Abstract:
Historically, the agriculture sector served as the fundamental engine of growth. In Pakistan, the agricultural sector contributes about 19% of the gross domestic product (GDP). There are nine agro-climatic zones in Pakistan. The cotton-wheat zone is the poorest among them. Cotton is an important cash crop, yet the largest producing zone ranks amongst the poorest zones of the country. This study aimed to calculate the economics of cotton production. The specific objectives were to a) estimate the cost of production of the cotton crop in the study area, b) measure the profitability of farmers, c) estimate domestic terms of trade and d) suggest policy implications. Primary data from 200 cotton farmers of district Vehari of province Punjab, Pakistan were collected. Profitability was calculated using the most common economic analytical techniques i.e., profit, benefit-cost ratio (BCR), and input-output ratios. Results showed that there was a slight difference in cost of production and profit margins and benefit-cost ratios of the small, medium and large farmers that were not statistically significant. Overall, the BCR remained 1.136 which showed a decline over the time when compared to the previous studies. The results of domestic terms of trade analyses confirmed these results and explained that the domestic terms of trade have deteriorated over time. This underlines the importance of correcting imbalances in the prices (received and paid). Hence, there is a dire need to correct the imperfections in both input and output markets.
Page(s):
51-57
DOI:
DOI not available
Published:
Journal: Pakistan Journal of Life and Social Sciences, Volume: 18, Issue: 1, Year: 2020