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Supply response of farm program in rice-growing states

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  • A. Chowdhury
  • Cary Herndon

Abstract

This study aims to develop an acreage response model for rice-growing states using a policy-inducing variable. The single equation regression model for each rice-producing state is estimated by using the ordinary least square multiple regression procedure after log transformation. Data for the period 1959 to 1988 for acreage plantation, market price, target price, loan rate, and acreage reduction rate are used in designing the policy-inducing price. The estimated parameter shows a significant inverse relationship between the rice acreage planted and policy-inducing prices in all of the rice-growing states, with the exception of Louisiana. The estimated short-run elasticities for Arkansas, California, Louisiana, Mississippi, and Texas are -0.36, -0.68, 0.30, -0.37, and -0.59, respectively. The heterogeneity in the magnitude of the elasticities suggests the need for redesigning the rice programs to generate desirable acreage responses from all of the rice-growing states. Copyright International Atlantic Economic Society 2000

Suggested Citation

  • A. Chowdhury & Cary Herndon, 2000. "Supply response of farm program in rice-growing states," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 6(4), pages 771-781, November.
    • Handle: RePEc:kap:iaecre:v:6:y:2000:i:4:p:771-781:10.1007/bf02295387
    DOI: 10.1007/BF02295387
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    1. Bailey, Kenneth W. & Womack, Abner W., 1985. "Wheat Acreage Response: A Regional Econometric Investigation," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 17(2), pages 1-10, December.
    2. Marc Nerlove, 1958. "Distributed lags and Estimation of Long-Run Supply and Demand Elasticities: Theoretical Considerations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 40(2), pages 301-310.
    3. Bailey, Kenneth W. & Womack, Abner W., 1985. "Wheat Acreage Response: Investigation a Regional Econometric Investigation," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 17(2), pages 171-180, December.
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