Yield and price risk in pulse crop production in Eastern Vidarbha zone

Abstract

Production and price risks are major constraints in cultivation of pulse crops in India. Temporal fluctuations in yields and unstable prices or combination of these two make pulses cultivation less attractive. Naturally, these are closely interrelated and constitute the income risk. The present study is based on time series data pertaining to area, production, yield and minimum support prices of paddy, sorghum, wheat, pigeonpea, chickpea, cotton and soybean in different districts of Eastern Vidarbha Zone during 1980-2005 with the objective to quantify risk associated with yield and price. The risk associated with production and gross return was measured with the help of coefficient of variation after elimination of underlying trends in the data and probability of shortfall in yields and gross returns through appropriate probability distribution. Using mean deviation and probability of shortfall, expected negative deviations were estimated to derive Risk Equivalent Prices and protection coefficient or security index. The study concludes that the farmers of Eastern Vidarbha Zone need to be paid Rs. 36, 53, 37, 37, 71, 269 and 82 per 100 kg for paddy, sorghum, wheat, pigeonpea, chickpea, cotton and soybean, respectively over and above prevailing minimum support prices to safeguard them against yield and price risks.