Abstract
Barley is traditionally consumed by the Libyan people on a regular basis. It is most commonly found in the rural areas, where wheat is less readily available for bread making but it is also used, less regularly, by the urban population and is always a feature of meals on special occasions. In this paper, the behavior of Libyan barley market during the period 1980-2005 is studied and important factors that determine its supply are identified. In addition, the paper has considered the main aspects of current situation of barley plantation by studying the most crucial economical factors that influence the production of barley in Libya. Therefore, the study employs an auto-regressive distributed lag model (ARDL) Bounds testing approach to co integration and error correction methodology. The results of the study indicate that barley area and its determinants; relative price, wheat price are cointegrated. The results also indicate that barley acreage in Libya is responsive to domestic price. This implies that price can be used as instruments to maintain favorable acreage planted. Key words: Barley cointegration, Libya, supply response Introduction Climatic factors and agricultural land constraints have limited production of grains in Libya to only wheat and barley. These crops are restricted to just a narrow, rainbrushed ribbon of land along the coast, and a few irrigated areas on isolated oases. Cultivation of autumn-sown wheat and barley is made possible because there are two main water sources. First, there are large reserves of shallow groundwater in Tripolitania, along Libya's northwest coast. This source permits significant irrigation. Second, the scant coastal precipitation that does occur fortuitously falls during the winter grain growing season (November through April). While wheat is considered the preferred food grain, however, barley is more adaptable in the marginal climate and soil. Therefore, this crop is the suitable for farmers located in the drier hinterland. Fall planting typically begins in October, after the first fall rains arrive, and can last into December. Harvest season begins in April for barley and May for wheat, wrapping up in May and June, respectively. The critical flowering period for wheat occurs in late March and early April.