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Production and Price Relationship of Ginger (zingiber Officinale) in Bangladesh: a Distributed Lag Model

Md. Kamrul Hasan
Spices Research Centre, Bangladesh Agricultural Research Institute, Bogra, Bangladesh

Md. Mojammel Haque
Graduate Training Institute, Bangladesh Agricultural University, Mymensingh, Bangladesh

Md. Golam Rabbani
Department of Economics, Hajee Mohammad Danesh Science and Technology University, Dinajpur, Bangladesh

Abstract/ Executive Summary:

The study aimed at analyzing the fluctuation, and production-price relationship of ginger in Bangladesh. Nineteen years (1975 to 2013) time series data of area, production and prices of ginger, collected from Bangladesh Bureau of Statistics were used to analyze the simplest method for fluctuation, and the Koyck model of distributed lag. The extent of annual price fluctuation of ginger ranged between -50 to 63 percent, while the fluctuation of area, production and yield ranged between-5 to 13, -17 to 22 and -20 to 11 percent, respectively. The study revealed that ginger production in Bangladesh had been influenced by the average price lag value formed in the market. The most striking result of the study was that the time required to get an effect on ginger production for the changes of ginger prices in Bangladesh was 19.83 years. This result shows that the farmers are very enthusiastic for growing ginger, the widely grown major spice crop. The correlation/regression coefficients indicated that the changes in lag values of the prices had a positive influence on production. It may be recommended that to keep the ginger price fluctuation under control, sustainable ginger farming and establishment of an efficient marketing organization is necessary.

Keywords: Ginger, Production Price, Lag model

Location: Bangladesh Agricultural Research Institute, Bogra, Bangladesh

Start Date:

End Date:

Program Area: Socio-economic and Policy

Commodity: Ginger

Objectives:

The overall objective of the study was to determine production and price relationship of ginger in Bangladesh. The specific objectives of the study were: to identify the price, area, production and yield fluctuation of ginger; and to determine the price and production relationship of ginger.

Methodology:

Time series data (1975 to 2013) collected from Bangladesh Bureau of Statistics were used to estimate the production and prices relationship of ginger. These data, arranged yearly, which were subjected to regression analyses using Koyck model, one of the distributed lag models. Using same data fluctuation of price, area, production and yield of ginger were estimated. Random price fluctuation of ginger was measured by using 3 years moving average. Analytical technique- The following analytical techniques were used for the study: Fluctuation in price, area, production and yield- The inter year fluctuation in prices were estimated by the simplest method as percentage change in price year by year. It is estimated as ΔPt =Pt - Pt -1/Pt -1 x 100 ……….......……… (1); Where, ?P_t=Percentage change of price in year t over the last period (year), P_t=Current year’s price in year t, P_t-1=Previous year’s price in year t-1. Distributed lag model Yt =? + ?0 Xt +?1Xt-1 +?2 Xt-2 +.....+?k Xt-k +ut ........................(2); Where, Y_t is ginger production in period t, X_t is ginger price in period t and X_t-1 is ginger price in one period earlier than t. Koyck modelYt = α (1- λ) + β0Xt + λYt-1 + vt..................................(3)

Source of Information: The Agriculturists 15(1): 01-09 (2017)

Article Link (Online Journal):

Funding Source:

Budget:

Total Budget (Tk.) :

Achievement/Findings:

The study revealed that price fluctuated more than area, production and yield of ginger in Bangladesh as a whole. The extent of random fluctuation was lower than the extent of annual fluctuation. Lower price during the current year adversely affect the next year’s production and this uncertainty in supply causes price to be fluctuated to a great extent. The calculated lag length was 1, indicating that ginger production was influenced by the prices of up to past one year. It is evident that each additional lag value results in a smaller effect on ginger production. Considering the average lag number, it can be stated that ginger producers in Bangladesh are very enthusiastic for growing ginger. However, price uncertainties resulted in fluctuations in the production of this crop in Bangladesh.

Knowledge Management: Journal