Edible Oil Deficit and Its Impact on Food Expenditure in Pakistan

This study is an attempt to analyze the impact of Edible Oil Deficit on Food Expenditure in Pakistan for the period 1971-2008. Edible oil deficit is one of the major concerns for the policy makers in Pakistan. Despite of having agriculture based economy; Pakistan is unable to fulfil her domestic demand of edible oil by local production. This situation forces the government to import edible oil and oil seeds from other countries. This import not only increases our balance of payment deficit but also it negatively affects the ability to finance the external debt repayments. Autoregressive Distributed Lag model has been used to analyse the long run relationship amongst the variables. Other important determinants of food expenditure along with edible oil deficit were also used to check for their collective long run impact. It was found that long run negative relationship exists between edible oil deficit and food expenditure and hence the result derives the policy implication that there is a need to boost up the efforts in the agriculture sector to steadily increase the local production of oil seeds in the country. The relationship between the per capita GDP and food expenditure is found to be positive and significant with elasticity of 0.261 suggesting that 1 percent increase in per capita GDP will cause food expenditure to increase by 0.26 percent. The relationship between food subsidy and food expenditure is found to be insignificant suggesting that due to improper targeting and consumer’s perception about quality and accessibility of subsidized food, Government’s food support programs are not effective.Edible Oil; Production; Imports; Trade Deficit; Balance of Payments; International Trade; Oilseed Crops; Agriculture; Pakistan; Edible oil deficit; demand function; food; inflation; food inflation; household expenditure.

Causal Relationship Between Exports and Agricultural GDP in Pakistan

This paper is an attempt to investigate the causal relationships among agriculture and exports in Pakistan by using time series data for the period between 1971 and 2007. There are several efforts reflecting greater interest in exploring the possible relation between the international trade and economic growth. Increasing of Gross Domestic Product is the main target of almost every economy. Promoting exports of the country is one of the ways of achieving economic growth. Pakistan is among the developing countries, emphasizing to boost its exports since its inception. The major share of Pakistan’s export has strong backward linkages with the agricultural sector both in terms of primary and value added commodities. The findings have significant implications on Pakistan’s economic policy as both the variables have shown strong long-run relationship. There is also a bi-directional Granger-causality between the total exports and agricultural GDP. However, for short-run, both the variable does not cause each other in either direction.Causality, Growth, Gross Domestic Product, Agriculture, Exports, Pakistan

The Estimation ofAggregate Consumption Function for High Income Countries

Aggregate Real Private Consumption (ARPC) is one of the major components of the Gross Domestic Product (GDP)that contributes to specify any economy’s long term living standards. The contribution of ARPC stands on an average around 55%. It is therefore important to understand the components of the consumption which is almost more than half of the aggregate economic expenditure. The study is an attempt to make a case for developing countries to bring policy level changes in order to determine the consumption pattern of developing countries’ GDP. Using appropriate empirical model the study investigates the validity of Permanent Income Hypothesis (PIH) and Absolute Income Hypothesis (AIH)on ARPC for selected developed economies. The results of the study reveals that the important determinants of ARPC in the long-run are real GDP and wealth, while in the short-run they are real interest rate and unemployment rate

Edible Oil Deficit and Its Impact on Food Expenditure in Pakistan

Pakistan, a developing country, is the sixth most populous in the world [U. S. Census (2008)], whose demand is rising due to steady economic growth. Agriculture contributes 23 percent of the GDP, 42 percent of the total work force is employed to the agriculture sector and also contributes substantially to Pakistan’s export earnings [Alam (2008)]. Agriculture Commodities and Textiles Products accounts for 62.6 percent of Pakistan's total exports [Memon (2008)]. Pakistan is the ninth largest producer of wheat, 12th largest producer of rice, 5th largest producer of sugarcane and 4rth largest producer of cotton among the top producers in the world as per statistics of FY05 [Memon, et al. (2008)]. Despite overwhelmingly an agrarian economy, Pakistan is unable to produce edible oil sufficient for domestic requirements. Edible oil is considered a necessity in Pakistan and hence its demand is relatively inelastic. There are many reasons behind this shortcoming, for example, lack of awareness of farmers, ignorance of policy makers regarding oilseed crops, technological deficiency in oilseed production and smuggling to neighbouring countries (Afghanistan in particular). The major crop responsible for 57 percent of edible oil production is cotton seed which is primarily a fiber crop. Indigenous production of edible oil is below the consumption levels with a very wide gap between the production and consumption. This gap is bridged through import of edible oil worth more than Rs 45.0 billion1 annually. Presently the oilseed production only meet about 30 percent2 of the domestic requirements and the rest is covered with imports. The high dependency on imports not only exerts the pressure on balance of payment but also develops a close linkage between international price shocks and edible oil price in Pakistan which is ultimately reflected in food expenditure. The common Pakistani food includes a significant quantity of edible oil which is the reason behind high consumption growth rates

ESTIMATION OF AGGREGATE CONSUMPTION FUNCTION FOR HIGH INCOME COUNTRIES

Aggregate Real Private Consumption (ARPC) is one of themajor components of the Gross Domestic Product (GDP) thatcontributes to specify any economy’s long term living standards. The contribution of ARPC stands on average around 55%. It is therefore important to understand the components of consumption, which is almost more than half of the aggregate economic expenditure. The study is an attempt to make a case for developing countries to bring policy level changes in order to determine the consumption pattern of developing countries’ GDP. Using an appropriate empirical model, the study investigates the validity of Permanent Income Hypothesis (PIH) and Absolute Income Hypothesis (AIH) on ARPC for selected developed economies. The results of the study reveal that the importantdeterminants of ARPC in the long-run are real GDP and wealth, while in the short-run they are real interest rate and unemployment rate

