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Explorating the Rationality of Rice Supply Response in Bangladesh.

Md. Abdul Jabber
Chief Scientific Officer
Agricultural Economics Division, BRRI, Gazipur

Abstract/ Executive Summary:

Objectives of this study were to evaluate macro level price changes over the years; and to examine output price responsiveness of the rice producers in Bangladesh. Both published and unpublished secondary data were used in this study. Analytical Model: Single equation model and supply response model/equations were used. It was observed that when rice price remains below the expected level, it does not affect rice production acreage. Because rice is the staple food. It was also found that the output price of rice does not act as a determinant of production decision.

Keywords: Rice supply, Analytical model, Rice supply response, Macro level price changes.

Location: Agricultural Economics Division, BRRI, Gazipur

Start Date: 01-07-2004

End Date: 30-07-2005

Program Area: Socio-economic and Policy

Commodity: Rice

Objectives:

To evaluate macro level price changes over the years; and
To examine output price responsiveness of the rice producers in Bangladesh.

Methodology:

Both published and unpublished secondary data were used in this study. The data used to construct the supply response model are from Bangladesh Bureau of statistics (BBS), while data on production, acreage and inputs under rice period 1972-2005 in Bangladesh are also from the BBS. Output price data were collected from the Directorate of Agricultural Marketing (DAM) and about new seed information and price data from BADC. Analytical Model: Single equation model and supply response model/equations were used.

Source of Information: BRRI. Proceedings of the BRRI Annual Internal Review for 2004-2005. Bangladesh Rice Research Institute (BRRI). Gazipur -1701.

Article Link (Online Journal):

Funding Source:

1. Government

Budget:

Total Budget (Tk.) :

Achievement/Findings:

- When rice price remains below the expected level, it does not affect rice production acreage. Because rice is the staple food.

- In Bangladesh, the output price of rice does not act as a determinant of production decision.

- The controlled price of production inputs like fertilizer, insecticides and irrigation as well as, agricultural credit and region-wise new seed replacement could encourage farmers to devote more areas to high-yielding rice varieties. This would enhance overall production growth rate in the long run.

Knowledge Management: Report/Proceedings