The document analyzes the relationship between agriculture productivity and economic growth in Pakistan from 1994 to 2017. It finds that:
- Gross capital formation (GCF) and inflation rate have a negative relationship with economic growth in both the short-run and long-run, while other variables like employed labor force, fertilizer, and agriculture productivity have a positive relationship.
- The government should increase investment in agriculture and introduce new technologies to improve productivity in the sector and boost economic growth.
- Empirical results from time series data and the ARDL model show agriculture productivity positively impacts Pakistan's economic growth. Increased productivity leads to increased income, employment, food security, and foreign exchange earnings.
This reduction in supply along with the support by a number of Government schemes, including MGNREGA has led to an escalation in farm wages which is adversely impacting the profitability of the farmer. Rural wages have been growing by 17% on average since 2006-07 outstripping urban wages. At the same time, the increase in wages, without an increase in productivity, is fueling inflation.
Analysis of agricultural subsectors contribution growth rate in the agricultu...inventionjournals
In the current study, we have analyzed the contribution of agricultural sub-sectors growth rate to
the agriculture GDP growth rate of Pakistan by using secondary data from 2001 to 2015. Ordinary Least
Square (OLS) method was applied to estimate the model parameter. For this purpose the study considered a
dependent variable of agriculture GDP growth rate and several independents variables include major, minor
crops, livestock, fishery and forestry. The regression analysis of the data showed a positive and significant
contribution in agriculture GDP growth rate. However, fishery and forestry sub-sectors contribute growth rates
were considered poor as compared with other sub-sectors could be due to less attention paid from the
government. Our study suggests that Government of Pakistan should consider the importance of both
agricultural sub-sectors to increase there’s contribution growth rate towards agriculture GDP growth rate in
Pakistan.
This document summarizes a paper that examines the role and challenges of small-scale agriculture in India. It notes that small and marginal farmers account for over 80% of agricultural land holdings but only 44% of operated area, indicating significant land inequality. Small farms play an important role in agricultural growth, food security, and livelihoods. However, small farmers face challenges in accessing inputs, credit, technology, and markets. Government intervention and support are still needed to level the playing field for small farms and achieve sustainable agricultural growth and food security in India.
Agricultural Development In India Since IndependenceJim Jimenez
This document summarizes a journal article about agricultural development in India since independence. It provides context that agriculture was the main source of India's economy at independence, contributing 50% of national income. Since then, agriculture's contribution has declined to 18% today. The document reviews India's agricultural policies since independence, divided into four phases, and discusses steps taken including land reforms, price supports, and the "Green Revolution" strategy of the 1960s. It evaluates changes in Indian agriculture over time and will analyze sources of agricultural growth and determine factors influencing agricultural production.
Development of Agriculture Sector in BangladeshAbuSayed88800
The document presents information on the development of the agriculture sector in Bangladesh. It discusses the objectives of analyzing the contribution of agriculture to the economy and identifying impediments to the sector's decline. It outlines the methodology used, which primarily involves analyzing secondary data on the economic contributions and growth rates of the agriculture, industry, and service sectors from 2000-2010. Key findings presented include the agriculture sector contributing 19.10% to GDP while employing 50.28% of the labor force. Challenges to the sector are also examined, along with recommendations to support its development.
This document discusses strategies to double farmers' income in India by 2022 as envisioned by Prime Minister Modi. It outlines sources of growth in farm income from increased productivity, crop diversification, and shifting workers to non-farm jobs. Key strategies proposed include expanding irrigation, providing quality seeds and nutrients, investing in infrastructure like warehouses, promoting food processing and national markets, and crop insurance schemes. Overall the goal is to improve productivity and market access for farmers through various agricultural reforms and investments.
This document discusses key issues and policies related to Indian agriculture. It outlines three main goals: 1) achieving 4% agricultural growth to raise incomes through productivity increases and diversification, 2) promoting inclusive growth for small farmers and lagging regions, and 3) maintaining sustainability. Several challenges are also discussed, including low productivity, declining farm sizes, and climate change impacts. The document then examines seven policy topics in depth: macroeconomic policies, transforming agriculture through links to industry, ensuring sustainable food production, improving agricultural markets and trade, building resilience, developing healthy food systems, and strengthening institutions and governance. Throughout, the document emphasizes the importance of sensible policies and innovations to address the needs of small farmers and achieve the three overarching goals
The document analyzes the growth and instability of foodgrain production in Odisha, India over a 20-year period from 1995-1996 to 2014-2015 at the state and district level. It finds that while total foodgrain production experienced no growth in the first decade, the second decade saw impressive growth for all crops, especially other cereals which grew at 7.7% annually. At the district level, most districts also saw higher growth rates for paddy, other cereals, pulses and total foodgrains in the second decade compared to the first. However, some districts still experienced negative or low growth for certain crops. The study also found that instability or risk in foodgrain production decreased at the state level in the second
This reduction in supply along with the support by a number of Government schemes, including MGNREGA has led to an escalation in farm wages which is adversely impacting the profitability of the farmer. Rural wages have been growing by 17% on average since 2006-07 outstripping urban wages. At the same time, the increase in wages, without an increase in productivity, is fueling inflation.
