Price Transmission, Volatility and Discovery of Gram in Some Selected Markets in Rajathan State, India

Market integration in many agricultural commodities had been extensively studied for the insight it provides into the functioning of such markets, thus giving valuable information about the dynamics of market adjustment, and whether there exist market imperfection, which may justify government intervention. This study empirically investigated price transmission, volatility and discovery of gram across four wholesale gram markets, viz. Jaipur, Kishangarh, Chomu and Malpura in Rajasthan state of India using Johansen\u27s multivariate cointegration approach, VECM, Granger causality tests, GARCH, EGARCH and ARIMA. Monthly wholesale gram price data spanning from January 2011 to December 2015 sourced from AGMARKNET were used. Multivariate cointegration showed that all the selected gram markets were cointegarted in the long-run, meaning long-run price association among these markets. The degree of market integration observed is consistent with the view that Rajasthan state gram markets are quite competitive; thus, provide little justification for extensive and costly government intervention designed to enhance market efficiency through improve competitiveness. Therefore, in order to sustain the present system of market integration, there is need to evolve mechanism that will generate market information and market intelligence which would serve as a platform for guiding farmers in marketing their produce