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Prepared by Racha Moussa and Piyaporn Sodsriwiboon.
The PDS has evolved as a system for management of scarcity and for distribution of food grains at affordable prices. It largely governs the procurement of India’s main agricultural commodities namely wheat, rice, sugar, and pulses, among others, and distributes to targeted poor households.
IMF (2018) applies panel unit root tests to examine whether retail prices have converged over time. It uses monthly data for 15 crops by city from 2010 to 2016. Preliminary results suggest that the law of one price holds for various crops. On the other hand, Chatterjee and Kapur (2016) analyze the spatial variation in wholesale prices of the principal cereal crops (rice and wheat) in all APMC mandis across India and within each state. It finds spatial variations in real prices of agricultural commodities are large and persist through time.
The model estimated without land retained a high explanatory power.
Regressions that include MSP cover rice, pulses, cereal, and wheat.