preview

Determinant Factors of Demand in Dairy Food Market - Implications for Milk Production in Bangladesh

Good Essays
Open Document

Determinant factors of demand in dairy food market - Implications for milk production in Bangladesh ARIK ROY Dairy has emerged recently as an important sub-sector in agriculture with profound implications for human health, livelihoods and the environment. Milk production in Bangladesh has increased during the past two decades. Improvement of high yielding crossbreed dairy and veterinary facility are the cogent factors for this partial success. But it is still far to achieve self-sufficiency in milk production. In order to head for self-sufficiency, issues on demand for milk are also becoming important. Although the declining rate of population growth has contributed partially towards self-sufficiency but the factors like …show more content…

If the shift of D2 were to the extent whereby it coincides with D1 (implying no actual net shift), the actual consumption in that event would have been Q3 at P2 price level. This would imply a higher level of consumption and a larger shift in the supply curve towards the right passing through the point (P2, Q3) rather than the point (P2, Q2). It should be noted that the framework provides an indirect way of measuring the extent of supply shift caused by technological progress in milk production. The extent of horizontal shift in the demand curve due to increase in income can be measured by the difference of OQ4 and OQ1 i.e. (OQ4 - OQ1). The extent of leftward shift in demand due to the combined effect of Z and Pj variables and income distribution is measured by (OQ4 - OQ6). The extent of supply shift can be measured by (OQ5 - OQ1). The level of supply would have been OQ5, if the economy were open and P1 were equal to world price. At that situation, consumption at the final period would have been much smaller, i.e., only OQ6 and (OQ5 - OQ6) would have been the quantity exported. The final year consumption is observed at Q2 and price at P2. But given the income growth as implied in the shift of demand curve to Dy, the price should have been at Pe instead of P2. Therefore, it has been inferred that the income distribution must have worsened to cause the actual demand curve to shift to the position of

Get Access
Related
Get Access