Acreage response of pulses to prices under agricultural market reform in Myanmar

Estimation of agricultural supply response is essential to investigate the impact of changes of agricultural marketing and pricing policies. Before market reform in Myanmar, domestic and export markets were monopolized by government and farmers had to sell quota of their marketable surplus at fixed prices. After market reform, compulsory delivery system of agriculture produce was discontinued and private marketing was well-developed in domestic markets as well as in export of crops such as pulses. This article assesses the impact of market reform by examining acreage response to price with Nerlove partial-adjustment model covering yearly data from 1988-2004. Acreage response to liberalization of prices and marketing was statistically significant in export crops, Black gram, Green gram, Pigeon pea and Chickpea except Soybean with lack of export demand. Although the short-run elasticity of acreage was less than unity, the long-run elasticity was quite greater than unity. Agricultural market reform, with price incentive to farmers, can induce the motivation of production. However, complementary interventions for the improvement of infrastructure, marketing, access to inputs and credits, production technology etc are still prerequisite.