasingh, Kirtti & Goyari, Phanindra, 2013. "Supply Response in Rainfed Agriculture of Odisha, Eastern India: A Vector Error Correction Approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 14(2), pages 1-16.
    • Handle: RePEc:ags:aergaa:253547
    DOI: 10.22004/ag.econ.253547
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    References listed on IDEAS

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    Cited by:

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    2. Salamatu Jebuni-Dotsey, 2023. "Price Incentives and Supply Response in Cocoa -A Case of Border Regions of Ghana," Journal of Sustainable Development, Canadian Center of Science and Education, vol. 16(3), pages 1-1, May.
    3. Antony, Nyerere, 2016. "Determinants Of Rice Supply In Tanzania," Research Theses 276426, Collaborative Masters Program in Agricultural and Applied Economics.
    4. Paltasingh, Kirtti Ranjan & Goyari, Phanindra, 2013. "Analyzing Growth and Instability in Subsistence Agriculture of Odisha: Evidence from Major Crops," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 26(Conferenc).

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