IDEAS home Printed from https://ideas.repec.org/a/ags/ijfaec/186272.html
   My bibliography  Save this article

Acreage Response Of Sugarcane To Price And Non Price Factors In Khyber Pakhtunkhwa

Author

Listed:
  • Saddiq, Muhammad
  • Fayaz, Muhammad
  • Hussain, Zahid
  • Shahab, Muhammad
  • Ullah, Irfan

Abstract

This study analyzed 42 years’ time series data from 1970-2011 for the acreage response of sugarcane to price and non-price factors in Khyber Pakhtunkhwa. Data was tested for major expected problems of time series i.e. Autocorrelation and Stationarity. For autocorrelation Durban h statistics was used and the value (0.539) indicates no serial Autocorrelation in the data set. While Augmented Dickey Fuller test was used for detection of Stationarity and the data was stationary at lag one. The study follows Nerlovian Partial Adjustment linear and non-linear models for acreage response. While Vector Auto Regression technique was used to estimate the effect of price and non-price factors on acreage allocation decisions of the farmers for sugarcane in the study area. The empirical results show that short run and long run elastisities are inelastic for all the variables and statistically significant at 5% significance level except average rainfall. Further, the influence of price, yield, and lag area are positive and significant in affecting acreage allocation decision. This means that if price, yield and lag area are enhanced, the acreage allocation of sugarcane might improve in-elastically. The relatively low values of coefficients obtained from the regression analysis indicates that sugarcane producers in making acreage allocation influenced more by their ideas of expected price than by previous year price. Similarly the magnitude of the linear and log coefficient of yield (0.676) and (0.208) suggesting that if rising trend in sugarcane yield persists it will help farmers’ expansion of sugarcane cultivation in future. Further, the relatively high value of the coefficients of lagged area (0.300) and (0.298) of sugarcane suggests that their area allocation adjust quickly for changes in expected profit. As the literature shows that mostly price is the main factors in shifting the area allocation of any crop while this paper shows that lag area was a main factor because the land of Khyber Pakhtukhwa is suitable for sugarcane production and mostly they produce Gurr from sugarcane which they used for self-consumption. . Improved technological innovations will boost the sugar-cane production. Hence, the Government should explore ways to make available the same to the farmers.

Suggested Citation

  • Saddiq, Muhammad & Fayaz, Muhammad & Hussain, Zahid & Shahab, Muhammad & Ullah, Irfan, 2013. "Acreage Response Of Sugarcane To Price And Non Price Factors In Khyber Pakhtunkhwa," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(3), pages 1-8, July.
  • Handle: RePEc:ags:ijfaec:186272
    DOI: 10.22004/ag.econ.186272
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/186272/files/vol2.no3.pp121.pdf
    Download Restriction: no

