Supply Response of Wheat to Price and Non-Price Factors in Northern Pakistan

This paper estimates supply response of wheat crop to price and non-price factors in Khyber Pakhtunkhwa Province of Pakistan. The study uses Nerlovian adjustment model for supply response of wheat for the period 1980/81 to 2010/11. The study found that all the explanatory variables were stationary....

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Bibliographic Details
Published in:Journal of humanities and social sciences (Peshawar, Pakistan) Pakistan), 2013-08, Vol.21 (2), p.55
Main Authors: Khan, Himayatullah, Khan, Muhammad Niamatullah
Format: Article
Language:English
Subjects:
Agricultural policy
Agriculture
Crops
Economic models
Equilibrium
Farmers
Hypotheses
Market prices
Wheat
Wheat industry
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Summary:This paper estimates supply response of wheat crop to price and non-price factors in Khyber Pakhtunkhwa Province of Pakistan. The study uses Nerlovian adjustment model for supply response of wheat for the period 1980/81 to 2010/11. The study found that all the explanatory variables were stationary. Wheat price, total cultivated area, total cropped area and cropping intensity were statistically significant factors affecting wheat area positively. Total irrigated area has also positive but insignificant relationship with wheat area. Area cultivated to wheat is also directly but insignificantly related to its lagged value. A minor difference was found between short and long-run elasticities of regressors in case of wheat area. For wheat production response the study concluded that support price of wheat, lagged price of wheat; total irrigated area and wheat production last year have positive but insignificant relationship with wheat production. The support price policy if the government of Pakistan does not seem to be properly designed. The study recommends that proper agricultural policy needs to be prepared so that farmers can make timely decision regarding allocation of land to different crops keeping in view the comparative advantage of crop production. The government should invest further in education.
ISSN:1024-0829