Price of maize (lnMP
t-1
) The price of maize is the nominal producer price of maize per each tonne sold. According to the theory of supply, quantity supplied fora product is inversely related to the relative price or expected price of its substitutes on the market. Maize and tobacco are the most competing cash crops since they compete for the same resources such as land, farm equipment and labour (ZTA,
2001). If farmers expect price of maize to be relatively higher than that of tobacco, they are likely to substitute tobacco in favour of maize production. The producer price of maize, lagged by one period has also been used as a proxy for expected market price of maize by Townsend and Thirtle (1997) and found a negative relationship. Hence, it is also expected to be negatively related to quantity supplied of tobacco output.
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