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An Analysis of Onion and Garlic Production, Their Prices and Consumption Level in Bangladesh

S.C. Barman
Agricultural Economics and Statistics Section, BARl, Gazipur-170I, Bangladesh

Abstract/ Executive Summary:

The linear and compound growth analysis of onion and garlic production over 33 years in Bangladesh revealed an inconsistent growth rate in relation to area, yield and production components. However, in decomposition analysis, so far as area, yield and their interaction effects are concerned both for onion and garlic indicated that yield and interaction effects are positively correlated to total production while area effect is negatively associated with it over this period. Due to less stress in the past for these crops and left marginal land in comparison to cereal crops in growing season, resulted in lower total production and caused a deficit in local requirements and higher degree of variation in both nominal and real prices of the products in the markets apart from seasonal movement. The annual negative compound growth rate (CGR) of real prices of onion and garlic as identified over 14 years indicated a lower purchasing power of the people and discarding utilization of these two products because of instantly higher and erratic behavior of the prices in the market and also lower degree of supply management activities. This situation demands a strong production and consistent import policy in national economy.

Keywords: Onion, Garlic, Production, Their prices, National economy.

Location: Directorate of Agricultural Marketing, BBS.

Start Date: 00-00-2002

End Date: 00-00-2003

Program Area: Socio-economic and Policy

Commodity: Onion, Garlic

Objectives:

To study the growth in area, production and yield of onion and garlic.
To study the variability in area, production and productivity.
To identify the contribution of area, yield and their interaction (area and yield) effects towards an increase of production.
To study the price behavior of onion and garlic over decades and identify annual consumption at national level.

Methodology:

The linear and exponential functions with transformation technique were used for determination of linear and compound growth rates respectively with regard to area, production and productivity of onion and garlic in Bangladesh. To study the contribution of area and yield and their interaction effects towards an increase in production Minhas and Vaidyanathan decomposition technique was used for computing the influence of individual components.To study the trend of wholesale prices of onion and garlic over decade with respect to demand and supply situation, quadratic function i.e., third degree polynomial was tried using the least square technique. Linear and exponential functions were also used to analyze the demand, supply, import and utilization or consumption data. Imported quantity of the said crops in a particular year in fact may be over flown in consumption in the subsequent year. But total quantity imported together with quantity available from local production was considered as quantity consumed in each year in the analysis. The best fitted functions were used to present and interpret the results.The relative fitness of the function has been judged by comparing its R² value (Coefficient of multiple determination). A function with higher R² value is always desired and reflects a good fitness of the function with included variables and the value expressed in percentage. The coefficient of variation (C.V = d/m x 100) is used to identify the variability 111 area, production, and productivity and also prices of onion and garlic and their consumption level. Hence d = statistical deviation and m = mean.

Source of Information: Bangladesh Journal of Agriculture, pp: 67-75, Vol: (29 & 30), (2004 & 2005), ISSN: 0253-5408

Article Link (Online Journal):

Funding Source:

1.

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The growth analysis of area, yield and production and their interaction effects revealed that yield and interaction effects were positively correlated to the total production while area effect was negatively related. The main reason was attributed to less stress in production for onion and garlic along with use of marginal land area to cultivate these crops. Although the yield of onion and garlic showed a positive interaction effect to the total production but it is not enough to meet the local demand for these two crops. It is apparent from this analysis that domestic production level is always less than consumption level. Deficit in requirements with lower domestic production coupled with lower degree of import and supply management of onion and garlic resulted in erratic and inconsistent movement of prices. However, the monthly average wholesale prices of onion and garlic showed a seasonal pattern for the same period. But the negative CGR of real prices of onion and garlic indicated that the purchasing power of the people decreased by 0.84 and 0.11 percents annually for respective items during that period.

Knowledge Management: Journal