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GOVERNMENT POLICIES AND AGRICULTURAL SUPPLY RESPONSE: PADDY IN SRI LANKA
Author(s) -
Gunawardana P. J.,
Oczkowski E. A.
Publication year - 1992
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.1992.tb00217.x
Subject(s) - agricultural economics , economics , incentive , agriculture , yield (engineering) , irrigation , price elasticity of supply , sri lanka , production (economics) , econometric model , government (linguistics) , price elasticity of demand , business , microeconomics , econometrics , agronomy , ecology , linguistics , philosophy , materials science , tanzania , socioeconomics , metallurgy , biology
An aggregate analysis of supply response in the paddy (rice) sector of Sri Lanka during 1952‐87 is conducted to identify the impact of pricing policy, irrigation programmes, institutional credit and concessional sales on area, yield and overall supply. The focus of the estimation procedure is the selection of an appropriate functional form for regressions and on the price variable that best represents the price to which producers respond in making area and yield decisions. In the case of both area and yield, the econometric criteria favour the acceptance of log‐linear equations with the ratio of the guaranteed price of paddy to fertiliser price. On the basis of overall supply elasticity estimates, it is concluded that while pricing policy, irrigation programmes and institutional credit provide incentives to the expansion of paddy production, concessional sales of rice act as a disincentive.