A Comprehensive Analysis of Wheat Production and Balances Its Demand and Supply Problems and Remedial Measures (A Case Study of Pakistan)
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Date
1999
Journal Title
Journal ISSN
Volume Title
Publisher
Department of Economics, University of Peshawar. Khyber Pakhtunkhwa, Pakistan
Abstract
Wheat is a universally cultivated and produced staple food item of commonuse. In Pakistan, it is being used regularly. Its extensive and constant use has made people habitual ofit and they cannot evenbearits partial shortage or scarcity.
The purpose of the present study is to remove suchtransitory shortages between consumption (demand) and production (supply) to bridge the gap between them throughefficient wheat policy. Consumption (demand) of wheat depends highly on population growth and changes in per capita income of the country. Population of Pakistan is increasing at a higher rate (2.7 percent), which is creating pressure on the cultivated land and thus adversely affecting production
of wheat. Moreover, the per capita incomeis increasing at a rate of 11.9 percent which is raising the aggregate demand for better quality of wheat. Thus, a gap is created between demand and supply of wheat whichis further widening with
the passage of time. This problem can be solved throughefficient government policies, which will bring self-sufficiency of wheat to the economy and may even lead towards exportation of wheat and earn foreign exchange in import
substitution.
Self-sufficiency in food grain productionis the national goal. Pakistan enjoys a comparative advantage in wheat production, therefore, the self-sufficiency goal is theoretically valid. The essence of the findings of the present studyis that the
irrigation induced technological changes would accelerate the growth of wheat production, resulting in a gain of economic efficiency and achieving self sufficiency.
The key success to increase wheat production lies in rapid adoption of technology. The diffusion of biochemical technology (HYV, fertilisers pesticides, etc) is a more appropriate path towards technological progress than alternative labour saving mechanisation (labour — intensive and capital intensive techniques).
Production (supply) of wheat depends onthe total land availability for the crop, irrigation facilities, climatic conditions and market price of wheat. Wheat is sown in the month of November-December, where in rain fed areas, we receive
verylittle rain and which alwaysbrings a bad harvest. It is an exceptional case in Baluchistan and N.W.F.P. but bumper cropping in Punjab and Sindh have irrigation facilities.
Effort has been madeinthis study to achieve an equilibrium between demand and supply of wheat. For this, data has mainly been obtained and used from government published agricultural bulletins, economic surveys, etc. Moreover a
little primary data has also been used for the derivation of Cobb-Douglas production function and Marginal Physical Product of labour.
A very useful Auto Regressive Integrated Moving Average (ARIMA) model has been used in this study which has forecasted wheat production upto 2010 (13 years ahead). This will help the planners and concerned agencies in time importation of wheat.
The findings of the study are that both irrigation and technology would play the leading role in the growthof future wheat production. The government will also have to change its wheat policies in light of the new development. Specially it has to eliminate subsidies and checkits role in the price formation. Finally if the recommendations ofthe study are adopted, Pakistan will not only become self-sufficient in wheat production but may emerge as wheat exporting country also.