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Demand for Fertilizer in Bangladesh - a Note

P.C. Modak
Associate Professor
Associate Professor and Lecturer, Department of Agricultural Statistics, Bangladesh Agricultural University, Mymensingh.

B.K. Barmon
Department of Statistics, Chittagong Govt. Veterinary College, Chittagong,

Abstract/ Executive Summary:

The present study attempts to estimate the regional variations in the demand for fertilizer in Bangladesh. The objectives of the study is to quantify the impact of prices of fertilizer and irrigation on fertilizer consumption in different regions in the country using time series data by the static and dynamic models. The price coefficients of the regions Dhaka, Chittagong, Rajshahi, Khulna and all Bangladesh were highly significant (p<0.01). The coefficients of irrigated area in Dhaka, Chittagong, Rajshahi, Khulna and Bangladesh as a whole were also significant (p<0.01). The regional fertilizer demand elasticities were found significant (P < 0.05). The long term price elasticities of fertilizer consumption in Dhaka, Khulna and Bangladesh were elastic but those of Chittagong and Rajshahi were inelastic

Keywords: Demand, Fertilizer, Quantify

Location:

Start Date: 00-00-1972

End Date: 00-00-1993

Program Area: Socio-economic and Policy

Commodity: Fertilizer

Objectives:

To quantify the impact of prices of fertilizer and irrigation on fertilizer consumption in different regions in the country

Methodology:

The following static and dynamic models were applied separately to time series data (1972-73 to 1992-93) for each of the four regions and aggregate of Bangladesh. Static Model The model derived by Subramaniyan and Nirmala (1991) was used to estimate the demand for fertilizer both at national and regional level. Including all the variables in the model several unsuccessful attempts were made, but neither percent of area planted to high yielding varieties, land intensity and weather condition (rainfall), nor the trend variable improved the results in Barmon's (1995) research work and hence were omitted in the model for simplicity. Then the static model became Log (F/hac) = Bo + B, log (P/Pa) + B2 log IRR + U; (1) where F/ha = consumption of fertilizer in kg/ha. P/Pa = fertilizer to rice price ratio. IRR = percent of area irrigated. U; = random disturbance term. Dynamic Model In this study the model used consists of two parts: a long-run dynamic function and an adjustment equation. The functional form chosen for the estimation of demand function is an equation linear in the logarithms of fertilizer to rice price ratio.

Source of Information: Bangladesh J. Agric. Econs. XIX, I and 2 (1996): 97-103

Article Link (Online Journal):

Funding Source:

Total Budget (Tk.) :

Achievement/Findings:

The price coefficients of the regions Dhaka, Chittagong, Rajshahi, Khulna and all Bangladesh were highly significant (p<0.01). The coefficients of irrigated area in Dhaka, Chittagong, Rajshahi, Khulna and Bangladesh as a whole were also significant (p<0.01). The regional fertilizer demand elasticities were found significant (P < 0.05). The long term price elasticities of fertilizer consumption in Dhaka, Khulna and Bangladesh were elastic but those of Chittagong and Rajshahi were inelastic.

Knowledge Management: Journal