Impact of Various Factors on Crop Diversification Towards High Value Crops in Pakistan: An Empirical Analysis by using THI
Asif Ali Abro1* and Iqbal Ahmed Panhwar2
ABSTRACT
This paper is based on empirical evidence from Pakistan for 1981-2018. To analyze the impact of various factors on the diversification of crops towards high value crops, the Herfindahl Index (HI) was used to check the level of concentration or diversification in the structure of crops in Pakistan. The values of the Herfindahl index obtained as a result of the analysis indicate a high level of crop concentration and need to be diversified towards high value crops. The ARIMA time series model (1,1,1) was used to study the impact of various factors on the Transformed Herfindahl Index (THI) of diversity. To check the impact of improved infrastructure; the length of the road was adopted and showed a positive and significant relationship with crop diversification. Per capita income, urbanization, and profitability of minor crops were taken as demand side factors. Per capita income, urbanization and profitability of minor crops regression coefficients showed positive and significant impact on crop diversification. The technology was determined using fertilizers, the number of tubewells, Net Area Sown (NAS) and the production of tractors in quantity. The regression coefficients of fertilizers, number of tubewells and production of tractors showed positive and significant impact on crop diversification except Net Area Sown which showed negative impact but it was insignificant. The resource was identified with water availability (MAF) for irrigation purposes, which demonstrated a positive and significant association with crop diversification. To determine the effects of climate, rainfall was adopted in the model and showed a negative and significant relationship with crop diversification. It was found that development of infrastructure received a low priority in rural areas and it is recommended that cold storage in relevant areas, vibrant roads net work and consistency in power supply for cold storage should be developed on priorities basis that will help to minimize the post harvesting losses. The judicious use of fertilizer, efficient utilization of water and support price for fruits, vegetables, pulses and oilseeds are required for the promotion of high value crops.
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