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Market Integration of Food Grain in India: The Case of the Rice Market


Parvinder Jeet Kaur and M.K. Sekhon



Indian Journal of Economics and Development
Year : 2016, Volume : 12, Issue : 1a
First page : ( 457) Last page : ( 462)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2016.00105.0

Market Integration of Food Grain in India: The Case of the Rice Market

Kaur Parvinder Jeet, Sekhon M.K.*
Department of Economics and Sociology, Punjab Agricultural University, Ludhiana-141004

*Corresponding author’s Email:

JEL Codes C22, C32, O53, Q11

Online published on 26 April, 2016.

This study work out the extent of co-integration of wholesale prices of rice among markets of different states i.e. Punjab (Sangrur), West Bengal (Burdwan), Uttar Pradesh (Shahjahanpur) and Andhra Pradesh (West Godavari) of India by using Johansen test, examined the causality tests and also captures the speed of adjustment to deviations in long run equilibrium by using Vector Error Correction Model. Weekly wholesale price data from April, 2010 to march, 2014 were used for the study. The number of observation became 190 which the data was collected. Out of four markets only three markets were co-integrated. Some market pairs have shown bidirectional causality, while others have depicted unidirectional causality. The long-term equilibrium relationship exists between all the studied markets in term of weekly price of the rice, there also exists a short-run disequilibrium between some of the market pairs. Greater integration in these markets may help the farmers as well as consumers of the rice through better price signals.

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