View
15
Download
1
Category
Tags:
Preview:
DESCRIPTION
Intra Household Resource Allocation and Rice Consumption in a Major Rice Producing Country by Dr. Khondoker Abdul Mottaleb
Citation preview
Income Shocks, Intra Household Resource Allocation and Rice Consumption in a Major
Rice Producing Country
Khondoker Abdul MottalebPostdoctoral Fellow
Social Sciences Division (SSD)K.mottaleb@irri.orgNovember 18, 2013
Exit Seminar
Poverty in the rice economies
• Staple food.• Major source of income • Poverty is persistent in the major rice growing
area• Total extremely poor people (USD 1.25/day): 1
billion• More than half of them live in major rice
producing areas, particularly in SSA and SA.• Improving livelihoods.
Emerging opportunity
300
350
400
450
500
550
600
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Asia Africa Americas Rest of World
Million tons milled rice
Additional rice needed:116 million tons by 2035
2010 global rice production
546
450
Real Challenges
Too much water Too less water
Uncertainty in the Future
More threats
Source: Stern Review on the Economics of Climate, 2006
Futuristic Technology:C4 Rice
C4 Leaf (Sorghum)
C3 Leaf (Rice)
Rice, tobacco Maize, sorghum
C4 Supercharges Photosynthesis Using A Two Compartment CO2 Concentrating Mechanism
2011 Kharif Crop in Jajpur (Orissa)
Swarna
Swarna-Sub1
Drought tolerant rice is available
• IR74371-70-1-1 has been developing targeting india as “souvagi dhan”.
• IR74371-54-1-1 has been developing targeting Philippines
• IR77080-B-34-3,IR81047-B-106- 3-4 identified promising in Mozambique.
Sahbhagi dhan
NSIC RC 192
Economic Benefits of a Drought Tolerant Rice Variety in South Asia
*Using a 5% discount rate
Climate scenario NPV (million USD) Range of IRR %
Base 2018.22 0.26-0.54
A2 1960.77 0.13-0.59
A1B 1805.46 0.17-0.43
B1 1557.79 0.17-0.57
Benefits of Development of Climate smart Rice
New Variety
Existing variety Base A2 A1B B1
World
Milled Production (mt) 530.36 +2.21 +1.74 +1.63 +1.13
Nominal price (USD/Ton) 1107.50 -20.61 -7.43 -10.27 -6.51South AsiaMilled Production (mt) 163.47 +7.40 +6.18 +5.67 +3.98
Consumption (mt) 159.77 +5.21 +5.16 +4.64 +3.39
Full paper can be accessed at: http://ageconsearch.umn.edu/bitstream/124745/2/MottalebRev.pdf
Natural disasters-> income volatility of the rice farmers
Income volatility and Resource allocation
Income volatility and negative income shocks can hamper long run human capital development.
Negative income shock can also have gender differentiated impacts (intra household resource allocation).
Literature is scanty
China, Bangladesh, India are among the disaster prone countries…
…In terms of number killed, Bangladesh topped the list with an average of 15,000 people being killed each year during 1982-1991 period (World Disaster Report-IFRC, 1993)
Year Barisal Chittagong Khulna Total
1960-1980 1 11 1 13
1981-1998 2 13 5 20
1999-2010 2 2 8 12
Total 5 26 14 45
Table 1: Major cyclonic storms from 1960-2010 that caused significant losses of
lives and properties
Source: BBS: Statistical Yearbook of Bangladesh, 2001 and 2010
Cyclone Aila, May 25-27, 2009
190 people were killed, more than 3.9 million people were affected (IFRCRC, 2010 )Destroyed late boro and Aman rice in the field
Table 3: AILA affected districts
Group Division Severely damaged districts
No. of people affected (000)
Experimental Barisal Barguna 390Barisal 357Bhola 128Jhalokati 302Patuakhali 293Pirojpur 359
Khulna Bagerhat 480Khulna 363Satkhira 170
Chittagong Noakhali 116Not affected
Control Chittagong Comilla 94Chandpur 91Feni 30Laksmipur 29Chittagong 13.53
Cox’s Bazar 29.45
A priori Conjectures
Booming repairing and construction sector
Wage rate increasesOpportunity cost for schooling
increased
Affected households need to reconstruct houses, seed beds and bunds.
