ACREAGE RESPONSE AND PRICE BEHAVIOUR OF PIGEONPEA IN MAHARASHTRA
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Date
2018
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Mahatma Phule Krishi Vidaypeeth, Rahuri
Abstract
Pulses are an integral part of many diets across the globe and they have
great potential to improve human health, conserve our soils, protect the environment and
contribute to global food security. The United Nations, declared 2016 as “International
Year of Pulses” (IYP) to heighten public awareness of the nutritional benefits of pulses
as part of sustainable food production aimed at food security and nutrition. In the world,
pulses are grown by 171 countries. Pulses have been observed to be low performing
crops in India during past decades despite a rising demand and increasing prices. Thus,
the study entitled “Acreage response and price behavior of pigeonpea in Maharashtra”
has been undertaken with specific objectives as to estimate the districtwise growth rates
in area, production and productivity; to study the acreage response; examine the
behaviour of arrivals and prices with existence of volatility in prices in major markets;
extent and pattern of market integration and finally to estimate the projections of area,
production and productivity of pigeonpea.
The state is divided into four major regions viz., Western Maharashtra,
Konkan, Marathwada and Vidarbha were selected purposively. To facilitate proper
understanding of percentage increase in area, production and productivity of pigeonpea
and acreage response of pigeonpea in the State, the period of 46 years from 1970 – 71 to
2015–16 is divided into two sub periods and one entire period, Period – I (Pre-TMOP):
1970-71 to 1990-91, Period – II (Post-TMOP) : 1991-92 to 2015-16 and Period – III
(Entire period) : 1970-71 to 2015-16. For studying the seasonality in arrivals and prices
of pigeonpea, monthly and yearly secondary data on arrivals and prices of pigeonpea
were collected from the purposively selected nine markets on the basis of maximum
arrivals as Akkalkot, Barshi and Solapur from Western Maharashtra, Latur, Jalna and
Udgir from Marathwada and Hinganghat, Amravati and Khamgaon APMCs from
Vidarbha region for the period of last 15 years i.e. w.e.f. 2002-2016.
Compound growth rates of area, production and productivity of pigeonpea
were estimated. While, with the help of Nerlove Adjustment Lag Model, the acreageresponse were accessed. The competing crops were identified according to the
correlation analysis as paddy, kh. maize and soybean in Western Maharashtra; paddy,
black gram and kh. groundnut in Marathwada, pearl millet, green gram, and black gram
in Vidarbha and green gram, soybean and kh. groundnut for the State as a whole.
Seasonal indices of arrivals and prices were estimated by ratio to moving
average method and both inter and intra year variability (C.V.) in arrivals and prices
were studied. To ascertain the response of prices to a given change in arrivals and
previous months price, a simple linear regression equation i.e. price function was used.
Linear trend, Seasonal and Cyclical movements along with irregular variations were
estimated. The market integration was tested by using Augmented Dickey Fuller test
(ADF), Johanson’s Co-integration test, Error Correction Model (ECM) and ARCHGARCH
analysis.
A very distinguished picture of changes in area, production and
productivity of pigeonpea could be seen for entire Maharashtra State. During period I,
the area, production and productivity has increased significantly by 2.43, 3.96 and 1.50
per cent, respectively. The same scenario could be observed during the entire period with
the magnitudes of 1.90, 2.59 and 0.67 per cent in area, production and productivity,
respectively. On the contrary, the positive and significant growth of 0.79 per cent in area
coupled with positive but non-significant growth of 1.29 and 0.50 per cent in production
and productivity respectively was seen during period II. Thus, for the entire state, the
increase in the production of pigeonpea was the combined effect of area expansion and
productivity enhancements. The improvements in productivity of pigeonpea have
increased the production to a better extent rather than the area expansion in Konkan,
Western Maharashtra and Marathwada regions. On the contrary, the area expansion has
significantly increased the production of pigeonpea in Vidarbha region than that of
productivity improvement.
In Western Maharashtra, during period I, the lagged productivity of
pigeonpea (1.63%) had positive and significant influence over the current acreage of
pigeonpea. During the post Technology Mission on Pulses in period II (1991-92 to 2015-
16), the lagged prices had positively decided the current acreage allocation to the extent
of 1.19 per cent. In the entire period i.e. from 1970-71 to 2015-16, the current acreage
under pigeonpea was mainly affected by lagged prices and area under pigeonpea itself to
the extent of 0.65 and 0.35 per cent, respectively. Among the competing crops, the
significant negative influence of current area under paddy and kharif maize was observed
in current area allocation of pigeonpea.
