Using the partial equilibrium model of the adaptation policy, this study was meant to analyse the welfare effect of the climate adaptation policy for rice price volatility in terms of producer surplus, consumer surplus, and net change in social welfare in Bangladesh. The long-term climatic trend and policy adaptation for climate impact on rice price variation in Bangladesh are incorporated into the economic model method. The study’s base period is 1977-2009, with an extrapolation period of 2010-2030. Time series data from national and international organisations are used to carry out the planned analysis. The total surplus received by producers under the support price programme is USD 1,164 million, which is significantly more than the consumer surplus (USD 763 million) throughout the years 2010–2030. During the years 2010–2030, the net change in social welfare due to the support price policy is equal to –1483 million (USD). Furthermore, an examination of the subsidised price strategy reveals that the total surplus received by consumers (USD 1,958 million) is higher than the surplus received by producers (USD 1,738 million) during the same time period. The net change in social welfare as a result of the subsidised pricing policy (–197 million USD) is significantly higher than the net change in social welfare as a result of price support (–1483 million USD) (USD). When compared to each policy independently, implementing the dual price policy would result in a substantially bigger net change in society’s welfare (–1185 million USD). Finally, these price stabilisation and adaptation strategies are regarded as being more effective in moderating the harsh price rises and falls in the future food market, which will benefit both producers and consumers. Despite the fact that the change in net social welfare is higher, the higher policy budget expenditure is necessary to ensure food availability and security.

Author(S) Details

M. A. Salam
Agricultural Economics Division, Bangladesh Rice Research Institute, Bangladesh.

Jun Furuya
Japan International Research Center for Agricultural Sciences, Bangladesh.

Shintaro Kobayashi
Japan International Research Center for Agricultural Sciences, Bangladesh.

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