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How effective is e-NAM in integrating food commodity prices in India? Evidence from Onion Market

Author

Listed:
  • Bhattacharya, Rudrani

    (National Institute of Public Finance and Policy)

  • Chowdhury, Sabarni

    (National Institute of Public Finance and Policy)

Abstract

A series of market distortionary rules and regulations hinder development of an integrated agricultural market in India. In order to ensure greater transparency and uniformity of food commodity prices across states, various reform measures have to be undertaken to develop agriculture marketing. These measures concentrate on the numerous areas, specifically infrastructure development, information provision, improving the role of private sector and decreasing government sector intervention, training of farmers and traders in marketing and postharvest issues, and most importantly creating a competitive national market for food commodities. The Indian government established e-NAM as a first step toward inducing competition in the agricultural market in 2016. The e-NAM or the National Agriculture Market, is a pan-India electronic trading portal which integrates the existing APMC mandis to create a unified national market for agricultural commodities. In this backdrop, this paper examines whether the introduction of e-NAM by the government has improved the spatial integration of onion markets in India. Using the maximum likelihood method of cointegration, it investigates onion market price integration of Maharashtra , Karnataka , Rajasthan , West-Bengal with the average wholesale onion price of India for the period 2010-2016 ( before e-NAM ) and 2016-2019 ( after e-NAM ). It provides evidence in favour of market integration for the period 2016-2019, while multiple relations are found to govern onion prices across states during 2010-2016. The evidence in effect suggests that introduction of e-NAM in 2016 has improved market integration for onion market prices in India.

Suggested Citation

  • Bhattacharya, Rudrani & Chowdhury, Sabarni, 2021. "How effective is e-NAM in integrating food commodity prices in India? Evidence from Onion Market," Working Papers 21/336, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:21/336
    Note: Working Paper 336, 2021
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Unit root ; Cointegration ; Spatial Market Integration ; Onion market ; e-NAM ; India;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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