Did Covid-19 Impacted Market Arrivals and Prices of Major Food Commodities in India: Evidence from Extended Time Series Analysis

Abstract

The COVID-19 pandemic and subsequent lockdown policy significantly impacted all sectors of the economy, including agriculture. It disrupted the market’s normal functions in multiple ways; hence, this study was conducted using extended time series data to estimate the impact of the nationwide lockdown on market arrivals, price margin, and wholesale and retail prices of major food commodities. The study employed the multiple policy interventions interrupted time series analysis (ITSA) model to estimate pre-and post-intervention price trends change following lockdowns in 2020 and 2021. The results indicated that most agricultural commodities witnessed a substantial decrease in market arrivals, and there were heterogeneous effects on price margins across commodities and lockdown periods. ITSA results reveal that wholesale and retail prices for wheat and rice decreased significantly due to record crop harvests in 2019–20 and free distribution through Government welfare programs (PMGKAY). In contrast, the wholesale and retail price of pulses dal and mustard oil increased significantly during the lockdown period of 2020 and 2021. Overall, the Government managed the lockdown in 2021 better than in 2020, enabling access to essential goods and services, transportation and other conveniences. Furthermore, the study suggests policies to enhance the supply chain’s responsiveness and resilience to future pandemics and natural disasters, given the lessons learned from the COVID-19 lockdown.