Co-integration of Finger millet (ragi) markets using Engle Granger causality test in Karnataka

This study was undertaken to know the market co- integration of finger millet (Ragi) in major markets of Karnataka by using a time series data from January 2005 to 2016. The results of unit root test indicated that, initially price series were non-stationary, after the first difference the price series becomes stationary. The Johnson's multiple co-integration results imply that, out of five markets, three were cointegrated at 5% level of significance, implying that the selected Finger millet markets had a long-run equilibrium relationship and there existed co-integration among these markets. Kadur market price has shown a bidirectional influence on the prices of Bengaluru, Tumakuru and Nagamangala markets implying that the former market in each pair Granger causes the wholesale price formation in the latter market which in turn provides the feedback to the former market as well. The results of Vector Error Correction Model depicted that the coefficient of speed of adjustment ranged from - 0.005 to 0.027, which indicates that between 0.5% and 2.7% of divergence from the long-run equilibrium was being corrected each month. Strengthening of physical infrastructure, transparent, agricultural policies in the state and use of market information and communication technology will help in the development of uniform and a single integrated economic market.