Dynamics of Agricultural Price Variation across States: A case of Paddy Cultivation in India
Keywords:Agriculutral Prices, Government procurement, Minimum Support Price, JEL- Q11, Q13, Q130
The markets for agricultural crops have always been segmented. Although agricultural price policy in India is largely focused around declaring minimum support price (MSP) for select crops at all India level the price for any crop has hardly been unique for the country. Since Agriculture is a state subject most of the policies related to agriculture sector and particularly affecting agriculture prices are largely state specific. In this context the paper tries to understand how far prices of paddy has been different across states. To what extent such price policies are instrumental in the determination of actual price differentials realised by farmers across states. Besides, the attempt has also been made to explore major correlates instrumental in creating differentials in the prices across states. The paper draws its analysis based on unit level data of National Sample Survey 77th round on the situation assessment of farmers (2018-19). The paper evaluates some of the possible factors such as government procurements of paddy, land ownerships patterns, percentage of farmers selling in the regulated markets etc. in the context of price determination of paddy. Further, the paper also tries to find the link between local market prices and price in the regulated markets in different states.
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