Supply response of cotton: an empirical analysis of Indian data
Student name: Ms Ankita Pahuja
Guide: Dr Sushmita Chatterjee
Year of completion: 2012
Host Organisation: TERI University
Abstract: Indian Agriculture has observed dramatic changes in the cropping patterns following some of
the major developments in terms of technology, and introduction of reforms accompanied by
trade liberalization. Past literature on changes in cropping patterns and supply response in
India have more or less arrived at the same result that non-price factors dominates over the
price factors in farmers‟ decision problem of planting crops. This study attempts to examine
whether these results are altered with the intensive application of inputs such as provision of
irrigation facilities, by estimating supply response of cotton in three major cotton producing
states. Using Nerlovian adjustment cum adaptive expectation model, estimation is done on
the panel data for the period of 1990-91 to 2008-09. The study found significant difference in
the supply response to price factors, when constraints like dependency on rainfall are
removed or decreased to high extent. We found the evidence that farmers do respond to the
prices by intensive application of other inputs which in our case was provision of irrigation
facilities.
