Supply Response Analysis of Sweet Potato in Bicol, 2009-2019

Date

7-2022

Degree

Bachelor of Science in Agricultural Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jaymee A. Cabangbang

Committee Member

Julieta A. Delos Reyes, Agham C. Cuevas

Abstract

The study assessed how the production of sweet potato in Bicol responds to changes in its own price and other explanatory variables.

In order to analyze the trends of sweet potato production, area planted, and yield, time-series data from the period 2000-2019 was gathered from the PSA and PSA Openstat. To determine the trends, graphical analysis was utilized while descriptive analysis was further refined with the use of tables and figures. The geometric mean method was employed to calculate the growth rates of area harvested and production. The estimation of both linear and double-log models was done to determine the supply response of sweet potato to the independent variables. The criteria to find the most appropriate model included the value of the coefficient of determination (R2), the F-Ratio, the T-test of significance, and whether the relationships between the variables conformed to economic theory. The direct and indirect method of supply estimation was used as well.

Trend analysis shows that both production and area harvested of sweet potato followed a declining trend at an annual rate of 1.45% and 1.56% respectively. Production was seen to have steep declines in the years where extreme weather events occurred while area harvested has been declining ever since its record high in 2004 with the reason being the farmers’ decision to shift production from sweet potato to other high value crops.

The direct and indirect methods of supply estimation were used to analyze the supply response of sweet potato to changes in the values of independent variables. The findings in the direct method showed that an increase in the lagged price of sweet potato would cause a decrease in quantity supplied meaning that farmers are discouraged from increasing the quantity supplied when the price of sweet potato increases. The findings in the area response show that area planted of sweet potato has a positive relationship with the price of fertilizer, the price of sweet potato, lagged wage rate, and the price of rice while having a negative relationship with wage rate and the lagged price of sweet potato. The findings in yield response show that yield has a positive relationship with the price of fertilizer, its lagged price, and technology.

The production-related problems in sweet potato production included: 1) a lack of technical knowledge on management practices; 2) lack of technology adoption; 3) high production costs; and 4) limited access to credit.

Based on the results of the study and the production-related problems in sweet potato production, the following recommendations were formulated: 1) Further research and development of cheap fertilizer and planting techniques; 2) Studying the adoption of technologies for farmers and increasing technology adoption; and 3) Increasing investment in storage infrastructures.

Language

English

LC Subject

Sweet potato industry, Supply and demand

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2022 A14 A74

Notes

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Document Type

Thesis

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