Abstract
The study of agriculture supply response to prices has received immense prominence
in recent years and is an important agenda for future research. The objective of the
research is to understand the factors affecting the acreage basmati rice supply
response in Pakistan covering the period from 1975-76 to 2012-13. The study
empirically examines the own and cross price elasticity demand of basmati rice. The
analysis of the own price and cross price elasticity indicates that a change in price of
a single crop not only affects the land allocation and other resources for that
particular crop but also changes the allocation of land to other crops depending upon
their competitive relationship. The study concludes that own price and the price of
irri rice significantly affect acreage under basmati rice. Regarding cotton the study
found that the farm gate price of cotton is insignificant determinant of the basmati
rice area while high price of fertilizer have negative impact on basmati rice acreage.
Policy makers should formulate such a comprehensive agricultural policy that should
treat all the determinants of basmati rice acreage as a group because prices of other
crops like irri rice also have significant impact on acreage supply response of basmati
rice. Fertilizer price has negative relation with the rice production in this regard to
sustain higher rice production government should provide subsidized fertilizers to
rice farmers. Technological change is at the heart of high growth strategies so there is
need to evolve new high yielding varieties of basmati rice.
Abida Yousaf, Himayatullah Khan, Naila Erum. (2016) Supply Response of Basmati Rice: Evidence from Pakistan, The Journal of Humanities & Social Sciences, Volume-24, Issue-1.
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