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Analysis of Major crops in Pakistan
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This study using the Nerlovian model has estimated the responses of cotton, wheat, sugarcane and rice crops' area to changes in their prices and other relevant factors in Pakistan. Time period covered in the analysis relates from 1970-71 to 2004-05 for cotton, wheat and sugarcane and from 1975-76 to 2004- 05 for rice crops. The coefficients of the area response models for respective crops were estimated through the Ordinary Least Squares method. The responses of these crops to changes in their own prices, as reflected in their short and long run price elasticities, along with the adjustment coefficients are estimated.The conclusion of all this discussion is that there are powerful monopolies or oligopolistic structures in cotton, wheat, rice and sugarcane markets which distort the incentives for the producers resulting in wasteful and inefficient use of national resources. There is need to remove these distortions and correct market imperfections so as to make best use of the available resources and increase farm production and improve our competitiveness in world markets.
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