Supply Response Analysis of Gram in the Context of Prices and Non-Prices Factors in Punjab, Pakistan
Supply Response Analysis of Gram in the Context of Prices and Non-Prices Factors in Punjab, Pakistan
Naheed Zahra*, Muhammad Qasim, Muhammad Azam Niazi, Muhammad Ishaq and Mubbashira Nazir
ABSTRACT
Pluses play a very vital role in nutritional food security however in Pakistan this sector was neglected in the past. This study aims to examine the supply response of major pulse gram in the context of price and non-price factors and to analyze gram production scenario at Punjab, Pakistan by applying ARDL approach. In this study secondary data was used from 1980 to 2018. The estimated results of the study revealed that own prices of gram pulse have positive but statistically insignificant impact on pulses’ production. This can possibly be explained by the fact that pulses are considered a risky crop due to yield fluctuations when compared to the competing cereal and other cash crops. Gram production in the Punjab is negatively affected by frequent unfavorable weather and disease incidences. Its production was found to be inversely related to the prices of wheat the major competing crop. This shows that as prices of competing crops increase the comparative profitability of gram decreases and hence its production decreases compared to competing crops. It is recommended that as gram producers are risk averse and prefer crops with sustained profitability so there is a need for policy package for improving gram production in gram area. The package may include gram crop insurance packages to farmers that motivate them to enhance the area under gram. To make gram competitive there is need to provide level playing field i.e., support price policy, for gram as is provided to wheat the major competing crop in the pulses area.
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