IFPRI- Determinants of Domestic Production and Exports of Seasonal Pulse Crops in India – an...

Determinants of domestic production and exports of seasonal

pulse crops in India – an Econometric approach

Parmod Kumar and Barun Deb Pal

ISEC, Bengaluru

Motivation

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Per Capita Availability of Pulses (Kg/Capita/year)

PC Availability PC Availability_Composite Population (00Mn_persons)

3Ps 4 Pulse

• Population

• Production

• Policies

Area & Production of Pulses

Rabi Season Kharif Season

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area-rabipul prodrbpul

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Season wise share of Area

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Pig

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Kharif Pulses Rabi Pulses

Yield

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yield_khpul yieldrbpul

Global Perspectives • At the triennium ending 2010-11, India contributed 23% of global

production of pulses followed by Canada (7.93%), China (7.09%),

Myanmar (6.89%) and Brazil (5.29%) (FAOSTAT, 2015)

• Total area under pulse crops was 72.3 million ha globally, of which India

contributed 32% of total area.

• After India, countries like Niger (7%), Myanmar (5.33%), Brazil (5.29%)

and Nigeria (4.44%)

• The average productivity in India at the triennium ending 2010-11 stood at

around 645kg/ ha. Whereas the highest productivity was observed in

France (4219 kg / ha) followed by Canada (1936kg/ha), USA (1882kg/ha),

Russian Federation (1643kg/ha) and China (1596 kg/ha)

Policies • Historically agriculture policies were largely centred on cereals & less

focus had given to pulses

• ISOPAM in the year 2004-05 and NFSM in the year 2007-08 are

significant steps

• The key focus of ISOPOM was to increase the production and distribution

of certified seeds along with integrated nutrient and pest management

(IPM).

• The objectives of NFSM are to enhance production of cereals and pulse

crops through area expansion and yield enhancement in a sustainable

manner.

The CAGR (between 2010-11 to 2014-15) in the MSP was 11 per cent each

for Tur/Arhar and Urad, 10 per cent each for Gram and Moong and 7 per

cent for Lentil.

The growth in MSP for paddy of both common variety and Grade A was 8

per cent and wheat was 5 per cent during the same time period (NABARD,

2015).

The procurement has been negligible at about 1 to 4 per cent of production

of pulses compared to 28 to 30 per cent of cereals during 2012–13 to 2014–

15 (CACP 2015).

Procurement by NAFED and SFAC has been very limited, i.e., around 6.56

lakh metric tonnes during 2013-14 (July to June).

Research Question

• How far the price and non-price factors influence the supply responsiveness of pulses over the period?

Approach

(Narlovian Supply response)

• The supply response of kharif and rabi pulse crops in terms of area and

yield at the national level for India

• The linkage between domestic prices and the other policy variables are

captured by the effect of the proportional difference between producer’s

price and border price and the real exchange rate

• World price of the commodity, world income, world trade of the particular

commodity etc are influencing the domestic price which in turn affects the

cropping pattern decision of the domestic farmers

• Thee supply side of exports depends on the inputs, productivity, weather,

stocks, expected profitability, world export price and exchange rate.

Methodology

(Simultaneous equations method of econometrics)

• Area = f (FHP, Comp_Price, Rain, Irig, lag_depen)

• Yield = f(FHP, Rain, fert, lag_dep, trend)

• FHP = f(unval_exp, MSP, prodn, wrld-income,

imp_policy, imp_duty)

• Export=f(unival_exp, FHP, prodn, Rer, wrldtrad,

lag_dep)

Table 1: Area Response for Kharif pulses

Explanatory Variables

Coefficien

t

t-

Statistics

Constant 1.26 1.93

FHP Pulses 0.00 -0.04

FHP competitive crops -0.01 -0.06

Rainfall 0.19 2.43

Irrigation 0.04 0.88

Lag_area dependent Variable 0.10 0.66

R-squared 0.18

Durbin-Watson stat 1.68

Table 2: Yield Response function for Kharif Pulses

Explanatory Variables Coefficient t-Statistics

Constant 2.4629 2.79

Lag_FHP 0.2384 2.84

Rainfall 0.6635 5.69

Fertilizer price -0.1372 -2.13

Lag dependent variable -0.1109 -0.98

Time trend 0.0003 3.83

R-squared 0.6883


Table 3: Price Response function for Kharif Pulses


Constant 0.43 0.15

Export price*** 0.21 1.47

MSP* 0.83 3.96

Production 0.13 0.75

World Income 0.07 0.66

Import Policy dummy -0.01 -0.10

Import duty** 0.07 1.72

R-squared 0.71


Table 4: Export Response function of Kharif Pulses

Explanatory Variables Coefficient t-

Statistics

Constant 22.33 1.29

Lag world price of export -1.78 -1.52

FHP Pulses 1.34 0.99

Production of Kharif Pulses -0.09 -0.05

Real Exchange Rate* -4.68 -1.77

World Trade* 0.45 1.78

Previous years Export 0.72 6.51

R-squared 0.78


Table 5: Area Response for Rabi pulses


Constant 0.29 0.40

FHP Pulses 0.23 3.80

FHP_Competitive crops -0.08 -0.83

Rainfall 0.24 3.37

Irrigation -0.39 -6.03

Lag_dependent Variable 0.39 3.65

Time trend 0.0003 5.74

R-squared 0.80


Table 6: Yield Response function for Rabi Pulses


Constant 6.86 8.05

FHP -0.02 -0.22

Winter rain 0.02 0.59

Irrigation 0.07 0.73

Fertilizer Price -0.20 -2.03

time trend 0.0001 1.90

R-squared 0.73


Table 7: Price Response function for Rabi Pulses


constant 6.27 2.88

unit value of export 0.32 2.80

MSP 0.42 1.60

Production -0.24 -1.33

Openness 0.31 1.58

Trend -0.0048 -0.57

R-squared 0.58


Table 8: Export Response function of Rabi Pulses

Explanatory

Variables

Coefficient t-Statistics

Constant 80.31 4.75

Unit value of export -6.09 -5.87

Lag FHP -3.40 -2.68

lag production -0.35 -0.18

REER -3.68 -1.77

policy dummy 0.14 0.14

trend -0.40 -6.37

R-squared 0.75


Policy Recommendations

• Price helped farmer to be in the cultivation but not expansion

• Opportunity of export can be trapped

• Huge potential for area expansion – technological interventions are

necessary

• More emphasis is needed especially in the eastern region where the

productivity at present is low and the region has huge potential for these

crops

• special efforts are needed on the research and development front to develop

high yielding variety seeds in pulses whereby no spectacular increase in

yield is observed during the last half a decade

• special emphasis also needs to be given on dry land farming whereby pulse

crops can be grown under rain-fed conditions with minimal or no irrigation

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