ECONMIC ANALYSIS OF MUNG BEAN SUPPLY RESPONSE IN IRAQ DURING THE PERIOD 1970 - 2010

Abstract

Mung bean is considered as one of the most important crops in Iraq, because it contains relatively high percent of lysine-rich protein, as well as carbohydrate, aside from gram's importance in maintaining soil fertility. The average planted acreage with gram in Iraq was 13.84 thousands ha, while average total production was 11.49 thousand tons, whereas average yield was 799.6 kg/ha for the period 1970-2010. This study aimed to estimate planted acreage supply response of gram during the period 1970-2010, and use of estimated coefficient in calculation of short and long-term price elasticities using dynamic nerlove model. The results of the study have important applications in adaptation of price policies required for increasing gram production in Iraq. The results indicated that the main variables were lagged planted acreage, the relative amended price of gram and lagged sesame price, and production risks. These variables represented about 70% of the total changes in planted acreage with gram. Estimated elasticities indicated that price-elasticity of gram in relative to its price was 0.2452, and it was significant. This means a 10% increase in gram price causes 2.4% and 6.3% increase in planted acreage in short and long-term respectively. The cross elasticities of gram were -0.3211 and-0.3022. That means an increase in the price of sesame by 10% will result in a decrease in planted acreage with gram by 3% in the short-term and 7.8% in the long-term.