An econometric approach to ascertain sorghum supply response in Zimbabwe

Abstract

Despite failures of government policy to stimulate sustained growth in sorghum production in the face of increased climatic shocks on maize, there have been very little efforts to understand sorghum response to policy incentives. The main purpose of the paper was to determine how sorghum farmers responded to changes in price and non-pricing policies. The major sources of the data were the ZIMSTAT, FAOSTAT, Meteorological department and the Ministry of Agriculture. The data on the area planted sorghum, capital expenditure and that of area of maize which was used as a substitute crop were obtained from Ministry of Agriculture. The data on price of sorghum, price of maize, exchange rate and inflation was obtained from ZIMSTAT. The data on the weather variable was obtained from the Meteorological Department. The international price of sorghum and maize were obtained from the FAOSTAT. The Consumer Price Index and inflation figures were obtained from the Reserve Bank of Zimbabwe (R.B.Z). The Nerlovian partial adjustment model was used to determine the responsiveness of sorghum farmers to price and non-price. It was found that sorghum supply is inelastic to own price both in the long run and short run. In the long run the own price elasticity was found to be 0.51 whilst in the short run was 0.24. This result means that agricultural price policy alone cannot guarantee sorghum production growth targets, but a policy mix that goes beyond factor and product markets and acknowledges the structural and institutional constraints faced by sorghum farmers is likely to achieve a substantial growth in sorghum output in both the short run and long run.