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Rice Production & Analytics

wheat harvest

The crop statistics generated by the provinces and other agencies have usually been manual in character and manpower intensive. Being laborious and manual in character, there are usually inordinate delays in delivery of data. As the system is based on extrapolating the results from small samples so the data produced appear anomalous in cross examination. These shortcomings pose a problem for designing a sound food security policy and crop production system. The rice crop analytics are discussed as elasticity of demand and per capita consumption.

Elasticity of demand

The changes in price usually influence the consumption patterns of different commodities. When prices go up, the demand may decrease and vice versa. This change in quantity demanded due to prices change is called demand elasticity. The demand elasticity measures the sensitivity of the quantity demanded (Q) in response to changes in price (p). However, the change in demand of certain essential commodities may not respond proportionate to changes in consumer prices. The computational formula for the elasticity of demand is:

formula elasticity of demand

There are three scenarios of elasticity as follows:

  • If the elasticity of demand is 1, it is said to be unitary. In other words, demand of the commodity changes at the same rate as price.
  • If the elasticity of demand is more than one it is said to be elastic. It means that the change in demand of a commodity is faster than the change in its price.
  • If the elasticity of demand is less than one it is said to be inelastic. It means that the change in demand of a commodity is slower than the change in its price.

The concept is explained in the following diagram:

Diagram: Elasticity Scenarios
Diagram: Elasticity Scenarios

Pakistan Institute of Development Economics (PIDE) has worked demand elasticities of different essential food commodities in Pakistan, based on Household Integrated Economic Survey (HIES) 2011-12. Here is the data in tabular format: Own Uncompensated and Compensated Price Elasticities of Demand.

Per capita consumption

SUPARCO conducted analytics of per capita rice consumption based on the pattern followed by Pakistan Agriculture Policy Institute, Ministry of National Food Security and Research (MNFS&R). In this technique the net availability of a given food commodity for human consumption is worked as follows:

  1. Basic Statistics = Opening stocks + Production
  2. Additions = Imports
  3. Subtractions = Seed, feed and waste at 10% of production + Exports + closing stocks
  4. Availability for Human Consumption = 1+2-3

The per capita consumption was worked by dividing the human consumption by population in that given year. The analytics of rice crop statistics data was conducted for the period of 1971-2014. The rice elasticity worked by PIDE was -0.510 for uncompensated and (-) 0.473 for compensated groups. This shows a highly inelastic demand by the rice consumers. Against the above reported inelasticity of demand for rice, the analytics show the per capita consumption of rice varying from 27 kg during 1971 to 9 kg during the year 2014. The intermittent per capita consumption was 21 kg in 1982, 16 kg in 1992 and 13 kg in 2003. Thus the quantity kept on decreasing as a function of time. Such a drastic decrease in per capita rice consumption is not commensurate inelastic demand of the commodity. The ground reality is that the consumption of rice is increasing with rise in living standards. This speaks of anomalies in reported statistics of rice production and suggests that the rice production data collection techniques need a second look.

Chart: 1971-2014 Per Capita Rice Consumption
Chart: 1971-2014 Per Capita Rice Consumption

Here is also the Table 1971-2014 Per Capita Rice Consumption.

Sources

  • Harvested Area, Yield and Production: Ministry of Food and Agriculture/Ministry of National Food Security & Research; Imports and Exports (Index Mundi).
  • Population Data Source (Population for 2013 & 2014 projected at 1.6 percent growth rate): en.wikipedia.org/wiki/Demographics_of_ Pakistan#Pakistan.27s_yearly_population

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