I= COMPARATIVE ADVANTAGE AND COMPETITIVENESS OF MAJOR AGRICULTURAL CROPS IN INDUS BASIN: PRICE RISK ANALYSIS
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Title of Thesis
COMPARATIVE ADVANTAGE AND COMPETITIVENESS OF MAJOR AGRICULTURAL CROPS IN INDUS BASIN: PRICE RISK ANALYSIS

Author(s)
Sofia Anwar
Institute/University/Department Details
University of Agriculture Faisalabad, Pakistan / Department of Agri Economics
Session
2004
Subject
Agri Economics
Number of Pages
262
Keywords (Extracted from title, table of contents and abstract of thesis)
agricultural crops, indus basin, price risk analysis, agricultural commodities, wheat, rice cotton, sugarcane

Abstract
The world economic scenario is set for change under free trade regime, increasing competition and relative competitiveness of different countries. A significant change in economic policies of Pakistan has profound implications for national economy, the study of comparative advantage is of major importance to know the extent and potential for comparative advantage and competition of agricultural commodities. This is also important to identify the priorities for resource allocation among competing crops.

This study is aimed at analyzing the changing agricultural comparative advantage over time and its implications for trade development. The extent of policy distortion and agricultural protection is also determined by the study. Four major corps i.e wheat, rice cotton and sugarcane are analyzed by taking the data of two main provinces for three harvesting years i.e 2001-01 to 2002-03. The data were analyzed to smooth out variations over time. Initially crop budgets were considered to analyzed the crop performance, in financial terms. Later on the import and export parity estimates were obtained to evaluate comparative advantage, in economic prices. The policy analysis matrix (PAM) was developed for four major crops that nearly consume 90 percent of the domestic resources and have high economic importance. The static analysis showed that Pakistan has comparative advantage at export parity prices for cotton and rice. The wheat and sugarcane have comparative advantage but at import parity prices. They have no comparative advantage at export parity prices. The DRC is fairly high for wheat and sugarcane.

The analysis was further subjected to Risk analysis. The price of commodities and prices of DAP and Potash were taken as risk variables to evaluate comparative advantage and competitiveness of crops in the changing scenario. The risk analysis showed that rice and cotton in Pakistan have comparative advantage at export parity prices. Both maintained comparative edge even under price risk situation in wake of trade liberalization and export trade regimes in the next five years. The wheat and sugarcane showed a significant comparative advantage as import substitution crops but showed marginal competitiveness in the risk situation in the next five years, at national level.

The analysis showed that Pakistan has to maintain competitive edge in rice and cotton through quality produce and value addition. The productivity of wheat and sugarcane should be enhanced along with reduction in cost of production. The subsidy on urea (given on gas) and irrigation water should be reviewed. Sugarcane is highly water consumptives crop. Its area may be reduced and the production loss thus created can be covered through manifold increase in yield.

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3360.68 KB
S. No. Chapter Title of the Chapters Page Size (KB)
1 0 Contents
153.73 KB
2 1 Introduction 1
33.12 KB
3 2 Review of Literature 4
303.64 KB
4 3 Methodology 32
191.66 KB
  3.1 Data Sample 32
  3.2 Crops 33
  3.3 Analytical Frame Work 34
  3.4 Static Analysis 34
  3.5 Policy Analysis Matrix 35
  3.6 Components of PAM and Data Requirement 40
  3.7 Dynamic Analysis 47
5 4 Results and Discussion 51
502.83 KB
  4.1 Rice 52
  4.2 Cotton 64
  4.3 Sugarcane 72
  4.4 Wheat 84
6 5 Price Risk Analysis 95
537.53 KB
  5.1 Rice 96
  5.2 Cotton 110
  5.3 Sugarcane 116
  5.4 Wheat 128
7 6 Summary Conclusions and Recommendations 139
200.6 KB
  6.1 Summary 139
  6.2 Conclusion 153
  6.3 Recommendation 154
  6.4 Limitations 155
  6.5 Areas for Future Research 156
8 7 Literature Cited 157
99.24 KB
9 8 Appendix 167
1659.04 KB