Vol. 12, Special Issue 12 (2023)

Author(s):
Keerti Dyavakkalavar, Dr. C Murthy and Sunita Johri

Abstract:
The chilli is one of the most important commercial spice crops in India. Despite India's leading role in dry chilli production, minimal research exists on dry chilli pricing and market integration. This study addresses this gap by evaluating price volatility and market integration in key dry chilli markets, focusing on Byadagi, Hubballi and Gadag markets in Karnataka. The study was included both the primary and secondary sources. The primary data for the market structure were mainly gathered from Byadagi market. A random sampling procedure was adopted for selection of commission agents and wholesalers. The required data were collected from 460 commission agents, 403 wholesalers mainly from Byadagi market through pre-tested well-structured schedule during the year 2022-23. Secondary data for market integration was collected from the Byadagi, Hubballi and Gadag markets through Krishi Marata Vahini the official website of KSAMB for the year 2009-10 to 2022-23. The Lorenz coefficient off inequality, Lorenz curve and co-integration technique were employed to analyze the data. Johansen's Multiple Co-integration Test establishes evidence of long-term integration among dry chilli prices in selected markets. Granger causality tests demonstrate unidirectional and bidirectional causal relationships among dry chilli prices in different markets. Reduced form Vector Error Correction estimates highlight the speed of market adjustments to deviations from equilibrium values. With a Gini value of 0.56, the distribution of dry chillies among wholesalers in the Byadagi market from 2022 to 2023 is moderately unequal. From Byadagi to Gadag and from Byadagi to Hubballi, there is unidirectional causality. Additionally, Hubballi and Gadag are causally related in both directions. A one-period lagged change in Byadagi has a coefficient of 0.1302 as shown by D (Byadagi (-1)), indicating that prior changes in Byadagi have a positive influence on its current change. The t-statistic of 1.4521 reflects standard levels of statistical significance.