Supply Response to Policy Changes: Evidence from Indian Oilseeds Sector

D. Suganthi (), Rishabh Kumar (), Prachi Rojh () and N. Arun Vishnu Kumar ()
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D. Suganthi: Department of Economic and Policy Research, Reserve Bank of India
Rishabh Kumar: Department of Economic and Policy Research, Reserve Bank of India
Prachi Rojh: Glencore India Pvt Ltd
N. Arun Vishnu Kumar: Department of Economic and Policy Research, Reserve Bank of India

Journal of Quantitative Economics, 2025, vol. 23, issue 2, No 10, 577-599

Abstract: Abstract Despite increasing oilseeds production, India imports more than half of its edible oil consumption. Dependence on imported edible oils results in price fluctuation, affecting consumers and producers. This study aims to identify key price and non-price drivers of the oilseed supply response using the Nerlovian supply response model. The findings reveal that global prices during sowing months, own support price and that of competitive crops, lower cost of cultivation and higher profitability boost domestic acreage. In the long run, development of irrigation infrastructure and high-yielding varieties are imperative for increasing production. Furthermore, the paper explores the factors that affect farm business income and demonstrates that, historically, improvement in productivity has supported farmers’ income, despite unfavourable trends in market pricing.

Keywords: Supply response; Oilseeds; International price change; Cost of cultivation (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s40953-024-00434-6

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