Humboldt-Universität zu Berlin - Quarterly Journal of International Agriculture

Quarterly Journal of International Agriculture No. 3/10

Effects of technological progress on consumers’ and producers’ welfare:
a case study for Pakistan Punjab

Shahnaz A. Arifullah
NWFP Agricultural University, Peshawar, Pakistan

Hayri Önal
University of Illinois at Urbana Champaign, Urbana, USA

Anwar F. Chishti
Mohammad Ali Jinnah University, Islamabad, Pakistan


While there is no dearth of regression analyses or linear programming models reviewing the agricultural performance of Pakistan, hardly any study has used a price endogenous mathematical programming model to simulate the ex ante effects of new policies on consumers and producers simultaneously. Responding to this need this paper simulates the crop sector of Pakistan considering price-quantity interrelation-ships. In its present form, the model is restricted to the Pakistan Punjab which successfully replicates the observed cropping pattern in the base year (2006). The model assumes an aggregate representative farmer who allocates the resources in such a way that the optimal quantities supplied at market prices are consistent with the farm-gate demands at those prices. The model is then solved by altering the yield and cost parameters from India’s Punjab, to analyze the new market equilibrium that would occur in the crops sector of Pakistan Punjab under a technologically enhanced agricultural system.

Keywords: price endogenous, sector model, historical mixes, Pakistan

JEL: C61, Q11, Q18

Vol. 49 (2010), No. 3: 243-255