Trade, exchange rate, and agricultural pricing policies in Pakistan

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Trade, exchange rate, and agricultural pricing policies in Pakistan, Volume 1

Author:	Hamid, Naved; Nabi, Ijaz; Nasim, Anjum;	Collection Title:	World Bank comparative studies -- the political economy of agricultural pricing policy
Country:	Pakistan;	Date Stored:	2002/09/12
Document Date:	1990/12/31	Document Type:	Publication
ISBN:	ISBN 0-8213-1715-6	Language:	English
Major Sector:	Agriculture, fishing, and forestry	Region:	South Asia
Report Number:	9789	Sub Sectors:	(Historic)Other agriculture
SubTopics:	Environmental Economics & Policies; Agricultural Research; Crops and Crop Management Systems; Economic Theory & Research; Access to Markets	Volume No:	1

Summary: Agriculture is the mainstay of Pakistan's economy. Nearly 24% of total output and 50% of total employment is generated in agriculture and it accounts for 30% of Pakistan's exports. Agriculture also provides surplus for investment in the manufacturing sector and to meet other expenditures of the government. This surplus is extracted indirectly through government control over the prices received by farmers for crop output. Typically, what this means is that farmers receive lower prices than what they could get without government intervention in price determination. This study attempts to explain the nature and consequences of such interventions by presenting a political economy analysis of agricultural pricing policies in Pakistan. The advantage of this approach is that agriculture is placed in a macro-economic framework and the policy analysis takes into account group interests that often conflict. The analysis focusses on four main crops of Pakistan, i.e., wheat, cotton, rice and sugarcane. Together, these crops represent 74% of the gross value added of crop output and 63% of cropped area. The different phases and changing priorities in intervention are outlined and a detailed discussion of the decision making process in formulating pricing policies is provided. The accommodation of conflicting interests and the prevailing and changing ideological positions are discussed. Finally, the administrative limitations of pricing policies are discussed.


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