Analysis of the supply response of coffee in the Philippines
1984
Contreras, D.P.
The empirical findings showed that coffee supply was price inelastic and that coffee farmers were less responsive to price in planning their production. Inelasticity was influenced not only by price but other variables such as: potential output and level of technology. Their implications could be gleaned from their respective coefficients, 0.56289 for -Qt and 6771.3 for technology. The coffecients determinedd the changes of the coffee supply, i.e. for every 1% change in the potential out put 0.56% changes of the coffee supply would be derived. Likewise, on the technology aspect, the same observation would be generated. The major problems that cause the slow growth in coffee productivity were lack of extension services, high cost and unavailability of inputs, long processing of loans and insufficient infrastructure facilities. The areas identified which need to be strengthened in order for the coffee industry to progress were production technology and credit scheme.
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