Gram is the world's third most-important food legume crop. In Rajasthan, gram is cultivated as a rainfed (Barani) crop in most of the districts. Therefore, production fluctuates year to year. The analysis of prices and market arrivals over time is important for formulating a sound agricultural price policy. Fluctuations in market arrivals largely contribute to the price instability of gram in the state. This paper conducts robust tests for market integration in wholesale gram markets in Rajasthan. The study confirmed that market price linkage and the interrelationship among the spatial markets are important in economic analysis. Inter-market price linkages and speed of adjustment to shocks showed that transportation cost has impact in determining the speed and degree of the integration The data used in the co-integration analysis consists of monthly wholesale prices of seven gram dominated markets of Rajasthan for the period from 2003 to 2012. The results of the Augmented Dickey-Fuller (ADF) unit root test for gram showed that the existing data were non-stationary but their first differences were stationary. This implies the presence of unit root in the selected market price series of gram. Hence, the gram price series were integrated of the order 1 i.e. I (1). Johansen's co-integration test for gram at least five co-integrating equation at 5 per cent level of significance. Hence markets were having long run equilibrium relationship. The results of Granger Causality Test depicted that most of the markets had bidirectional as well as unidirectional influences on gram prices. These markets affected by prices of each other. Therefore, in order to continue the present system of market integration, there is need to establish cells to generate market information and market intelligence which would provide a better platform for guiding the farmers in marketing their produce.
Co- Integration, Gram, Market and Wholesale price.
