Acreage response of sugarcane to price and non-price factors in Punjab

The area under sugarcane has been squeezed over time and larger area was shift to paddy and wheat cultivation in Punjab. An allocation of area to sugarcane cultivation was influenced by price and non-price factors. Considering the factors, the acreage response of sugarcane was analyzed by employing the Nerlovian Model in Punjab. The study revealed the positive response of the farmers to changes in sugarcane price in deciding the allocation of area under sugarcane and its relative income also affects sugarcane acreage. The non-price factors such as lagged sugarcane area and yield of sugarcane affects the acreage under sugarcane in the state. The elasticity of area under sugarcane with respect to both price and non-price factors was higher in short-run than the long-run. It was further revealed that adjustment of sugarcane acreage was higher in the long-run than in short-run.