Global rice demand: Is grain really turning into an inferior good? Mary Joanne Matriz, you Imelda Molina, 1 Harold Glenn Valera, 1 Samarendu Mohanty, you and Nelissa Jamora2 one particular 2
Cultural Sciences Division, International Grain Research Commence, Los BaГ±os, Philippines; Agriculture, Food, and Resource Economics, Michigan Express University, East Lansing, MI, USA.
Previous studies by the Food and Agriculture Firm (FAO 1971), Wong (1976), Mears (1981), and Ito et 's (1989) implied that income elasticities intended for rice in Asian countries are getting to be smaller after some time and concluded that per household rice usage in Asia has a positive relationship with income up to a certain level, but , further than that level, an inverse relationship is out there. According to the majority of of these research, including Ingco (1991) and Huang and Bouis (1996), as per capita income increases, demand for grain and other major staples declines. However , with respect to the data and methodology they own used, the authors made contrasting estimations of profits and very own price elasticities for grain and, consequently , the normality or inferiority of grain as a good also different. Barker ainsi que al (1985) cited that tastes and preferences, salary, and the price of rice relative to the price of other alternatives determine the amount of rice intake of any kind of group anytime. It is therefore crucial to include the most current data in the analysis of demand guidelines, particularly profits and value elasticities considering that consumption habits evolve after some time. Such require parameters will provide a long-run perspective for the behavior of worldwide rice demand and its future impact on foodstuff security. This kind of paper should reexamine the trend in global consumption as well as analyze the result of income changes on global rice consumption using the IRRI Global Rice Version (IGRM). The IGRM is known as a partial equilibrium structural econometric simulation model that includes 21 years old major rice-producing, -consuming, and -trading countries: the Thailand, Thailand, Pakistan, Japan, Vietnam, Myanmar, Cambodia, Bangladesh, China, India, Indonesia, South Korea, South Africa, CГґte d'Ivoire, Nigeria, Egypt, Mozambique, Sudan, Kenya, Brazil, plus the United States.
The IGRM, a representative country model, includes source, demand, control, ending stocks and shares, and marketplace equilibrium circumstances. Rice production is patterned by price separate area and yield equations. The model incorporates the local supply response of grain and different contending crops in some producing parts. On the require side, grain consumption contains food, seed, and other uses. Individual country models happen to be then connected through net trade equations to solve Thai FOB (5% broken, Bangkok) to appropriately link a person country towards the world rice economy. Considering that the rice companies are heavily distorted, farm price was resolved domestically for some of the countries. The model explicitly includes policy parameters in source, demand, ending stocks, export products, imports, and price indication equations. The information were procured from
Presented at the 28th Worldwide Rice Research Conference, 8-12 November 2010, Hanoi, Vietnam OP13: Coverage, Market, and provide Chain
nation statistical yearbooks, the Food and Agricultural Policy Research Institute (FAPRI 2010), the Production, Supply, and Division (PSD) repository, and AttachГ© Reports of the U. H. Department of Agriculture (USDA 2010). Require elasticities The partnership between changes in rice intake due to salary and cost is measured simply by income and price elasticity of require, respectively. These kinds of demand elasticities are approximated only for grain and do not think about systematic cordons to the with regard to other meals such as meats, fish, and also other cereals. Estimated income flexibility of require is indeed becoming smaller over time. The IGRM estimates specifically show that rice has already been considered an inferior good in higher income countries such as The japanese and South Korea, in major...
Referrals: Barker L, Herdt L, Rose N. 1985. The rice economy of Asia. Washington, M. C. (USA): Resources for the Future. Food and Agriculture Firm (FAO). year 1971. Agricultural commodity projections, 1970в€’1980, vol. 1, 2 . The italian capital. FAPRI (Food and Farming Policy Research Institute). 2010. World and Agricultural Perspective Database. www.fapri.iastate.edu. Huang M, Bouis They would. 1996. Strength changes in the demand for food in Asia. Meals, Agriculture, plus the Environment Discussion Paper 14. Washington, M. C. (USA): International Food Policy Analysis Institute. Ingco M. 1991. Is grain becoming an inferior good? Foodstuff demand inside the Philippines. Policy Research and External Affairs Working Conventional paper. Washington, G. C. (USA): World Financial institution.
Offered at the 30th International Grain Research Meeting, 8-12 Nov 2010, Hanoi, Vietnam OP13: Policy, Market, and Supply String
Ito S, Wesley Electronic, Peterson N, Grant T. 1989. Grain in Asia: Is it becoming an inferior very good?. Am. L. Agric. Econ. 71(1): 32-42. Mears LA. 1981. The newest rice overall economy of Dalam negri. Indonesia: Gadjah Mada School Press. USDA (United Claims Department of Agriculture). 2010. Production, Supply, and Division database and AttachГ© Studies. www.usda.gov. Wong CM. 1976. A model from the rice economy of Thailand. PhD thesis. University of Chicago.