Shortage of pulses in India: understanding how markets incentivize supply response

Abstract

PurposeThis paper aims to understand the significant farm and market-level factors that incentivize the adoption and marketing of pulses influencing its supply response to changing demand.Design/methodology/approachThe authors first use a modified Nerlovian supply response model using secondary data to identify the major price and non-price factors influencing the supply of pigeon pea, black and green gram in the major pulses growing states in India. Second, using primary qualitative data the authors map the pulses value chain from farm to retail to identify the how proportional and fixed transaction costs (FCTs) influence market participation of pulses growers and limit the transmission of price and quality information.FindingsThe supply response model shows some positive influence of price on area allocation for pigeon pea and black gram and some negative effects of yield and price increase of competing crops on pigeon pea acreage. However, for the most part, the area of Kharif pulses is inelastic to prices in the long run. Irrigation, rainfall and yields in the lag year are shown to have a significant influence on area allocation for pulses. The market study reveals that low yields, low landholding size and geographical disadvantages of high agro-climatic risk and poor connectivity hinder market access of pulses farmers relative to other crops. Market power in favor of buyers and poor price and quality information is a disadvantage to sellers, influencing their ability to participate in markets.Research limitations/implicationsA quantitative study would be required to identify the magnitude of farm and market-level transaction costs.Originality/valueThis study helps to understand the supply response of pulses and gives suggestions to direct policy to rectify this.

Do Erratic Rainfalls Hamper Grain Production? Analysis of Supply Response of Rice to Price and Non-Price Factors

“…The previous year's planted area had a significant effect on farmers' decisions to allocate more land for main-season rice (model 1) and less land for off-season rice (model 2). The results were justified in a past study where Abraham and Pingali [11] found that experience has a positive impact on the supply response of various crops in India.…”

“…The supply response of various crops is dominated by non-price factors over price factors. Non-price factors such as production area, access to irrigation and rainfall [11], agroclimatic risk [24], rice procurement [25], and poor price transmission and institutional problems of market access [26][27][28] rather than price factors is seen as having a significant influence on supply. Among others, seasonal fluctuation is the major and missed non-price factor that determines the supply response of various crops [28].…”

“…Price factors have been considered the main characteristic of profits and supply response of various crops, while supply shifters are exogenous factors such as availability of technology, biophysical conditions such as rainfall that that determine production, and yield risks [8]. For instance, studies have shown that price-supply responses are weak [9], while access to irrigation and rainfall are most important in determining the non-price supply response [10,11]. In the same vein, most crop supply response is dominated by non-price over price factors [12,13].…”

“…Farmers may be reluctant to grow more rice because of the imperfect conditions of such factors, e.g., rainfall. For instance, Abraham and Pingali [11] found that yields, rainfall, and irrigation water are significant predictors of area allocation for various crops. Similarly, Kuwornu et al [13] estimated rice production response in Ghana and found that non-price factors such as rainfall and real price of rice are significant factors.…”

Factors constraining the role of intermediaries in provisions of storage services for urban fresh fruits and vegetables supply chain in Dar es Salaam

“…In the storage services, intermediaries form an important component in the provisions of storage facilities (Issa & Munishi, 2020;Yigzaw et al, 2016). Although the on-going discussion among scholars provide contradicting observations about the importance of intermediaries in business (Stewart, 2022;Abraham & Pingali, 2021;Pingali et al, 2019;Eberhart & Eeseley, 2018), in this context, intermediaries play a very critical role such as facilitating fruits and vegetables assembly and accumulation, providing preserving materials like non-human harmful insecticides as well as facilitating packaging and packing of fresh produces (Issa & Munishi, 2020;Sparks, 2013).…”