Abstract
The present study is an attempt to analyse the demand, supply and price behaviour of wheat in
selected areas viz,. Dinajpur, Pabna, Rajshahi, Rangpur and as well as whole of Bangladesh in
terms of annual fluctuation of prices, growth and instability and decomposition of time series
components. Both primary and secondary data were used for the study. Time series and cross
section data were used for estimating demand for wheat in Bangladesh. In time series analysis,
single equation models taking separately price and quantity as dependent variables were used. In
income elasticities, cross section data were used. For area response Nerlovian Partial Adjustment
model was used for selected areas of Bangladesh. The study also projected the demand for and
supply of wheat during the sixth and seventh five-year Plan period of Bangladesh. Six performance
indicators were used for measuring marketing efficiency of wheat. Time series data for the period
1982/83-1998/99 and primary data from March 1999 to February 2000 were employed for this
study. In total 341 farmers' and intermediaries' were interviewed for collecting necessary data from
the study areas. It was observed that annual real prices of wheat in selected areas fluctuated to a
great extent and it was highest in Rajshahi followed by Rangpur, Dinajpur and Pabna. The extent of
fluctuation of area was the highest for Pabna followed by Rajshahi and Rangpur. Growth rates of
real prices of wheat in selected areas of Bangladesh were found to increase over the period due to
increasing population and high demand of food grain (especially wheat, Boro). Production
instability of wheat in Pabna areas was the highest followed by Dinajpur, Rangpur and Rajshahi
areas in terms of instability index. Annual time - series data of prices consisted of three
components viz., trend, cyclical and irregular movements, which were decomposed to see the
annual price movement separately. The upward trend of real price was found for all the selected
areas. The length of cycle in real prices was found 6 years on an average in the selected areas. The
extent of fluctuation in irregular component was the highest for Dinajpur followed by Rangpur,
Pabna and Rajshahi during the study period. It is evident from the seasonal indices that wide
seasonal fluctuation occurred in wheat prices in all the selected markets. In time series analysis, the
price and income elasticity of wheat were calculated to be -0.15 and 0.76 respectively. The price
flexibility was estimated to be -0.03. In cross section analysis, the income elaticities as obtained
from inverse function were 0.36, 0.65 and 0.03 for the nation, urban and rural areas respectively.
Although the R2 value for linear was highest but the elasticity obtained from inverse function was
more consistent to the real world situation because wheat was not consider as a luxury commodity
in Bangladesh. For the country as a whole the last year area and real prices played a dominant role
in determining current year area allocation under wheat. The district result showed that last year
real price was an important for determining variable in area response function, particularly for
Rangpur district. The farmers' did not take into consideration the yield and price risk in the
preceding two years for making a decision about the allocation of area under wheat. The expected
yield of wheat had strong influence on current year's area allocation particularly for Rajshahi and
Rangpur districts. Yield increasing technology would attract more area for wheat cultivation. By
the end of the sixth and seventh five-year plan the country is expected to have a deficit of about
1887 and 2314 thousand tonnes, which was about 110.76 and 121.88 per cent of production of
wheat respectively. This implies that the country will face the problem of deficit production of
wheat in future unless steps are taken to increase supply of wheat from domestic sources. To solve
the situation and to check the drain out of a lot of foreign currency for importing a huge quantity of
wheat grain, more attention should be given for extensive and intensive cultivation of wheat in the
country. Therefore, more budgetary allocation should be made available for varietal improvement
and production management researches. In the case of wheat marketing, channel IV possesses the
highest marketing efficiency followed by channel II. The performance indicators revealed that the
channel I and channel II were not relatively efficient in the agricultural marketing sector in wheat
producing regions. It was due to low prices received by the farmers in the channel I and Il as
compared to other channels. The farmers' response to the marketing channel IV, selling of wheat
directly to the millers should be the most desirable. Their access to the millers be encouraged and
facilitated in terms of policy adoption.