Growth, Export Performance and Competitiveness of Basmati and Non-Basmati Rice of India-an Markov Chain Approach

Abstract

Rice is one of the most important staple food crops of more than 60 per cent of the world population with a significant contribution to Agriculture. India is the one of the largest producer of rice and emerged as major player in the worlds rice exports. Factors like introduction of high yielding and quality varieties along with suitable rice production technologies during the Green Revolution period has enhanced the Indian rice production and also trade liberalization is positively influenced the Indian rice export. The value of exports of basmati rice has increased from 3.30 Crores to 51.29 Crores between 2003–04 to 2013–14, meanwhile the value of exports of non basmati rice has increased from 3.28 Crores 25.19 Crores. In this paper, the trend and stability of rice production, dynamics of changes in terms of value of exports of basmati and non basmati rice from India to different export markets have been measured by employing the Markov-Chain model. The results revealed that the rice area, production and productivity have seen a significant improvement during study period (1955–2014). Iran and Saudi Arab are found to be stable destinations for Indian basmati rice exports from Markov-Chain results. Whereas, Benin, Bangladesh and Senegal are found to be major destinations for non basmati rice exports. The most unstable markets among the non basmati rice importing countries were South Africa and Liberia with the zero per cent retention. So the policies should aim at developing good trade relations with the stable destinations to benefit from it.