Small farm households may face liquidity constraints
They need cash !Employ children in farm work
The cyclone caused substantial loss in rice production
Generated negative income shocks
Natural Experiment: double difference model
YDT Affected= D2 Not affected =D1
Difference
T=2010 YD2 (10) YD1(10) YD1(10) - YD2 (10)
T-2005 YD2 (05) YD1(05) YD1(05) - YD2 (05)
T=2000 YD2 (00) YD1(00) YD1(00) - YD2 (00)
Change YD2 (00) -YD2 (05) -YD2 (10)
YD1(00)- YD1(05) -YD1(10)
(YD1(00) - YD2 (00) )-(YD1(05) - YD2 (05))-(D1(2010) - YD2 (10))
Model Specification
itii
it
ZdummyYearAD
dummyYearADADdummyYeardummyYearY
)()2010*(
)2005*()()2010()2005(
5
43210
Y: dependent variables: Paddy income, consumption and expenditure on different itemsAD: equals 1 if a district is affected, 0 otherwise
Z: demographic variables
T: year
5
5 :the effect of the cyclone in the cyclone-affected districts compared to other districts (the difference in the effect of cyclone AILA on Y between treatment and control groups)
Study 1
Major findings:
1. Substantial loss in rice production and income2. Non-food expenditure increased3. Health expenditure increased4. Schooling expenditure decreased (drop out/year
loss)5. School admission expenditure decreased
Study 2:Intra-Household Resource Allocation
Our empirical results confirmed that the cyclone-affected households spent less on their children’s schooling and children’s school admission than did the unaffected household
When they stopped sending children to school, whom did they stop?
Boys or girls, or both? Why? Did they spend less on health issues of
boys/girls?
Lets see our Conjectures once again!
Booming repairing and construction sector
Wage rate increasesOpportunity cost of schooling can
increase
Female secondary school stipend program
Repairing and construction sector is generally male dominated
Wage rate increases-> boys opportunity cost for schooling increases than girls
School expenditure on boys declined substantially compared to the comparison group in 2010
Intra-Household Resource Allocation under Negative Income Shock:
A Natural ExperimentHealth Education
Crop income Male Female Male Female
Year 2005 dummy 16.12** -0.11 -0.34** 1.72*** 0.94***(2.55) (-0.90) (-2.04) (6.14) (4.08)
Year 2010 dummy 21.13*** 0.21* 0.35** 2.87*** 1.88***(3.36) (1.67) (2.15) (10.35) (8.29)
A dummy for cyclone-affected district (=1)
15.11***(3.33)
-0.53***(-4.48)
-0.80***(-5.08)
0.75***(3.04)
0.15(0.73)
Cyclone-affected district X Year 2005 dummy
-14.20**(-2.05)
0.45***(2.83)
0.74***(3.47)
-0.09(-0.25)
0.45(1.59)
Cyclone-affected district X Year 2010 dummy
-17.18**(-2.59)
0.45***(2.93)
0.471**(2.31)
-0.81**(-2.51)
-0.11(-0.41)
Relationship between income and rice consumption
300
350
400
450
500
550
600
Asia Africa Americas Rest of World
Million tons milled rice
Additional rice needed:116 million tons by 2035
2010 global rice production
546
450
The Demand for Cereals in Bangladesh: An Almost Ideal Demand Estimation
Estimated income and price elasticities considering six major commodities: rice, wheat, rice and wheat products, fish lentil, and vegetables.
HIES data 2000, 2005, 2010Number of households: 29760
In 2000, GDP per capita: $363In 2011 : $734 (more than 100% increased)How this income growth affected rice
consumption?
Yearly per capita consumption (KG)
Year 2000 2005 2010Rice 164.25 161.90 150.95Rice and wheat products 4.43 6.78 8.08
Wheat 7.04 5.21 10.43
Lentil 6.00 5.48 5.48
Fish 14.86 16.43 18.77
Vegetables 76.65 86.04 91.51
The Model
WhereWi= expenditure share on commodity i (piqi/M)M= total expenditure on sampled commoditiesZ= household demographics
Two stage budgeting method applied
Expenditure (income) elasticities
Rice Rice and wheat
products
Wheat Pulse Fish Vege.
2000 0.55 3.86 1.47 -0.16 3.05 -0.192005 0.56 3.02 1.56 -0.34 3.13 -0.342010
0.47 2.46 1.37 -0.06 2.21 -0.57Average
0.53 2.87 1.45 -0.17 2.62 -0.38
Price elasticity
Hicksian Marshallian
Year 2000 2005 2010 2000 2005 2010
Rice -0.10 -0.11 -0.09 -0.41 -0.43 -0.30
Rice and wheat products
-0.11 -0.34 -0.45 -0.23 -0.48 -0.60
Wheat -2.50 -2.88 -2.27 -2.53 -2.91 -2.30
Pulses -0.67 -0.63 -0.68 -0.66 -0.62 -0.68
Fish -0.28 -0.37 -0.30 -0.86 -0.95 -0.98
Vegetables -0.62 -0.62 -0.53 -0.60 -0.57 -0.46
Findings
• Income elasticity is large in absolute size and positive
• Rice is a normal and necessary commodity. STRICTLY NOT an INFERIOR commodity.
• In future, total rice consumption in Bangladesh will increase.
I would like to thank• Rodrick M. Rejesus, NC State• A.K. Mishra, LSU• V. Pede• Andy Nelson• MVR Murty• Tao Li• Imelda Molina• Harold. G. Valera• Murali K. Gumma• H. Bhandari, D. Matty • Prof. Y. Chito and Tin Tin• Malu and Rio
Thanks for your support to me always
Tita Mirla and Friend Dehner
Thanks to Dr. S. Mohanty
Please don’t say “good bye” but
please say “see you again”
Recommended