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International and Internal Market Integration in Indian agriculture: A study of the Indian Rice Market

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  • Jayasuriya, Sisira
  • Kim, Jae H.
  • Kumar, Parmod

Abstract

There has been concern about the effectiveness of India's agricultural policy reforms adopted in recent years as part of the overall policy liberalisation process. These concerns have been strengthened by studies of spatial market integration of major agricultural commodity markets, such as the rice market, which have concluded that Indian agricultural markets remain largely segmented and fragmented. These studies, however, have ignored possible structural breaks due to reform policies adopted since the early 1990s and the possible impact of world markets on domestic price movements. We show that the major reforms of the Indian rice market in 1994 has had a major impact on market integration, leading to much faster price convergence between domestic and international prices. The pace of price convergence is influenced by quality of infrastructure in the states and whether they produce market surpluses, possibly because of the asymmetric nature of foreign trade liberalisation in rice.

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Bibliographic Info

Paper provided by European Association of Agricultural Economists in its series 106th Seminar, October 25-27, 2007, Montpellier, France with number 7935.

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Date of creation: 2007
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Handle: RePEc:ags:eaa106:7935

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Keywords: Crop Production/Industries; International Relations/Trade; Marketing;

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Cited by:
  1. Hwa-Taek Lee & Gawon Yoon, 2013. "Does purchasing power parity hold sometimes? Regime switching in real exchange rates," Applied Economics, Taylor & Francis Journals, vol. 45(16), pages 2279-2294, June.

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