THE AGRICULTURAL TERMS OF TRADE IN BANGLADESH: AN ECONOMETRIC ANALYSIS OF TRENDS AND MOVEMENTS, 1952–2006

This paper investigates the trends and movements of agricultural prices, industrial prices and the agricultural terms of trade in Bangladesh with annual data for the period 1952–2006. The ADF and KPSS tests results suggest that both agricultural and industrial prices have a unit root while the agricultural terms of trade is trend-stationary. These results remain unchanged if allowance is made in the unit root test for the possibility of a structural break during 1971–1975 (when Bangladesh gained independence from Pakistan and experienced economic shocks) by applying the two-step procedure of Perron (1989 ). A simple Nerlovian agricultural price determination model is specified within the framework of aggregate demand and aggregate supply. The Johansen cointegration test results for the periods 1953–2006 and 1973–2006 suggest that there exists a cointegral relationship between agricultural prices, industrial prices, per-capita real income and the real exchange rate between the Bangladeshi taka and the US dollar under the restriction that per-capita real income and the real exchange rate are 'long-run forcing variables' in the sense of Pesaran and Shin (1995 ), and Pesaran, Shin and Smith (1996 ). The paper estimates a four-variable vector error-correction (VEC) model and conducts an impulse response analysis for the post-independence period, 1973–2006.     

ADOPTION AND PRODUCTIVITY IMPACT OF MODERN RICE VARIETIES IN BANGLADESH

Technological progress has helped Bangladesh to achieve self‐sufficiency in rice production in 2001 from a heavy import‐dependence, despite doubling of population and a reduction in arable land since its independence in 1971. As the adoption of modern varieties (MV) of rice is reaching a plateau, particularly for the irrigated ecosystem, an important issue is whether the research system will be able to sustain the growth of production. The present paper addresses the following questions: (i) to what extent farmers have been replacing the old MV with the new MV, and (ii) what has been the impact of the variety replacement on productivity and profitability. How crucial is the continuous research and release of improved rice varieties toward improving farm production and income for farmers comes out as a clear message to policymakers from the current paper.     

Socioeconomic Changes and the Decline in Poverty: A View from Three Villages in the Philippines, 1985–1997*

The present paper examines socioeconomic changes and decline in rural poverty using a panel dataset collected in the Philippine villages in 1985, 1993 and 1997. The most important finding is the transition of the rural economy away from a regime of low nonfarm income to a regime of high nonfarm income accompanied by a marked decline in poverty. The relative contribution of access to land on rural poverty reduction declined, whereas the relative contribution of human capital, more importantly represented by college schooling, increased over time.     

Did the commodity price spike increase rural poverty? Evidence from a long‐run panel in Bangladesh

We assess the effects of the dramatic rise in agricultural commodity prices during 2007–2008 on income dynamics and poverty among rural households in Bangladesh. A unique panel data set allows us to put the effects of recent events in the context of long‐run trends in income and poverty. We use data from a nationally representative longitudinal survey of rural households in Bangladesh collected in four waves in 1988, 2000, 2004, and 2008. Nargis and Hossain (Nargis, N., Hossain, M., 2006. Income dynamics and pathways out of rural poverty in Bangladesh, 1988–2004. Agric. Econ. 35, 425–435) analysed income dynamics and poverty incidence for the first three waves, finding a declining trend in both the incidence and severity of poverty, aided in particular by human capital development and off‐farm employment opportunities. We update and extend the analysis to include data collected in 2008, at the height of a spike in agricultural prices. We find that the price of a balanced food basket increased by more than 50% during 2000–2008, while household income rose only 15%. As a result the incidence and severity of rural poverty in Bangladesh sunk to pre‐2000 levels during 2004–2008. Thus, the price spikes in 2007–2008 helped push an additional 13 million people into poverty in rural Bangladesh. Moreover, we find that the determinants of poverty have not been time‐invariant. In particular, agricultural production, which had previously been associated with a higher incidence of poverty, served as a hedge against higher food prices during 2004–2008.     

PRODUCTIVITY IMPACT OF THE MODERN VARIETIES OF RICE IN INDIA

The present paper analyzed the long‐term yield growth and total factor productivity (TFP) growth by applying Tornqvist‐Theil index method for two periods, namely, 1970–85 (early Green Revolution) and 1986–2000 (late Green Revolution), for major rice‐growing states of India. The yield data shows an increasing long‐term growth trend throughout the Green Revolution period in irrigated states where modern variety (MV) adoption was nearly complete. However, yield advances started to slow down for intensive irrigated rice systems in the 1990s, whereas rainfed ecosystems have increased during the late Green Revolution period. The domestic spillovers of MV from irrigated to rainfed states is likely to be one of the contributing factors to increased TFP growth in ranifed areas after the 1980s. This implies that the MV of rice developed for irrigated ecosystems have also benefited substantially the rainfed‐dominant eastern Indian states in the long run where partial irrigation facilities such as shallow tube wells were created after the mid‐1980s.     

Spatial patterns of rural poverty and their relationship with welfare-influencing factors in Bangladesh

This study determines the spatial variation of rural poverty in Bangladesh and its relation to people’s livelihood assets affecting their ability to procure food. We estimated household income for over 1 million census households using a predictor model based on a nationally representative sample survey data set. We computed and mapped poverty indices for 415 rural subdistricts revealing distinct areas with high poverty incidence that correspond with ecologically depressed areas. However, other livelihood-influencing factors such as education, accessibility and services are significantly correlated with poverty. This indicates the need for continued focus on providing education and access to income-generating opportunities so that the poor can better meet their food needs. Geographically weighted regression analysis indicated spatial differences in the relative importance of various poverty-influencing factors. Multivariate clustering of the local parameter (β) estimates of the determinant factors revealed distinct spatial relationships, which have implications on poverty alleviation interventions specific to the different regions.