The lagged prices (0.83%) and area (0.98%) of pigeonpea, current area of
black gram (0.49%) and lagged price of kharif groundnut (1.05%) showed positive and
significant effect over the acreage allocation for pigeonpea during the entire period of 46
years i.e. from 1970-71 to 2015-16. It indicates that kharif groundnut and pigeonpea
were having competitive behavior for acreage allocation as per farmers decision in
Marathwada region. Pigeonpea being a traditional crop of Vidarbha region and itsimportance in cotton-pigeonpea intercropping in the region, a very few of the selected
variables had any significant influence on allocation of area for pigeonpea, as the farmers
were obliged to cultivate pigeonpea against any of the parameters of decision making.
In the entire study period, the lagged area under pigeonpea and lagged
prices of soybean affected the current area allocation with a magnitude of 0.37 and 0.92
per cent, respectively. While, lagged groundnut prices and lagged green gram
productivity had lowered down the area under pigeonpea by 0.85 and 2.13 per cent,
respectively for the entire Maharashtra State.
The negative and significant relationship among arrivals and prices was
noticed in Barshi (0.44) and Solapur (0.80) markets from Western Maharashtra; Latur
(0.69) and Udgir (0.65) markets from Marathwada and Hinganghat (0.70) and
Khamgaon (0.61) from Vidarbha region. On the other hand the relationship between
monthly arrivals and prices were negative but non-significant in Akkalkot (0.11) and
Amravati (0.02) markets from Western Maharashtra and Vidarbha region, respectively.
The negative coefficient or inverse relationship implies that with increase in the quantity
of arrivals of pigeonpea in the markets, the prices were declining and vice-versa.
The price function analysis revealed that, the two explanatory variables
jointly explained 84 (Amravati) to 92 (Jalna) per cent variation in prices of pigeonpea
among the selected markets. The regression coefficient of arrivals was negatively
significant in Akkalkot, Barshi, Hinganghat and Khamgaon markets and it was negative
but non-significant in remaining markets. It clearly indicated that as arrivals in any
market under study increases, the prices declined. The lagged month prices of pigeonpea
were positive but non-significant in all the markets, indicating positive impact of lagged
month prices on current month’s prices of pigeonpea.
The total variation in arrivals and prices of pigeonpea was 46.58 and
74.35 per cent in Akkalkot market, 90.09 and 57.47 per cent in Barshi market and 60.34
and 59.02 per cent in Solapur market, respectively. In Latur market, the magnitude of
arrivals were changed between 40.45 (June) to 107.39 (November) per cent, while
variation in prices were 55.28 (July) to 60.97 (May) per cent. In Jalna market, the
variation in arrivals of pigeonpea ranged between 42.26 (January) to 160.45 (September)
per cent and variation in prices increased from 54.14 (February) to 64.45 (November) per
cent. In case of Udgir market, the variation in arrivals and prices of pigeonpea ranged
between 52.57 (February) to 99.86 (September) per cent and 57.29 (February) to 61.85
(January) per cent, respectively.
The maximum variation in arrivals of pigeonpea was observed during
November in Hinganghat (161.25 %) and Amravati (154.51 %) markets, while during
December in Khamgaon (139.55 %) market. The maximum variation of 260.36 per cent
was observed in Akkalkot market during 2016. The variation in prices was ranged
between 3.81 to 34.61 per cent in Akkalkot market. In case of Barshi market, the
coefficient of variations in arrivals and prices were ranged between 90.76 to 239.21 per
cent and 4.86 to 19.42 per cent, respectively.The variation in per quintal average prices of pigeonpea has increased
from 5.01 to 21.48 per cent during the period under study in Latur market. The
maximum variation in arrivals of pigeonpea was observed in Jalna and Udgir markets to
the tune of 211.33 and 177.20 per cent, respectively. On the other hand, the per quintal
prices varied by 26.16 and 27.59 per cent, respectively in Latur and Udgir markets. The
variation range of average arrivals was 66.46 to 164.06 per cent in Hinganghat market.
While the per quintal prices of pigeonpea varied between 1.03 to 20.59 per cent.
Similarly, the maximum variation in arrivals was to the tune of 323.03 per cent during
the year 2015 in Amravati market were noticed. The maximum and minimum price
variation of 22.12 (2009) and 5.42 (2006) per cent, was seen in Amravati market. In the
case of Khamgaon market, average annual arrivals of pigeonpea varied between 50.85 to
155.22 per cent, on the other hand, the variation in prices was observed to be moving
between 4.53 to 22.77 per cent. Heavy fluctuations in the indices of arrivals and prices
with no definite pattern were observed among the selected markets for the study period.
