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Price Movements For Rice And Wheat - A Structuralist Policy Perspective

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Listed:
  • Gopakumar K.U.

    (Sri Sathya Sai Institute of Higher Learning)

  • V. Pandit

    (Sri Sathya Sai Institute of Higher Learning)

Abstract

Persistent increase in food prices and its impact on society and economy have been of prime concern for the government and its policy makers in India since 2005-06. Though these rates have eased to some extent in the recent months; with expected recovery of the economy and inherent supply bottle necks, the problem of inflation remains serious. This paper examines the price movements in rice and wheat, following structuralist principles emphasizing the necessity of long term solutions in combination with short and medium term management. However, unlike completely free systems, markets for these products are characterized by government interventions, calling for a slightly different approach under which interactions of demand and supply need to incorporate government interventions by way of minimum support price and procurement. The sample for this study consists of the period, 1980-81 through 2011-12 on an annual basis. Our results confirm strong impact of demand and supply factors in determining inflation for both the products. These include the role of government interventions as well as public investment in agriculture in ensuring price stability.

Suggested Citation

  • Gopakumar K.U. & V. Pandit, 2014. "Price Movements For Rice And Wheat - A Structuralist Policy Perspective," Working papers 240, Centre for Development Economics, Delhi School of Economics.
    • Handle: RePEc:cde:cdewps:240
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    References listed on IDEAS

    as
    1. Goyal, Ashima & Pujari, Ayan Kumar, 2005. "Identifying long run supply curve of India," MPRA Paper 24021, University Library of Munich, Germany.
    2. Gopakumar K.U. & V. Pandit, 2014. "Production, Procurement and Inflation: A Market Model for Foodgrains," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 8(4), pages 431-456, November.
    3. Gopakumar K.U. & V. Pandit, 2014. "Production, Procurement And Inflation-A Market Model For Food Grains," Working papers 238, Centre for Development Economics, Delhi School of Economics.
    4. Harish Mani & G. Bhalachandran & V. N. Pandit, 2011. "Public Investment In Agricultural And Gdp Growth-- Another Look At The Inter Sectoral Linkages And Policy Implications," Working papers 201, Centre for Development Economics, Delhi School of Economics.
    5. V N Pandit & Harish Mani & G Balachandran, 2011. "Public Investment in Agricultural and GDP Growth: Another Look at the Inter Sectoral Linkages and Policy Implications," Working Papers id:4385, eSocialSciences.
    6. C. Bhujangarao, 1987. "Determinants of Foodgrain Prices in India: An Empirical Study, 1961-83," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 22(1), pages 51-77, January.
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    Cited by:

    1. K. U. Gopakumar & Vishwanath Pandit, 2017. "Food inflation in India: protein products," Indian Economic Review, Springer, vol. 52(1), pages 157-179, December.

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    More about this item

    Keywords

    Food grain inflation; demand and supply management; procurement; minimum support prices; capital stock.;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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