I I - part - usaid

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Glutinous r.ce is typically prcduced for home consumption;
rtat ptoduced for the market is ordinarily nonglutinous
since the market price of the latter is generally
higher than the former and yields and production cost of
local varieties aie roughly the same. There is a very
limited exp..rt market for glutinous rice; very little is
exported and none imported, Furthermore, the domestic
elasti~cty :fi scLbstftution between glutinous and non-glutinous
is repoited to be very lcw. Consequently glutinous rice is
praced at its dcmes-ic farmgate pr..ce° Also, since the
prcductn growth trend is zero for glutinous rice and all
growth :.n -.utput has been due tc growth in output of nonglutinous,
-t is assumed that all the increase in paddy
production due to the Project is non-glutinous.
The econcmic price for paddy was derived by taking
the average fc., export price $355 or 07,280/MT) and
working bac< to the rarmgate, (excluding all taxes) to
obtain the value added between farmgate and port. Based on
prices that farmers were actually receiving in February
1981, the paddy prices used (see annex for prices used),
both eccnomic and financial, are very conservative. The
remaining prices are estimates of farmgate prices and are
realistic- The net return to househcld labor and land for
vegetable production could be substantially higher than the
approximately P900/ra: used. It could also be substantially
lower, We believe the net returns used for vegetab.e/truck
crops .;s as realistic an estimate as is possible.
It was assumed that per xa: crop yields would be
constant without the Project, HistorAcal data show yields
generally being flat or drifting downward.
3. Farm Budget
Farm budgets without and with the Project are
shown in the Annex Over 85% of the cropped area was in
rice in 1979,80- With the Project, th..s will be reduced
some bu. rice uiil ccnt..nue to be by fax the dominant crop.
The area planted to mung beans and other similar short.
duration crops ,. pro-ected to increase substantally in
both absolute and relative terms and over the longer run.
The cropped area in mung beans 7s pro-ected to bc about
equal to cassava. This would reflect a conrlnuat, mn of a
national trend., -,.e the area in mung becns has been consistentiy
gzowing a- a relativeLy rapid pace over the past
decade or so. The projected a:"ea unde: vegetables/truck