The average and estimated prices of pigeonpea revealed that, for all the
regions and all the markets under study, the average prices of pigeonpea were above the
estimated prices during the initial years i.e. 2002 and 2003 and during 2009. Also, the
average prices were more than estimated prices during 2015 and 2016, the terminal years
of study. The exceptions to this situation was noticed in Vidarbha region, as the average
prices of pigeonpea were higher than the estimated prices of pigeonpea successively for
three year as 2002, 2003 and 2004 in Hinganghat market. Similarly, in Amravati market
the average prices were higher during 2002 to 2005 than the estimated prices. The
cyclical variations analysis stated that there was no cycle in any selected markets of all
regions.
The critical value (-4.01044) obtained through Augmented Dickey-Fuller
(ADF) test is greater than all the ADF values of first difference in all the selected
markets stating that, there existed unit root in these markets. Which implies that, the data
series in these markets becomes stationary after first difference except Barshi market
which recorded lower ADF value than that of critical value at 1 per cent level.
The Johansen's multiple co-integration test shows that, as per the trace
statistics values in Western Maharashtra, Marathwada and Vidarbha region were greater
than their critical values at 5 per cent level, the two co-integration equations in selected
markets in each of western Maharashtra (Akkalkot, Barshi and Solapur) and Marathwada
(Latur, Jalna and Udgir) region and one co-integration equation in Vidarbha
(Hinganghat, Amravati and Khamgaon) region were observed.
The Granger Causality Test (Granger, 1969) analysis indicated that, the
unidirectional price influence was observed in Akkalkot- Amravati, Latur- Akkalkot,
Udgir- Akkalkot, Hinganghat-Amravati, Amravati- Jalna, Khamgaon- Amravati,
Solapur- Barshi, Udgir- Barshi, Hinganghat- Jalna, Hinganghat- Latur, Hinganghat-
Udgir, Khamgaon- Jalna, Udgir- Jalna, Latur- Khamgaon and Latur- Solapur markets.
Whereas, bidirectional price influence was noticed in Barshi- Akkalkot, Hinganghat-Akkalkot, Jalna- Akkalkot, Khamgaon- Akkalkot, Solapur- Akkalkot, Barshi- Amravati,
Solapur- Amravati, Hinganghat- Barshi, Jalna- Barshi, Khamgaon- Barshi, Latur- Barshi,
Khamgaon- Hinganghat, Solapur- Hinganghat, Latur- Jalna, Solapur- Jalna, Solapur-
Khamgaon, Udgir- Latur and Udgir- Solapur markets. However, in Latur- Amravati,
Udgir- Amravati and Udgir- Khamgaon markets none price influence was depicted.
To detect the volatility in the prices of pigeonpea in selected markets the
ARCH-GARCH analysis was carried out and it was observed that the sum of Alpha and
Beta is nearer to 1 which indicated that the volatility shocks in the prices of pigeonpea
are quite persistent in these markets.
The results of Vector Error Correction Model (VECM) stated that, in
Western Maharashtra Akkalkot and Solapur markets, in Marathwada region, Jalna and
Udgir markets and in Khamgaon market of Vidarbha region attains short run equilibrium
rapidly.
The area of pigeonpea in Maharashtra State will increase to 16163.76
hundred hectares (2030-31) due to 1.90 per cent increase in area per annum, while during
the same period the production will increase to 8251.76 lakh tones at constant
productivity. On the contrary, with the increasing productivity of 0.67 per cent per
annum, the productivity will reach to 568.07 kg/ha which will increase the production
upto 9182.22 lakh tones in 2030-31.
The growth rate of urban population under Situation I (Increase @ 0.04
%/ annum) and Situation II (Increase @ 0.05 %/ annum) will increase by 3.76 and 3.95
per cent, respectively in 2030-31. The urban population in 2030-31 will reach up to
11.61 and 11.82 crores under Situation I and Situation II, respectively.
The per capita requirement of pigeonpea will be 31.52, 31.25, 31.02 and
30.80 gms, respectively during 2013-15, 2020-21, 2025-26 and 2030-31. Thus the total
demand for pigeonpea will be 13.80, 15.68, 17.54 and 19.76 lakh tones, respectively
during the years mentioned above under Situation I, while the demand will be 13.80,
15.69, 17.58 and 19.87 lakh tones under Situation II, respectively.
Additional area of 2264.94 thousand hectares will be required during
2030-31 at constant productivity and 1871.64 thousand hectares at increasing
productivity will compensate the requirement of pigeonpea as per nutritional
requirements of growing population.
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