Supply response of major oilseeds in India: A mix of price and non-price factors

Abstract

Oilseeds are one of the most important determinants of India’s agricultural economy, next only to cereals and pulses. The self-sufficiently in oilseed obtained during the early 1990s could not be sustained sufficiently. Despite, being the fourth largest oilseed crop-producing nation in the world, India is also one of the largest importers of vegetable oils. This study appraises the relationship between price and non-price factors to understand the behaviour of major oilseeds (mustard/rapeseed and groundnut) cultivated in India from 1997-98 to 2019-2020. Supply response is the responsiveness of supply, which can be identified using production response to different determining factors. Mustard/rapeseed and groundnut are the oilseeds that are mainly produced in India. This study specifically attempted to quantify the relationship between oilseed production and different factors, such as annual rainfall, annual temperature, yield, and revenue difference for both crops. The findings suggested that yield and revenue difference of mustard with wheat are the most determining factors for mustard production, whereas annual rainfall, the temperature during the growing season, and revenue difference between groundnut with rice and soyabean are the most significant determinants of groundnut’s production response. Crop equivalent productivity further validated that groundnut competed and outperformed the two promising crops (soybean and paddy). The trend analysis (1997-98 to 2019-2020) also indicated that wheat was the dominant crop over mustard from 1997-98 to 2013-14. Afterwards, i.e., from 2014-15 to 2019-20, mustard surpassed wheat productivity (on equivalent terms) and outperformed cereal.