Relative Profitability, Supply Shifters and Dynamic Output Response:The Indian Foodgrains
AbstractThe realisation that the wage-goods constraint, if binding, could stall the growth process of a developing country, prompted policy makers to encourage agriculture by various means. The success of public policy depends, however, on how strongly farmers respond to the incentives provided. Using a large panel dataset pertaining to Indian agriculture - spanning the period 1967-68/1999-00, and covering the 6 important food crops cultivated across 16 major states - we provide estimates of area, yield and output elasticities w.r.t price and nonprice factors. We find consistent evidence, that the supply response of food crops is influenced by rainfall, input availability (specifically irrigation, fertilizer and improved seeds), and relative profits, in that order of importance. Our results prompt us to conclude, that all things considered, the preferred policy should be to encourage irrigation, fertilizer use and the use of modern seeds, rather than raise output support/procurement prices period after period.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number 133.
Length: 38 pages
Date of creation: Nov 2004
Date of revision:
Find related papers by JEL classification:
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
This paper has been announced in the following NEP Reports:
- NEP-AGR-2004-12-12 (Agricultural Economics)
- NEP-ALL-2004-12-12 (All new papers)
- NEP-DEV-2004-12-12 (Development)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Barten, Anton P. & Vanloot, Chris, 1996. "Price dynamics in agriculture: An exercise in historical econometrics," Economic Modelling, Elsevier, vol. 13(3), pages 315-331, July.
- Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442.
- Marc Nerlove, 1979. "The Dynamics of Supply: Retrospect and Prospect," Discussion Papers 394, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Nerlove, Marc & Fornari, Ilaria, 1998. "Quasi-rational expectations, an alternative to fully rational expectations: An application to US beef cattle supply," Journal of Econometrics, Elsevier, vol. 83(1-2), pages 129-161.
- Holt, Matthew T., 1999. "A Linear Approximate Acreage Allocation Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
- Nerlove, Marc & Bessler, David A., 2001. "Expectations, information and dynamics," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 3, pages 155-206 Elsevier.
- Chavas, Jean-Paul & Holt, Matthew T, 1996. "Economic Behavior under Uncertainty: A Joint Analysis of Risk Preferences and Technology," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 329-35, May.
- Lahiri, Ashik Kumar & Roy, Prannoy, 1985. "Rainfall and supply-response : A study of rice in India," Journal of Development Economics, Elsevier, vol. 18(2-3), pages 315-334, August.
- Rosegrant, Mark W. & Kasryno, Faisal & Perez, Nicostrato D., 1998. "Output response to prices and public investment in agriculture: Indonesian food crops," Journal of Development Economics, Elsevier, vol. 55(2), pages 333-352, April.
- Nigel Key & Elisabeth Sadoulet & Alain De Janvry, 2000. "Transactions Costs and Agricultural Household Supply Response," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 245-259.
- Maximilian Auffhammer & V. Ramanathan & Jeffrey Vincent, 2012. "Climate change, the monsoon, and rice yield in India," Climatic Change, Springer, vol. 111(2), pages 411-424, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vinayan. K.P).
If references are entirely missing, you can add them using this form.