Supply response of maize in Tanzania

Abstract

Maize production, in Tanzania, has not been in line with maize requirements for decades. The objective of this study was to analyze supply response of maize in Tanzania. Many studies have reported inelastic short run elasticities and elastic long run elasticities of supply. The study used Error Correction Mechanism (ECM) approach due to its ability to calculate both short run and long run elasticities of agricultural supply. Rainfall was found to be integrated of the order different from other variables and it was excluded in the ECM. The findings show that short run elasticities are small in magnitude with unexpected signs and insignificant, while long run elasticities, except for sorghum price, are large in magnitude with expected signs and significant. It was concluded, from the long run results, that maize supply is positively affected by maize prices and negatively affected by fertilizer prices and sorghum prices. And it was recommended that, the government should; indirectly intervene in the market to promote efficiency in price mechanism, make effective use of grain reserve to ensure market for maize output even in periods of bumper harvest so that farmers can be able to buy fertilizers and other farm inputs to improve food crop production.