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Abstract
India is the largest producer, consumer, and exporter of spices in the world.
The demand scenario for major spices in India has been comprehensively
examined in the study. The shift in preferences of domestic consumers for
food items, increasing urbanization and rising incomes, altered demographic
and social factors and the changes in productivity of spices have brought
about changes in the pattern of their consumption and demand. A two-stage
budgeting framework, which is a recent development in the theory,
of demand with quadratic terms of total expenditure / food expenditure
and is an appropriate technique for computing the expenditure elasticities,
has been employed to work out the expenditure elasticities for spices in
India. The resultant expenditure elasticities range between 0.40 and 0.60
and do not show much disparity across different income classes or regions
and over the years. Also, the household consumption demand projections
for important spices in the country for the years 2005, 2010 and 2015 show
that the domestic demand for spices would increase further in the coming
years.