Enhanced Welfare through Market Integration: A Study of Growth, Variation and Price Integration of Chickpea

Abstract

Chickpea is the most important pulse in India. The present study is based on secondary data, worked out trends in production, seasonal variation and integration among major markets of India. Advance Econometrics analysis like Granger Causality test, Johansen Co-integration test and Vector Error Correction model were employed to examine the integration of markets. The trend in area and production shows fluctuations in major producing states except in Uttar Pradesh. In all the major producing states of chickpea, contribution of area was higher in production. The production trend improves in case of Madhya Pradesh whereas decreased in Rajasthan and Uttar Pradesh. Seasonality in arrivals has impacted the monthly retail price in all the selected markets. Out of six selected markets, five markets were having a long run price relationship. However, market integration has not yet reached an optimal level because all markets were not spatially integrated with one another in all the cases. The short run results indicated that chickpea’s markets were not well integrated. This could be due to poor market intelligence and unfavorable location of the markets. The policy intervention calls for strengthening market intelligent wing in all markets along with the establishing of online marketing system through computerization and networking. Strengthening of market infrastructure including transportation and communication facilities are the need of time in order to fully integrate the market prices. Concentration of marketing during the lean seasons helps reducing the impact of seasonality.