Human Capital and Economic Growth: The Role of Governance

Economists agree that human capital is an important determinant of economic growth [Arrow (1962); Aghion and Howitt (1992)]. Human capital-led growth generally concludes the positive impact of the two with the help of existing developed theories and empirical evidences. Nonetheless, the standard empirical result of a direct relationship between human capital (however measured) and economic growth, has been criticised on several fronts. First, the impact of other growth-related factors like quality of education, health of the labour force, inflation, corruption, unemployment, rule of law, etc. should not be ignored. These endogenous characteristics of a country are included in Becker‘s (1993) definition of human capital. In addition, as noted by Abramovitz (1986), social capabilities are important in the adoption and diffusion of technologies but countries differ in social capabilities. Therefore, to the extent to which human capital contributes to economic growth through innovation, its effect is conditioned by the country‘s social capabilities which include factors like quality of institutions and governance

Climate Change and Drought: Impact of Food Insecurity on Gender Based Vulnerability in District Tharparkar

Climate change has now become a reality that has intensified the sufferings of people living in arid ecosystems. Decrease in rainfall, rise in temperature and increase in the frequency of extreme events are some of the changes observed in the semi-arid desert of district Tharparkar. For thousands of years, people of Tharparkar are coping with drought and aridity of the land by using indigenous knowledge. However, global changes in the climatic pattern and deterioration of social and economic conditions have pushed the inhabitants of this arid region into extreme vulnerable situation. This paper investigates the link between climate-induced natural disasters, particularly drought, from the perspective of changing climate patterns which have resulted in food insecurity and water scarcity. The paper analyses the rainfall pattern in the last 38 years—dividing it into two periods i.e. from 1975-1994 and 1995-2014. The findings of the paper have challenged the prevailing notions about aridity and rainfall patterns in Tharparkar district. The research found that there is an increase in average annual precipitation in the district with erratic patterns. Thus, the nature of drought in the district has changed from its historic pattern of less or no rainfall to more but erratic rainfall that is more threatening to livelihoods of the people that in turn have multiplier effect on water and food insecurity. In particularly, women are more vulnerable in the absence of social security and lack of basic necessities for their survival amidst drought. For instance, traditionally the burden of managing water resources falls on women, which leads to an increased work load during the time of drought and also water scarcity. JEL Classification: Q54, Q56, Q25, I30 Keywords: Climate, Environment and Development, Drought, Water, Povert

Searching for Low Cost Alternative Energy Source: An Analysis of Pakistan Sugar Industry

Pakistan is searching for alternative energy sources owing to perpetual power crisis in the country. Stylized facts suggest that there is a strong correlation between energy consumption and economic growth, while more economic activity leads to more employment and contributes to reduce poverty. Supply dynamics considered as major cause of energy crisis in Pakistan. Sugar industry in Pakistan is assumed as an opportunity and potential for alternative energy production. This paper is an attempt to explore the alternative source of energy generation by using latent potential of sugar industry and explore the possibility of having surplus production and generation of electricity for national grid. Bagasse, a residual by-product from sugarcane is traditionally used for generation of electricity in the industry to meet its own energy needs. In addition to the analysis of potentiality of the industry, the economic analysis is also carried out from the perspective of foreign exchange saving that have been used to import furnace oil for power generation. From the retrospective analysis, it is revealed that country could save minimum 242 million dollars during the sugar season that is almost one fourth of the total furnace oil import of the country during the same period

Causal Relationship Between Exports and Agricultural GDP in Pakistan

This paper is an attempt to investigate the causal relationships among agriculture and exports in Pakistan by using time series data for the period between 1971 and 2007. There are several efforts reflecting greater interest in exploring the possible relation between the international trade and economic growth. Increasing of Gross Domestic Product is the main target of almost every economy. Promoting exports of the country is one of the ways of achieving economic growth. Pakistan is among the developing countries, emphasizing to boost its exports since its inception. The major share of Pakistan’s export has strong backward linkages with the agricultural sector both in terms of primary and value added commodities. The findings have significant implications on Pakistan’s economic policy as both the variables have shown strong long-run relationship. There is also a bi-directional Granger-causality between the total exports and agricultural GDP. However, for short-run, both the variable does not cause each other in either direction

Causal Relationship Between Exports and Agricultural GDP in Pakistan

This paper is an attempt to investigate the causal relationships among agriculture and exports in Pakistan by using time series data for the period between 1971 and 2007. There are several efforts reflecting greater interest in exploring the possible relation between the international trade and economic growth. Increasing of Gross Domestic Product is the main target of almost every economy. Promoting exports of the country is one of the ways of achieving economic growth. Pakistan is among the developing countries, emphasizing to boost its exports since its inception. The major share of Pakistan’s export has strong backward linkages with the agricultural sector both in terms of primary and value added commodities. The findings have significant implications on Pakistan’s economic policy as both the variables have shown strong long-run relationship. There is also a bi-directional Granger-causality between the total exports and agricultural GDP. However, for short-run, both the variable does not cause each other in either direction