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Instability, Supply Response and Insurance in Oilseeds Production in India

Author

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  • Pandey, L.M.
  • Kumar, Sant
  • Mruthyunjaya

Abstract

Yield and price instability and covariate risks have been examined for major oilseeds, viz. groundnut, rapeseed/mustard, sunflower and soybean, in selected states of India using time series data. Risk behaviour and effects of price and price risk on production have been analyzed in a rational expectations framework. The study has also estimated social gains from yield and revenue insurance in oilseeds. While instabilities in yield, prices and gross return have shown mixed responses, covariate risks have increased. The results of econometric analysis have indicated that the expected prices and price risk are important determinants of oilseeds production. Price elasticities of oilseed production have been found to vary between 0.26 and 0.88 and price risk elasticities of production between –0.006 and –0.07 in different Indian states. The potential efficiency gains from insurance schemes based on rainfall and other meteorological variables have been estimated to be 17.5 to 43 per cent over self-insurance in oilseeds production.

Suggested Citation

  • Pandey, L.M. & Kumar, Sant & Mruthyunjaya, 2005. "Instability, Supply Response and Insurance in Oilseeds Production in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 18(Conferenc).
    • Handle: RePEc:ags:aerrae:58464
    DOI: 10.22004/ag.econ.58464
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    References listed on IDEAS

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    5. repec:feb:artefa:0008 is not listed on IDEAS
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    Cited by:

    1. G. Mythili, 2006. "Supply response of Indian farmers: Pre and post reforms," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2006-009, Indira Gandhi Institute of Development Research, Mumbai, India.
    2. G. Mythili, 2010. "Supply Response of Indian Farmers: Pre and Post Reforms," Working Papers id:2633, eSocialSciences.
    3. G. Mythili, 2006. "Supply Response of Indian Farmers - Pre and Post Reforms," Microeconomics Working Papers 22412, East Asian Bureau of Economic Research.
    4. Birthal, Pratap Singh & Nigam, Shyam N. & Narayanan, A.V. & Kareem, K.A., 2012. "Potential Economic Benefits from Adoption of Improved Drought-tolerant Groundnut in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 25(1), June.

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