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Demand, Supply Estimation and Projection of Wheat Situation in Bangladesh

M.A.Matin
Senior Scientific Officer, Agricultural Economics Division, Bangladesh Agricultural Research Institute, Gazipur.

Shamsul Alam
Professor at the Department of Cooperation and Marketing, Bangladesh Agricultural University, Mymensingh-2202.

Abstract/ Executive Summary:

This paper fills an information gap regarding factors affecting the supply and demand for wheat in Bangladesh. The short and long run supply elasticities were estimated using the Nerlovian Partial Adjustment model while demand elasticities were estimated by single equation model and different types of functions were fitted to study the income consumption relationship for wheat in Bangladesh. The gap between demand and supply has also been worked out. The demand for wheat will continue to increase rapidly but its demand in the urban areas will increase at a substantially higher rate. The study projected the future demand and supply of wheat up to 2012 A.D. The projections revealed that the country would face the shortage of wheat of about 2314 thousand tones during the period 2003 to 2012. So it was suggested that the need for mapping the demand and supply management strategy in the country be met by both the Ministry of Food and Agriculture as soon as possible to cope up the demand situation.

Keywords: Demand, Supply estimation, Consumption, Wheat

Location: Rangpur, Dinajpur, Rajshahi and Pabna

Start Date: 00-00-1982

End Date: 00-00-1999

Program Area: Socio-economic and Policy

Commodity: Wheat

Objectives:

To study the income consumption relationship for wheat in Bangladesh.

Methodology:

Selection of the study area: Four districts of Bangladesh namely Rangpur, Dinajpur, Rajshahi and Pabna were selected for major wheat growing areas for this study. These four districts contributed more than 51 percent towards the country's wheat production (BBS, 1998 p.144). In respect of weather, the western part is more favorable for wheat cultivation. The physical, climatical and socioeconomic conditions differ from region to region. Moreover, the magnitude of farmers' response to price varies with crop and for the same crop among different regions/ districts because of variations in resource endowments. So attempts were made to estimate the response of farmers to price and non-price variations of wheat supply in selected districts of Bangladesh. Therefore, it was decided to conduct a supply response analysis at the district level and the country as a whole. Sources of Data Data for the present study were collected from secondary sources. Secondary data were collected from various published sources such as Bangladesh Bureau of Statistics (BBS), Department of Agricultural Extension (DAE), Department of Agricultural Marketing (DAM) and other related agencies in Bangladesh. Selection of Period of the Study For the time series analysis the study covers the time period of 1982-83 to 1998-99. This period indicates apparently the last two decades of the twentieth century covering period of intensified liberalized economy than any other time before. Therefore, time series data for the period 1982-83 to 1998-99 were employed for this study. In time series demand analysis the regression line was fitted for the country as a whole only because of non -availability of regional data. The Bangladesh Household Expenditure Survey (HES), 1995/96 provided detail information and quantities of various food items consumed by different income classes of both rural and urban people.

Source of Information: Bangladesh J. Agric. Econs XXVII, 2 (2004) 25-44

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The study projected the future demand and supply of wheat up to 2012 A.D. The projections revealed that the country would face the shortage of wheat of about 2314 thousand tones during the period 2003 to 2012. So it was suggested that the need for mapping the demand and supply management strategy in the country be met by both the Ministry of Food and Agriculture as soon as possible to cope up the demand situation.

Knowledge Management: Journal