ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Regional Variations in Foodgrain Prices

The all-India index numbers of the wholesale prices of food- grain are constructed on the basis of prices reported from a large number of markets spread over the country. The index numbers represent a simple average of these prices, the implicit weightage given to the prices prevailing in 'surplus' and 'deficit' areas depending therefore on the geographical distribution of the reporting markets. Since the absolute price levels for (more or less) comparable qualities of grain, as well as their movements over time, have displayed very considerable regional differences, the all-India index numbers conceal almost as much as they reveal about the behaviour of food- grain prices in the country.

Widening Margins

Table 1 shows the absolute prices of coarse rice reported from a representative sample of markets located in areas generally known to import/export large quantities of rice. Since there were no restrictions on inter-regional movements between 1954 and 1956 the differences in price during this period were of a relatively small order, but the position changed with the formation of zones1 early in 1957 and the imposition more recently of restrictions on inter-State (and even inter-District) movements of rice. Since the quotations for September 1965 refer to controlled prices (except for Ranchi) they do not really show the impact of the restrictions on prevailing open market prices. While the market prices might have been held close to the controlled prices in the exporting centres they are likely to have been very much higher in the importing areas (as in fact is indicated by the price reported in Ranchi where it was not controlled). If therefore we consider only the reported changes between 1955 and 1964 it will be seen that while the price of rice went up by about 100 per cent in the importing areas (in Ranchi and Bihar a little more), and almost as much in the exporting centres of Madhya Pradesh and Orissa, it rose by only about two-thirds in both Andhra Pradesh and Madras, resulting in a widening of the margins between the absolute prices prevailing in these two areas and in the rest of the country.

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