Assessment of Domestic Terms of Trade on Oilseed Crops Supply and Demand by Parity Index in Rajasthan: An Analysis

Abstract

In this paper, the terms of trade between the input and output prices of selected major oilseeds i.e. groundnut, rapeseed & mustard and soybean have been estimated for selected districts of Rajasthan for the period 1996-97 to 2015-16. The indices of terms of trade for groundnut has shown mixed trend whereas for rapeseed & mustard trend remained favourable from 1996-97 to 2010-11. The ratio of index of procurement prices to index of input prices for rapeseed & mustard was more than one during this period reached to as high as of 165 in 2003-04 over the base of 100 in 1996-97. Like rapeseed & mustard, terms of trade for soybean cultivation in Baran was found favourable for about a decade (1996-97 to 2008-09) and afterward had shown mixed trend of ups and downs. The decline in indices can be attributed to relatively higher rate of increase in prices of inputs than of output prices. Based on the study it was suggested to conduct regular studies for better understanding the trend in prices of farm inputs and outputs that will help in revising the existing policies with confidence. To remove the disparity between ‘prices received and paid’, concerted efforts should be made to maintain the parity, which will help farmers in buying inputs and other items of household consumption.