Market price volatility and its impact on farmer income in major pulse-producing regions

Abstract:

Price volatility in pulse markets has long been a source of income uncertainty for Indian farmers, but few investigations have directly linked market price swings to household-level economic outcomes. This research analyzed price volatility patterns for five major pulse crops across regulated markets in northern Karnataka over 2018-2022 and assessed their impact on farmer income through a household survey of 240 pulse growers in the Dharwad and Belgaum districts. Black gram exhibited the highest coefficient of variation in monthly prices (28.4%), followed by pigeon pea (26.8%). In high-volatility years, net farm income from pulses dropped by 30.9% compared to low-volatility years, marketed surplus declined by 19.1%, and household indebtedness increased by 54.4%. GARCH (1,1) modelling confirmed that volatility clustering is present in all five pulse markets, meaning that periods of high price instability tend to persist over multiple months. These findings underline the need for stronger price stabilization mechanisms, including more effective minimum support price procurement and expanded warehouse receipt financing, to protect pulse growers from the income erosion caused by unpredictable markets.