ESTIMATING GROWTH RATES AND DECOMPOSITION ANALYSIS OF AGRICULTURE PRODUCTION IN PAKISTAN: PRE AND POST SAP ANALYSIS

This paper investigates the trends in area, production and yield of major crops (wheat, rice, sugarcane and cotton) of Pakistani agriculture by using component analysis model. The study data period has been divided into two periods: period one, 1972 to 1988, represents the pre structural adjustment period, and period two, 1989 to 2009, is the post structural adjustment period. The comparison of production and acreage growth rates in both periods revealed that wheat, sugarcane and cotton, but not rice, show better performance in period one. Yield growth rate comparison shows that wheat and cotton have better growth rates in period one while rice and sugarcane performed better in period two. The decomposition analysis of growth suggests that for wheat, rice and cotton, yield effect is the major source of growth in period one except for sugarcane for which area effect was the major source. In period two, source of output growth for wheat and cotton was the yield effect; for sugarcane and rice, the growth source was the area effect. The sources of output for the overall study period revealed that in case of individual crops, the main output source was the yield effect for wheat and cotton and the area effect for sugarcane and rice. The aggregate results for major crops show that in period one, the source of output growth is due to the yield effect; in period two, the output growth is due to the area effect. However, the analysis for the overall study period for aggregate crops revealed that the area and yield effects had almost equal contribution to total change in output growth.