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Effects of paddy price support withdrawal on Malaysian rice sector: time series econometric approach


Citation

Umar, Haruna Suleiman and Abdullah, Amin Mahir and Shamsudin, Mad Nasir and Mohamed, Zainal Abidin (2014) Effects of paddy price support withdrawal on Malaysian rice sector: time series econometric approach. Asian Journal of Agriculture and Rural Development, 4 (7). pp. 401-413. ISSN 2304-1455; ESSN: 2224-4433

Abstract

The study simulated effects of paddy price support withdrawal, as an alternative policy, on key variables namely domestic rice supply, domestic rice demand, net import of rice, area planted to paddy and paddy producer price. Time series data (1980-2012) were collected and analyzed using Autoregressive Distributed lag (ARDL). The long run coefficients or elasticities generated were used in scenarios simulation through appropriate simulation technique. The results show that, on the average, paddy price support withdrawal would affect the rice sector by 2020 in the following ways: 13% decline in domestic rice production; 23% increase in net rice import; area planted to paddy decrease in size by 13%; and, paddy producer price reduce by 20%. However, there was no effect on aggregate rice consumption. Since the country is concern about raising farm income and ensuring rice food security, sustaining the paddy support price is worthwhile policy in order to avoid a decline in paddy producer price (income) and surge in import bills.


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Additional Metadata

Item Type: Article
Divisions: Faculty of Agriculture
Publisher: Asian Economic and Social Society
Keywords: Paddy price support withdrawal; Simulation; Food security; Rice sector
Depositing User: Nabilah Mustapa
Date Deposited: 23 May 2015 12:15
Last Modified: 11 Jul 2017 09:51
URI: http://psasir.upm.edu.my/id/eprint/37374
Statistic Details: View Download Statistic

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