Abstract:
Despite having diversified food consumption patterns, agriculture sector is not flourishing at a pace with other sectors of Pakistan due to limited investment in agriculture sector and degradation of natural resources. Thus, situation demands deeper analysis of relationship between input and output in agriculture sector to guide for eficient use of natural resources. Present research uses time series data on available inputs and monetary value of agricultural output from 1991 to 2021. Main purpose of the study is to determine the association between agricultural inputs and output by applying Cobb-Douglas production function. The input variables like irrigation water, improved seed distribution, fertilizer of-take, use of diesel for operating agricultural machinery, human labor force engaged in agriculture sector, and consumption of rural electricity representing a proxy for use in agriculture sector are used as explanatory variables to study their influence on agricultural output. The novelty of this research is that the impact of seed and fertilizer with respect to changing time is also included in the model keeping in view the ever burning issues of quality seed and fertilizers availability in Pakistan. Trend analysis of selected time series reveals that agriculture output, electricity consumption, fertilizer of-take, seed distribution, labor force and water availability depict a rising trend over the last three decades. On the other hand, only diesel utilization exhibits downward trend over the study period. Least percent increase is measured in case of farm gate water availability, witnessing an increase of only 15% from 1991 to 2021. According to unit root analysis, time series are non-stationary at level which became stationary upon their first diference. Results of Cobb Douglas Production Function show that seed over the time and fertilizer consumption has highly significant but negative impact on agricultural output. Fertilizer over the time and improved seed distribution has significant and positive influence on agricultural output. On one hand, government of Pakistan should pay serious attention to the agriculture sector by providing quality inputs such as seed and fertilizer. On the other hand, agriculture extension department should guide the farmers on war footings regarding judicious use of fertilizers in order to diminish negative efects of over-dosing of fertilizers on crops.
Keywords:
Pakistan
,
ADF
,
Time Series
,
Agriculture
,
inputoutput
,
CobbDouglas approach