Agriculture Reference
In-Depth Information
Table 5.2
Real price changes: state and market, 1985-2000
(1985 price=1.00)
Year
State
Market
Average
1985
1.000
1.000
1.000
1990
0.784
1.158
0.909
1993
0.797
0.965
0.853
1994
0.929
1.140
1.000
1995
0.969
1.399
1.112
1996
1.090
1.290
1.157
1997
1.202
1.028
1.144
1998
1.140
0.964
1.081
1999
1.001
0.912
0.971
2000
0.975
0.802
0.917
Note:
Both the state and market prce ndexes are derved as a weghted average of the
price index of rice, wheat, corn and soybean. The year 2000 shares in the sum of their
output are used as the weights. The rural consumer price index is used as the deflator.
For the average index, the weights are two-thirds and one-third for the state and market,
respectvely.
Source:
Calculated from Tables 5.A4-A7 in Appendix.
In 1997, quota prices increased further even though market prices had
started declnng n 1996. Ths led to quota prces exceedng market prces
in 1997 and 1998. In 1997, real quota prices were 50.8 per cent higher than
in 1993, and 20.2 per cent higher than in 1985. However, real market prices
declined from a level 29 per cent higher than the 1985 prices to only 3 per
cent higher than the 1985 prices between 1996 and 1997 (Table 5.2).
The increases in grain prices over the 1994-97 period resulted in
hstorcally hgh output levels above 500 mllon tonnes between 1996 and
1999. Together with the large grain imports in 1995 and 1996 (20.8 and 12.2
million tonnes, respectively), this resulted in large domestic surpluses. As
a result, the state purchase prices fell by 19 per cent from their highest
levels in 1997 to the recent low of 2000, and the market price dropped by
43 per cent from its highest level in 1995 to a 15-year low in 2000.
