A spatial price equilibrium analysis of rice trade in Thailand
1986
Ngamsomsuke, K.
Domestic demand for rice was highly inelastic with respect to price having elasticity of -0.0366. The elasticities of export demand with respect to price and rice premium were -0.2694 and -0.3685, respectively. The elasticity of the area planted with respect to lagged price in the North, Northeast, Central Plain and South were 0.3059, 0.4365, 0.0850, and 0.1532, respectively. Yield was not price responsive but was influenced by irrigated area, fertilizer use, and amount of rainfall. The transfer cost was highly related to the distance of haul. Increase in truck capacity tends to reduce the transfer cost. Using the spatial price equilibrium model, the results showed that the domestic price would be as low as 4,997.07 baht/m.t. on average under the competitive marketing system. The reduction of rice production and abolition of rice premium would increase the equilibrium regional prices and social welfare as well. Moreover, the north, northeast and central plain are classified as the surplus regions and should export their rice to foreign countries. The south should import rice from the Central Plain or Northeast. Assessment of the transportation system indicated no significant difference in using either truck or train for rice transport. However, the most efficient route should involve combination of train and barge
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