EMPIRICAL ESTIMATION OF MARKETED SURPLUS OF RICE IN BANGLADESH: A CRITICAL REVIEW *

Abstract

Understanding marketed surplus and marketing behaviour of producers helps design technology, policy and institutions to facilitate the process of commercialization of agriculture. In this paper, empirical studies on marketed surplus of rice have been reviewed with a focus on the concepts and methods used, their strengths and weaknesses, and some recommendations have been made to improve estimation in future studies. I. BACKGROUND The flow of food grains and prices in the market will depend on marketed surplus of producers and their marketing patterns as well as the stocking and marketing behaviour of traders. Marketed surplus of food grain among smallholder producers is of interest to researchers and policy makers because market participation is essential for farmers for raising farm income and welfare. Also adequate regular supply of food grain in the market is essential to keep food prices at affordable levels for consumers. As the economy develops, number and proportion of population engaged in agriculture usually decline though the size of the overall population increase. Consequently, food grain producers need to produce not only enough for themselves but also for an expanding non-producing consumer in both rural and urban areas so that dependence on import or aid can be avoided or at least minimized. On the other hand, if surplus above national food need is produced, then there will be scope for export of food grain to raise both producers' and national income. Understanding marketed surplus and marketing behaviour of producers helps design technology, policy and institutions to facilitate the process of commercialization of agriculture. *Derived from a longer report Estimation of private stock of rice in Bangladesh - In search of a practicable methodology prepared by the author for the National Food Policy Capacity Strengthening Programme (NFPCSP), implemented by the Food and Agriculture Organization of the United Nations (FAO) and the Food Policy Monitoring Unit (FPMU), Ministry of Food and Disaster Management, Government of the People's Republic of Bangladesh with support from EU and USAID. Comments on an earlier version of the full report by Mr Ciro Fiorillo, Dr Nathalie Bouche and Professor Rezaul Karim Talukder of the NFPCSP Technical Assistance Team, and Mr. Ruhul Amin, ex-Director General of the FPMU were extremely helpful for improving the content and clarification of several issues. Comments of two anonymous reviewers of the journal are also gratefully acknowledged. However, the author alone is responsible for the content of the paper.