Estimation of Acreage response of wheat in marathwada Region / M. S. Sable and V. B. Bhise

The study of farmers' acreage response is of considerable importance for devising a suitable price policy for agricultural sector and for the growth and stability of economy. As agricultural supply responds readily to price, changes in production can be accomplished through relatively decentralized changes in market condition and incentives. Therefore, the measurement and analysis of price responsiveness of agricultural supply, particularly in a developing world, is a matter of paramount importance in a food-hungry world. In order to make price policy an effective instrument for inducing desired changes in resource allocation to different crop enterprises, knowledge of farmers' supply or acreage responsiveness is essential.

Following the formulations by Nerlove and Raj Krishna, acreage response to price changes has been studied by Jai Krishna and M.S. Rao". The adjustment of farmers in acreage allocation to a change in the price level is not an instantaneous process but rather a process involving time and facing weather uncertainties or technological changes in production. Under such conditions the adjustment lag model is considered appropriate for measuring farmers' response behaviour. Following Nerlove's seminal work on the dynamics of supply response, this model has been widely used by the number of researchers in agricultural supply response studies. And with a particular emphasis on the agriculture of developing countries.

Most of the supply response studies in Indian agriculture have almost confirmed the hypothesis of positive supply response to farmers in post-independence period in India as they have estimated supply response functions for specific regions in India. However, due to inter- state variations in resource endowments the value of area adjustment co-efficient exceeding unity and also of negative magnitude at state levels have also been reported. Since the magnitude of farmers response to different factors varies not only from crop to crop but even for the same crop from district to district due to agro-climatic factors, adoption of technology, institutional and other socio-economic factors. Therefore, such factors must be taken into account while examining response behaviour of the farmers.