    File URL: https://libkey.io/10.22004/ag.econ.186272?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Alfons Weersink & Juan H. Cabas & Edward Olale, 2010. "Acreage Response to Weather, Yield, and Price," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 57-72, March.
    3. William Lin & Robert Dismukes, 2007. "Supply Response under Risk: Implications for Counter-Cyclical Payments' Production Impact," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(1), pages 64-86.
    4. Coyle, Barry T., 1993. "On Modeling Systems Of Crop Acreage Demands," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 18(1), pages 1-13, July.
    5. Barten, Anton P. & Vanloot, Chris, 1996. "Price dynamics in agriculture: An exercise in historical econometrics," Economic Modelling, Elsevier, vol. 13(3), pages 315-331, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "Inter-and intra-annual global crop acreage response to prices and price risk," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 149695, Agricultural and Applied Economics Association.
    2. Mekbib G. Haile & Matthias Kalkuhl & Joachim Braun, 2014. "Inter- and intra-seasonal crop acreage response to international food prices and implications of volatility," Agricultural Economics, International Association of Agricultural Economists, vol. 45(6), pages 693-710, November.
    3. Haile, Mekbib G. & Kalkuhl, Matthias & von Braun, Joachim, 2013. "Short-term global crop acreage response to international food prices and implications of volatility," Discussion Papers 145308, University of Bonn, Center for Development Research (ZEF).
    4. Alfons Weersink & Juan H. Cabas & Edward Olale, 2010. "Acreage Response to Weather, Yield, and Price," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 57-72, March.
    5. Haile, Mekbib G. & Kalkuhl, Matthias & Braun, Joachim von, 2013. "How does food supply respond to high and volatile international food prices? An empirical evaluation of inter- and intra- seasonal global crop acreage response," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161472, African Association of Agricultural Economists (AAAE).
    6. Magrini, Emiliano & Morales-Opazo, Cristian & Balie, Jean, 2014. "Supply response along the value chain in selected SSA countries: the case of grains," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197193, International Agricultural Trade Research Consortium.
    7. Hodjo, Manzamasso & Dalton, Timothy & Nakelse, Tebila, 2021. "Cereal Land Allocation Under Weather and Price Uncertainties in West Africa," 2021 Conference, August 17-31, 2021, Virtual 315177, International Association of Agricultural Economists.
    8. Williams, Brian R. & Pounds-Barnett, Gayle, 2023. "Producer Supply Response for Area Planted of Seven Major U.S. Crops," Economic Research Report 340567, United States Department of Agriculture, Economic Research Service.
    9. repec:ajn:agdeve:2017:p:16-36 is not listed on IDEAS
    10. Holt, Matthew T., 1999. "A Linear Approximate Acreage Allocation Model," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-15, December.
    11. Yan Yu & J. Stephen Clark & Qingsong Tian & Fengxian Yan, 2022. "Rice yield response to climate and price policy in high-latitude regions of China," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(5), pages 1143-1157, October.
    12. Torre Ugarte, Daniel de la & Sanford, Scott & Skinner, Robert A. & Westcott, Paul C. & Lin, William W., 2000. "Supply Response Under The 1996 Farm Act And Implications For The U.S. Field Crops Sector," Technical Bulletins 33568, United States Department of Agriculture, Economic Research Service.
    13. Donato, Romano & Carraro, Alessandro, 2015. "Modelling Acreage, Production and Yield Supply Response to Domestic Price Volatility," 2015 Fourth Congress, June 11-12, 2015, Ancona, Italy 207278, Italian Association of Agricultural and Applied Economics (AIEAA).
    14. Lin, William W. & Lucier, Gary, 2008. "Effects of Marketing Loans on U.S. Dry Peas and Lentils: Supply Response and World Trade," Economic Research Report 56454, United States Department of Agriculture, Economic Research Service.
    15. Cancino, Susan & Escalante, Giovanni Orlando Cancino, 2021. "Aplicación del modelo de ajuste parcial nerloviano para estimar la elasticidad de la oferta de plátano en Colombia," Revista Tendencias, Universidad de Narino, vol. 22(2), pages 57-75, July.
    16. McClements, L.D., 1968. "A Quarterly Econometric Model of Pig Supply," Bulletins 232763, University of Manchester, School of Economics, Agricultural Economics Department.
    17. 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.
    18. Haile, M.G. & Kalkuhl, M., 2014. "Volatility in the international food markets: implications for global agricultural supply and for market and price policy," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 49, March.
    19. Williams, Gary W. & Thompson, Robert L., 1984. "The Brazilian Soybean Industry: Economic Structure and Policy Interventions," Foreign Agricultural Economic Report (FAER) 147520, United States Department of Agriculture, Economic Research Service.
    20. Evens SALIES, 2004. "The consumption of ordinary wines in France : the effect of administered prices," Econometrics 0406003, University Library of Munich, Germany.
    21. Espinosa Acuña, Óscar A. & Vaca González, Paola A. & Avila Forero, Raúl A., 2013. "Elasticidades de demanda por electricidad e impactos macroecon_omicos del precio de la energía eléctrica en Colombia || Elasticity of Electricity Demand and Macroeconomics Impacts of Electricity Price," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 16(1), pages 216-249, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:ijfaec:186272. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iiaaktr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.