Agricultural Market Integration in India
IMF Working Papers, July 3, 2020
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- Agricultural Market Integration in India
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Bibliographic details
- Authors: Michal Andrle, Patrick Blagrave
- Published: July 3, 2020
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513549163.001
Summary and key findings
- Assessment: Degree of cross-market price discrepancy (a proxy for market integration), its evolution over time, and proximate determinants using monthly price data for 21 agricultural goods and 60 markets in India.
- Main econometric result: Cross-market price integration is positively associated with the level of transportation infrastructure, and distance between market pairs.
- Trend result: There is no robust evidence that price integration has increased in recent years, suggesting that any positive effects of recent policy initiatives are either small, outweighed by the identified determinants of integration, or yet to come.
Data and methods
- Data: Monthly price data for 21 agricultural goods and 60 markets in India.
- Approach: Econometric analysis of cross-market price discrepancy as a proxy for market integration.
Determinants of integration (empirical associations)
- Transportation infrastructure: Positive association with cross-market price integration.
- Distance between market pairs: Positive association with cross-market price integration.
- Recent policy initiatives: No robust evidence of increased price integration attributable to recent policy initiatives.
Policy implications and interpretation
- Recent policy initiatives have not produced clear, robust increases in market integration in the sample period; potential explanations include:
- Effects are small.
- Effects are outweighed by other determinants of integration (e.g., infrastructure, distance).
- Effects may be yet to materialize.
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