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Policy Incentives for Selected Agricultural Commodities in Bangladesh

F.A.Huda
Lecturer
Lecturer in the Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh, Bangladesh.

R.K.Talukder
Professor
Professor, Department of Agricultural Economics, Bangladesh Agricultural University, Mymensingh, Bangladesh.

Abstract/ Executive Summary:

The paper evaluated the agricultural incentives in terms of levels of protection of selected agricultural commodities in Bangladesh for the period 1980-1998. Secondary data from various official and private sources were collected and compiled to derive the necessary parameters and coefficients used in the analysis. NPC and NRP were measured by the proportional difference between the domestic producer price and the border price (adjusting for distribution, transportation, and other marketing costs). Likewise EPC and ERP were measured by considering the value-added components for fuller protection representation of incentive. The results showed that the main cereal crop rice was marginally protected for the policy goal of self-sufficiency. Wheat, jute, and potato were negatively protected during the period under review. But sugar production was highly protected due to inefficiency in publicly managed enterprise.

Keywords: Policy incentives, Agricultural commodities

Location:

Start Date: 00-00-1980

End Date: 00-00-1998

Program Area: Socio-economic and Policy

Non-commodity: Analysis and interpretations

Objectives:

To examine the incentive structure prevailing in the crop agriculture of Bangladesh through analysis of the levels of protections

Methodology:

Data Source: The study is based on published and unpublished data of various national and international agencies. The main sources of data were various publications of the Bangladesh Bureau of Statistics (BBS), Bangladesh Bank, World Bank, and Food and Agriculture Organization (FAO) of the United Nations. Some of the specific documents were Statistical Yearbook of Bangladesh (1985,1999), Yearbook of Agricultural Statistics of Bangladesh (1998), Report on Aus, Aman and Jute Crop Survey 1993-94 of the BBS (1999), International Financial Statistics of the World Bank; Commodity Outlook of the FAO and Economic Trends (2000) of the Bangladesh Bank. In addition, various unpublished documents and sources were also extensively used for obtaining data for the study. Measuring the Impact of Policies on Agricultural Incentives the outcome of economic information from which farmers derive expectations. An optimum economic incentive provides the information that leads producers to allocate resources in ways that result in a maximum of production that clears the market at the ruling price (Schultz 1978). The policy regime regarding foreign trade and exchange rate management can affect the structure of incentives within agriculture as well as between agriculture and other sectors, through direct and indirect effects on domestic price formation. The direct effect on prices arises from commodity-specific policies such as taxes; subsidies or quantitative restrictions on export and import (Mahmud et a1.1993). This effect is measured by the proportional difference between the domestic price and the border price (import or export parity price) at the prevailing official exchange rate.

Source of Information: Bangladesh J. Agric. Econs. XXIII, 1 & 2(2000) 117-125

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The results showed that the main cereal crop rice was marginally protected for the policy goal of self-sufficiency. Wheat, jute, and potato were negatively protected during the period under review. But sugar production was highly protected due to inefficiency in publicly managed enterprise.

Knowledge Management: Journal