RA 00048.pdf - OAR@ICRISAT

Index
350
340
330
320
3 1 0
3 0 0
2 9 0
2 8 0
270
260
40%
260
20%
Feb May Aug Nov
Months
Figure 4. Average monthly detrended index
prices of sorghum in India (1970-76)
and percentage of sorghum arrivals to
the market (1970-76).
Rural D e v e l o p m e n t D e p a r t m e n t of the W o r l d
Bank, W a s h i n g t o n , D. C. 20433, U.S.A. His
research indicates that Indian s o r g h u m producers
respond rather strongly to s o r g h u m prices w i t h
elasticities ranging f r o m 0.2 to 0.8, depending
upon w h i c h m e t h o d of estimation is used. Thus,
e v e n t h o u g h t h e m a r k e t e d portion of s o r g h u m
p r o d u c e d in India m a y be low, farmers appear to
be w e l l a w a r e of s o r g h u m prices and actually
respond quite strongly to its changes.
Quality of Sorghum Grain as a
Determinant of Price
On any given market day, prices of s o r g h u m m a y
vary w i t h i n a range of s o m e t i m e s 1 5 % or m o r e
around the average price. The price differences
are caused by differences in t h e quality mix of
m a r k e t arrivals. S o m e qualities are positively and
others are negatively related to price. Using
multiple regression analysis, t h e variation in price
d u e to quality can be e s t i m a t e d (von O p p e n and
Rao 1982). Not only evident qualities but also
cryptic qualities are f o u n d to have a statistically
significant influence on price. A m o n g the evident
qualities, red color and m o l d e d grain negatively
influence price; also hundred-seed-weight positively
affects price. A m o n g t h e cryptic qualities,
dry v o l u m e and protein c o n t e n t positively influe
n c e price and t h e absence of swelling capacity
negatively influences price.
S o r g h u m
S o r g h u m fodder is an important source of animal
f e e d in India. M o s t of t h e s t r a w is u s e d for
on-farm c o n s u m p t i o n . However, excess quantities
are sold in urban fodder markets. For a better
understanding of the functioning of such urban
fodder markets, these w e r e studied in t h e city of
Hyderabad.
The fodder markets in Hyderabad are not
organized or regulated as are the major grain
markets in Hyderabad and e l s e w h e r e in India. The
transactions are not officially recorded. The market
yard is a piece of land belonging to a group of
persons w h o also act as c o m m i s s i o n agents.
Fodder is brought to these markets in cartloads
f r o m
neighboring villages f r o m a distance of
1 5 - 7 0 k m , and s o m e t i m e s in trucks f r o m distances
of 300 km or more.
The m o d e of transaction is quite simple. Fodder
is sold on a per cart basis; one cart contains about
100 bundles. The seller displays a f e w bundles of
his s t r a w for the buyer to inspect. O t h e r than in
grain markets, there are no auctions in t h e fodder
market and the c o m m i s s i o n agent (the o w n e r of
t h e market place) proposes a price to t h e satisfaction
of the buyer and the seller.
Seasonal Variation in Prices
The seasonal variation in s o r g h u m fodder prices is
depicted in Figure 7. Sorghum stalk is divided into
five varieties that are c o m m o n l y f o u n d in t h e
m a r k e t (besides HYV sorghum). For all t h e
varieties of s o r g h u m , fodder prices are high during
t h e m o n t h s of May, June, and July. During t h e
postharvest m o n t h s of November, D e c e m b e r ,
and January, prices are very low. The graph also
s h o w s that the variation in fodder prices w a s
higher in 1977 than in 1978. The reason is that
f r o m January 1978 fodder supplies began to be
d r a w n f r o m a w i d e r radius, i.e., as far as Kurnool
and Cuddapah districts, w h i c h are 300 km a w a y
f r o m Hyderabad.
F o d d e r M a r k e t s
Spatial Variation of
Sorghum Straw Prices
As already m e n t i o n e d , s o r g h u m s t r a w is brought
f r o m neighboring villages. If price differences per
6 6 9