Price and market relationships for corn in the Philippines
Date
1965-01
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Abstract
The objective of this study is to analyze production, price and market relationships for corn in the Philippines and its nine regions. Particular attention is given to estimation of supply relationships.
A theoretical framework was formulated for a complete empirical analysis of supply and demand relationships for corn. The supply response functions were estimated statistically using the linear regression techniques. Both simple and distributed lag supply relationships were estimated.
The rapid increase in the production of corn in the Philippines has resulted primarily from an increase in area. Corn yields have remained relatively stable at about 10 cavans (570 kgs) per hectare since the early 1930's. This implies that yield relationships can, for the most part, be ignored and that the supply analysis be focused primarily on the response of area to price and other factors.
The secular and seasonal patterns of farm, wholesale and retail prices of corn as well as their margins were analyzed. From a policy viewpoint, an analysis of the price margins is important in understanding the implications of government price policies at various levels. Price changes at any one level of the marketing system result in efficient shifts in production and consumption only if the marketing system reflects changes in demand at the consumer level back to the producer and if it transmits the price effects of a change in supply from the farm to the retail level. It appears, from this analysis, that the marketing system does perform these functions efficiently.
The supply analysis indicates that in most regions Philippine farmers do respond to changes in the price of corn relative to alternative crops by shifting acreage in the same direction as the relative price changes. The short run elasticities of corn hectarage with respect to price which ranged typically from +.10 - +.60 were found comparable with those of the same crop and other subsistence crops in other Asian countries.
Besides the price of corn, alternative crop prices, agricultural wage rates and technology were important factors in influencing corn hectarage in the Philippines.
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Corn