Gerak Balas Penawaran Industri Lada Malaysia

The Malaysian pepper industry started to decline in 1980 due to falling prices and increasing cost of production. In general, pepper farms in Malaysia are small with many backward farm holdings. This paper examined three questions. One, is the output of pepper industry responsive to prices. Two, does the supply response of pepper cultivation industry depict abnormal behavior as found in many output of backward farms. Three, does pepper output show greater response toward the prices of alternative crop than its own price? All equations in this paper are spestfied based on structural supply response model which is a modification of models used by Wickens and Greenfield ( 1973 ) ; and a supply response model which consists of behavioral supply equations with partial adjustment scheme. The data used are annual time series ranging from 1972 to 1989. All equations were estimated using OLS. For equation with lag-dependent and are serially correlated, the equation is reestimated using the appropriate method. From the estimated result, it was found that pepper supply response equation are best specified using simple adjustment scheme with nominal prices. The findings suggest that pepper output is not responsive to its current price but respond positively to its lag four year price. The result also indicated that pepper output respond negatively to the price of alternative crop. However, the influence is small. Also, it was found that pepper output is very responsive toward changes in cost of production. Other factors, specifically weather, do not influence pepper output.