Market responsiveness of peasant cultivators: Some evidence from prewar India

Summary

This study attempts to analyse the responsiveness of Indian farmers to changes in profitability with reference to non‐food crops, such as groundnuts, cotton, jute and sugarcane, over the period 1900–39. Various types of adjustment and expectations models have been used. The generalized distributed lag models have been formulated and some special forms have been applied to study the behaviour of farmers. Both ordinary least‐squares and two‐stage‐least‐squares estimates have been carried out. In the distributed‐lag analysis, short‐run and long‐run price coefficients and elasticities have been computed and compared with some of the other studies on the subject. The emerging conclusion from this study is that farmer s seem to respond to changes in profitability, expansion of irrigation facilities, varietal improvements and qualitative factors in the case of all the crops.

Notes

Reader in Economics at the University of East Anglia. The author wishes to thank D. R. Khatkha e for his suggestions and Mr E. Wilcox and Mrs D. Howarth for their statistical assistance. Thanks are also due to a referee who suggested several improvements in the presentation.