Estimates Supply Response of Major Crops in Bangladesh

The production of crops is an important economic ac tivity for farmers, crop income, nutrition and economic transformation in developing countries. To facilitate better understanding of th e synthetic parameters influencing supply response, this study uses annual data of Bangladesh covering 42 years to estimate a classic translog mo del providing area responses of rice, wheat, cotton, maize, sugarcane and rapeseed to changes in their gross product per hectare. The coefficient s of each crop’s equation in the system are estimated with the Full Informati on Maximum Likelihood method. The own and cross gross product elasticities for each crop are calculated showing important results. The crop area of the major crop (rice) is weakly gross product responsive as c ompared with the minor crops. Appropriate policy reforms could help the pr oducers to respond more to price changes as well as to raise levels of average productivity