A Study of Market Integration of Tomato in Four Major Markets in India

Tomato is one of the most important vegetable in India. It is abundantly used in almost every Indian household. Throughout the year the demand for the crop remain on the higher side, but due to seasonality of production, perishable nature, production uncertainty etc. supply shocks are often observed. These shocks adversely affect farmer's income as well as consumer spending. Market integration is a way which helps in achieving price consistency and thus lead to marketing system efficiency, the present study inspected the presence of market integration across the country's four major wholesale tomato markets during the period 2009 to 2019. Augmented Dickey Fuller test and Phillips-Perron test was used for checking the stationarity of the series. With the help of Johansen's cointegration test and Granger Causality test, price relationship across the markets were analyzed. Johansen's cointegration test confirmed the presence of long run equilibrium relationship between different selected markets. Granger causality test was used to examine the nature and direction of price transmission between market pairs and it revealed the presence of bidirectional relationship among most of the markets but also there exists unidirectional relationship among few markets.