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Market Integration in Wholesale Rice Markets in India

In: The Indian Economy Sixty Years After Independence

Author

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  • Raghbendra Jha
  • K. V. Bhanu Murthy
  • Anurag Sharma

Abstract

The level of integration of agricultural markets is a critical determinant of agricultural price policy in developing countries, particularly large ones. If agricultural markets are not integrated, then any local food scarcity will tend to persist, as distant markets (with no scarcity) will not be able to respond to the price signals of such isolated markets (Dreze and Sen, 1995). Lack of integration can often lead to localized food scarcity, even famines (Currey and Hugo, 1985). Testing for such integration is, therefore, central to determining the (geographical) level at which agricultural price policy should be targeted, at least in the short-run. If all agricultural markets were not integrated at the national level then a national agricultural price policy would not be suitable. It would be more appropriate to target a common price policy to a set of integrated markets. In the longer run it would be imperative to enhance market integration across the board in order to reap the advantages of a large market.

Suggested Citation

  • Raghbendra Jha & K. V. Bhanu Murthy & Anurag Sharma, 2008. "Market Integration in Wholesale Rice Markets in India," Palgrave Macmillan Books, in: Raghbendra Jha (ed.), The Indian Economy Sixty Years After Independence, chapter 13, pages 233-246, Palgrave Macmillan.
    • Handle: RePEc:pal:palchp:978-0-230-22833-7_13
    DOI: 10.1057/9780230228337_13
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    References listed on IDEAS

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    1. Goletti, Francesco, 1994. "The changing public role in a rice economy approaching self-sufficiency: the case of Bangladesh," Research reports 98, International Food Policy Research Institute (IFPRI).
    2. Shahidur Rashid, 2004. "Spatial Integration of Maize Markets in Post-liberalised Uganda," Journal of African Economies, Centre for the Study of African Economies, vol. 13(1), pages 102-133, March.
    3. Engle, Robert F. & Yoo, Byung Sam, 1987. "Forecasting and testing in co-integrated systems," Journal of Econometrics, Elsevier, vol. 35(1), pages 143-159, May.
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    Cited by:

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    2. Beag, F.A. & Singla, N., 2014. "Cointegration, Causality and Impulse Response Analysis in Major Apple Markets of India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 27(2).
    3. David Atkin, 2013. "Trade, Tastes, and Nutrition in India," American Economic Review, American Economic Association, vol. 103(5), pages 1629-1663, August.
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    5. Kitenge, Erick M. & Morshed, A.K.M. Mahbub, 2019. "Price convergence among Indian cities: The role of linguistic differences, topography, and aggregation," Journal of Asian Economics, Elsevier, vol. 61(C), pages 34-50.
    6. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    7. Boffa,Mauro & Varela,Gonzalo J., 2019. "Integration and Price Transmission in Key Food Commodity Markets in India," Policy Research Working Paper Series 8755, The World Bank.
    8. Galang, Ivory Myka R., 2014. "A Spatial Integration Analysis of the Regional Fertilizer Markets in the Philippines," Discussion Papers DP 2014-36, Philippine Institute for Development Studies.
    9. Bhattacharya, Rudrani & Chowdhury, Sabarni, 2021. "How effective is e-NAM in integrating food commodity prices in India? Evidence from Onion Market," Working Papers 21/336, National Institute of Public Finance and Policy.
    10. Pratap Kumar JENA, 2016. "Commodity market integration and price transmission: Empirical evidence from India," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 283-306, Autumn.
    11. Bathla, Seema & Srinivasulu, R., 2011. "Price Transmission and Asymmetry: An Empirical Analysis of Indian Groundnut Seed and Oil Markets," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 66(4), pages 1-16.
    12. T.G. Saji, 2018. "Price transmission for natural rubber: India integration with world markets," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(617), W), pages 155-168, Winter.
    13. Sekhar, C.S.C., 2012. "Agricultural market integration in India: An analysis of select commodities," Food Policy, Elsevier, vol. 37(3), pages 309-322.
    14. Jayasuriya, Sisira & Kim, Jae H. & Kumar, Parmod, 2007. "International and Internal Market Integration in Indian agriculture: A study of the Indian Rice Market," 106th Seminar, October 25-27, 2007, Montpellier, France 7935, European Association of Agricultural Economists.
    15. Ranjit Kumar Paul & Tanmoy Karak, 2022. "Asymmetric Price Transmission: A Case of Wheat in India," Agriculture, MDPI, vol. 12(3), pages 1-17, March.
    16. Tahir Mukhtar & Muhammad Tariq Javed, 2007. "Price Integration in Wholesale Maize Markets in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 46(4), pages 1075-1084.
    17. Maximilian Heigermoser & Linde Götz & Miranda Svanidze, 2021. "Price formation within Egypt's wheat tender market: Implications for Black Sea exporters," Agricultural Economics, International Association of Agricultural Economists, vol. 52(5), pages 819-831, September.
    18. Sakketa, Tekalign Gutu, 2022. "Urbanisation and rural development in developing countries: A review of pathways and impacts," IDOS Discussion Papers 5/2022, German Institute of Development and Sustainability (IDOS).
    19. Hussain, Babar, 2011. "Testing the law of one price in gram markets of Pakistan," MPRA Paper 30600, University Library of Munich, Germany, revised 01 Apr 2011.
    20. Madhusudan Ghosh, 2011. "Agricultural Policy Reforms And Spatial Integration Of Food Grain Markets In India," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 36(2), pages 15-37, June.

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