Relationship between production and price of garlic in Bangladesh: an analysis by using distributed lag model

Abstract

The study was conducted to aim at the relationship between production and price of garlic in Bangladesh. The experiment was carried out by using garlic production and prices data from Bangladesh Bureau of Statistics (during 1974-2011). The Koyck model of distributed lag models was used. According to the results, garlic production in Bangladesh has been influenced by the lag value of average price formed in the market. The most striking result of the study is the time required for the changes in the garlic prices in Bangladesh to an effect on garlic production of 32.33 years. This result also shows that the farmers are very enthusiastic for growing this crop, which is largely grown as a major spice crop. The value of coefficient indicated that the changes in lag values of the prices had a positive influence on production, but this influence was getting smaller. To reduce the risk and uncertainty of the price of garlic, sustainable garlic farming and establishment of an efficient marketing organization is necessary.