Democratic Republic of Congo is a developing country located in Central Africa with a population of over 75 million. Generally, it relies on import in international market for food as it has constantly been experiencing domestic crisis which hinders production. Given the importance of shores price policy and income policy, the government pays meticulous attention to these factors to meet the present and future food security. In order to understand the import behavior related to GDP and international trade prices, the study employs Almost Idea Demand System (AIDS) model using FAO data. The result explains that price effect is more useful to the food security of the country than the income effect, thus this study suggest the government should give priority to policy on price.
More of the poor population lives in the rural regions and are highly dependent on agriculture for their livelihood in D. R. Congo and in other developing country in the world [
In this study, we focus on the food issue in The Democratic Republic of Congo, including agricultural production, trade and the relation to its prices. Using the Almost Ideal Demand Model (AIDS), the study analyzes how the price and GDP influence the food import in D. R. Congo. The study provides and updates food security situation of D. R. Congo relative to its importation prices.
The Democratic Republic of Congo is very rich country with natural resources; the political instability makes the country experience slow development and the difficult infrastructure, the world of commercial product exploitation is from colonial extraction with a little development. Prior to 1997, D.R. Congo was called Zaire (see
All data in this study originates from United Nation Food and Agricultural Organization (FAO). Categorically the data concentrates on 5 groups of common food in the country including staple food (cassava, maize, rice, millet, beans), livestock, oil-fat, milk and sugar. Their cultivated area, the total output and yield were also collected.
At first, the crop structure and their production are introduced beginning with cassava, maize, rice, millet, beans, cowpeas, pulsesnes, banana, peanut, oil palm, sesame, soybeans, bananas, root tuber, vegetable, sweet potatoes, coffee, tea, cotton, sugarcane. Secondly, the trade of the above mentioned is presented.
1) Staple food (first row in
2) Beans (second row of
from 2002-2014 increased further to 45.7 kg/ha. Cowpeas, from 1985-2000 had an increase of about 95 kg/ha and from 2010-2014 further increased with about 15.5 kg/ha. Pulses, from 1980-2005, yield was stable and then experienced an sharp increase in 2010 and then dropped with about 20 kg/ha and from 2010-2012. Bambara from 1996-1997 decrease with about 13.9 kg/ha and then from 2010-2014 sky-rocketed to about 25.2 kg/ha.
3) Oil crops (third row of
4) Roots & tubers, vegetables and fruits (forth row of
5) Economics crops (fifth row of
Cassava (
countries.
This section showed how to fit a quadratic almost ideal demand system (AIDS). Here we show how to fit the basic AIDS model by using nlsur. shows how to fit the quadratic AIDS model using the dataset food. dta contains import expenditures, expenditure share, and log prices for four broad food groups. For a four-good demand system, we need to fit the following system of five equations:
where wk denotes a fraction of expenditures share on good
Our model has a total of 12 unrestricted parameters. We will not estimate directly. Instead, we will set it equal to 5 as was done in Poi (2002); see Deaton and Muellbauer (1980) for a discussion of why treating as fixed is acceptable.
Price Elasticity and Import Expenditure ElasticityImport expenditure elasticity: The expenditure elasticity of demand in certain period, The expenditure elasticity of demand in consumption expenditure changes in demand for certain degree of change caused by the extent of the value if positive, that consumption and consumption expenditure changes in the same direction, number represents the degree of influence on it, the larger the value, when the total expenditure of living consumption after the increase, the consumption of good larger. The expenditure elasticity is in the following:
The price elasticity of demand can be calculated by using the AIDS model, which can be used to calculate this self-price elasticity and cross price elasticity of production. Own-price and cross-price elasticity: when i = j, since the price elasticity, this time δij = 1. Since the price elasticity is negative, that consumption and prices reverse, with rising commodity prices, the number of rural resident consumption of the goods decreased value represents the size of the impact of price change son consumption. When i ≠ j, δij = o. The price elasticity is in the following:
The R square (R2) explains how well the function (W) supports the coefficients of the variables. All the functions had more than 90% acceptance. The import share is decided mainly by the logarithm of Own price excluding milks and sugar. The price and expenditure elasticity of staple food is presented in
From Table, according to the function of expenditure elasticity and price elasticity, the needed elasticities are listed in
Import expenditure elasticity is less than price elasticity for two of staple food
Coef. Of determ. | Price elasticity Coef. (gij) | Expenditure elasticity. | ||||||
---|---|---|---|---|---|---|---|---|
function | denotion | (R2) | Staple food | Livestock | Oil-fat | milks | sugar | bi |
W1 | Staplefood | 0.9932 | −0.1130 | −0.0044 | 0.0451 | −0.0054 | −0.0101 | −0.0383 |
(−1.41) | (−0.12) | (1.29) | (−0.17) | (−0.57) | (−3.22) | |||
W2 | Livestock | 0.9793 | −0.1782 | 0.0504 | 0.0572 | 0.0138 | −0.0162 | |
(−4.45) | (1.81) | (2.35) | (1.05) | (−1.82) | ||||
W3 | Oil-fat | 0.9293 | −0.0531 | −0.0033 | 0.0109 | 0.0148 | ||
(−1.93) | (−0.19) | (1.12) | (2.01) | |||||
W4 | Milks | 0.9493 | 0.0206 | 0.0012 | 0.0179 | |||
(0.89) | (0.11) | (2.58) | ||||||
W5 | Sugar | 0.9101 | −0.0108 | 0.0021 | ||||
(−1.41) | (0.53) |
n_ij | Price elasticity | Import Expenditure Elasticity | ||||
---|---|---|---|---|---|---|
grains | meat | oil fat | milk | sugar | ||
grains | −0.9957 | 0.0001 | −0.0002 | 0.0000 | 0.0000 | 0.9202 |
meat | 0.0002 | −0.9971 | −0.0002 | −0.0005 | −0.0001 | 0.9165 |
oilfat | 0.0067 | 0.0030 | −1.0008 | −0.0001 | 0.0002 | 1.3083 |
milk | −0.0005 | 0.0020 | 0.0000 | −0.9996 | 0.0000 | 1.1808 |
sugar | −0.0002 | 0.0001 | 0.0000 | 0.0000 | −1.0000 | 1.0382 |
groups including grains and meat, which means that price effect is much more useful than income effect for important staple food. So the government should give priority to price policy. For oil fat, milk, and sugar, expenditure elasticity is greater than price elasticity, which means income policy has more affect their price policies (see
This paper was supported by the CAAS Science and Technology Innovation Project (number: CAAS-ASTIP-2017-AII), founded by Chinese Academy of Agricultural Sciences.
Eric, M.M., Xu, S.W., Yu, W., Wang, S.W., Ahmed, A.-G., Darith, S. and Eliane, M.B. (2017) Study on Food Import in D. R. Congo. World Journal of Engineering and Technology, 5, 23- 30. https://doi.org/10.4236/wjet.2017.52B003