Supply response analysis of corn in Indonesia
1989
Widodo, Susilo
Factors affecting corn supply in Indonesia from 1970 to 1987; (1) estimating the response function of corn, both for the nation as a whole and for provinces within and outside of Java, (2) by analyzing the short and long run supply response elasticities of corn. The Nerlovian adjustment model is used for estimating the acreage and yield responses of corn in Indonesia. Yield response for corn is statistically better than acreage response. The supply response to corn price and to non-price factors (technology) is positive, while to fertilizer price is negative and significant, except in East Java province. Corn acreage, yield and output elasticities with respect to previous corn prices are generally inelastic, except in South Sulawesi province. Farmers outside Java tend to be more responsive to input than to output prices, but farmers in Java are contrast. Farmers are more likely to respond to the prices of corn and competing crops than to input prices. Corn farmers are responsive to both output and input (fertilizer) prices. Corn in Indonesia is grown by small farmers who constitute the lowest income groups in rural areas. Inefficient cash flow at the beginning of a growing season is therefore a common constraint, particularly for buying good quality (improved) seed and fertilizer.
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