Analysis of agricultural subsectors contribution growth rate in the agricultu...inventionjournals
In the current study, we have analyzed the contribution of agricultural sub-sectors growth rate to
the agriculture GDP growth rate of Pakistan by using secondary data from 2001 to 2015. Ordinary Least
Square (OLS) method was applied to estimate the model parameter. For this purpose the study considered a
dependent variable of agriculture GDP growth rate and several independents variables include major, minor
crops, livestock, fishery and forestry. The regression analysis of the data showed a positive and significant
contribution in agriculture GDP growth rate. However, fishery and forestry sub-sectors contribute growth rates
were considered poor as compared with other sub-sectors could be due to less attention paid from the
government. Our study suggests that Government of Pakistan should consider the importance of both
agricultural sub-sectors to increase there’s contribution growth rate towards agriculture GDP growth rate in
Pakistan.
This document summarizes a paper that examines the role and challenges of small-scale agriculture in India. It notes that small and marginal farmers account for over 80% of agricultural land holdings but only 44% of operated area, indicating significant land inequality. Small farms play an important role in agricultural growth, food security, and livelihoods. However, small farmers face challenges in accessing inputs, credit, technology, and markets. Government intervention and support are still needed to level the playing field for small farms and achieve sustainable agricultural growth and food security in India.
Agricultural Development In India Since IndependenceJim Jimenez
This document summarizes a journal article about agricultural development in India since independence. It provides context that agriculture was the main source of India's economy at independence, contributing 50% of national income. Since then, agriculture's contribution has declined to 18% today. The document reviews India's agricultural policies since independence, divided into four phases, and discusses steps taken including land reforms, price supports, and the "Green Revolution" strategy of the 1960s. It evaluates changes in Indian agriculture over time and will analyze sources of agricultural growth and determine factors influencing agricultural production.
Development of Agriculture Sector in BangladeshAbuSayed88800
The document presents information on the development of the agriculture sector in Bangladesh. It discusses the objectives of analyzing the contribution of agriculture to the economy and identifying impediments to the sector's decline. It outlines the methodology used, which primarily involves analyzing secondary data on the economic contributions and growth rates of the agriculture, industry, and service sectors from 2000-2010. Key findings presented include the agriculture sector contributing 19.10% to GDP while employing 50.28% of the labor force. Challenges to the sector are also examined, along with recommendations to support its development.
This document discusses strategies to double farmers' income in India by 2022 as envisioned by Prime Minister Modi. It outlines sources of growth in farm income from increased productivity, crop diversification, and shifting workers to non-farm jobs. Key strategies proposed include expanding irrigation, providing quality seeds and nutrients, investing in infrastructure like warehouses, promoting food processing and national markets, and crop insurance schemes. Overall the goal is to improve productivity and market access for farmers through various agricultural reforms and investments.
This document discusses key issues and policies related to Indian agriculture. It outlines three main goals: 1) achieving 4% agricultural growth to raise incomes through productivity increases and diversification, 2) promoting inclusive growth for small farmers and lagging regions, and 3) maintaining sustainability. Several challenges are also discussed, including low productivity, declining farm sizes, and climate change impacts. The document then examines seven policy topics in depth: macroeconomic policies, transforming agriculture through links to industry, ensuring sustainable food production, improving agricultural markets and trade, building resilience, developing healthy food systems, and strengthening institutions and governance. Throughout, the document emphasizes the importance of sensible policies and innovations to address the needs of small farmers and achieve the three overarching goals
The document analyzes the growth and instability of foodgrain production in Odisha, India over a 20-year period from 1995-1996 to 2014-2015 at the state and district level. It finds that while total foodgrain production experienced no growth in the first decade, the second decade saw impressive growth for all crops, especially other cereals which grew at 7.7% annually. At the district level, most districts also saw higher growth rates for paddy, other cereals, pulses and total foodgrains in the second decade compared to the first. However, some districts still experienced negative or low growth for certain crops. The study also found that instability or risk in foodgrain production decreased at the state level in the second
An Analytical Study on Impact of WTO on Agricultural Trade in India.Eliza Sharma
1. To study the trends of agricultural trade in India during pre and post WTO regime
2. To compute the terms of trade in Indian agriculture
3. To examine the comparative advantage in India’s agricultural trade.
4. To study the instability of India’s agricultural trade and suggest appropriate policy measures for improving the agricultural trade
1) Agriculture faces problems due to limited land supply, making sustained food imports not viable for India's needs. Increased agricultural productivity is required to ensure food security for current and future populations.
2) While services have replaced agriculture as the largest GDP contributor, agriculture remains the largest employer in India. The development of high-yielding seeds and the fertilizer-irrigation package in the 1960s led to large increases in productivity.
3) There are still significant variations in productivity across states and regions in India, highlighting the need to address disparities. Increased production is also required to meet projected demand increases for items like oilseeds, fish, eggs, and fruits by 2020-2021.
Problems and Challenges of Agro Entreprenurship A Studyijtsrd
Noting calls for contextualizing Agro entrepreneurs problems and challenges of the agro entrepreneurs and for greater attention to the Role of entrepreneurs in agro entrepreneurship research, we conduct a systematic literature review of extent research in agriculture entrepreneurship to overcome the study objectives of complications of agro entrepreneurs through various factors, Development of agriculture products is a key factor for the overall economic growth of agro entrepreneurs Agro Entrepreneurs produces firsthand large scale employment, utilizes the labor and natural resources, This research outlines the problems of Weather and Soil Erosions, Market price fluctuation, stimulates labor cost problems, reduces concentration of Price volatility, Dependency on Intermediaries, induces Limited Bargaining Power, and Storage and Transportation Costs. This paper mainly devoted to highlight Problems and challenges faced for the sustainable of Agro Entrepreneurs in India. Vinay Prasad B "Problems and Challenges of Agro Entreprenurship - A Study" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd64540.pdf Paper Url: https://www.ijtsrd.com/other-scientific-research-area/other/64540/problems-and-challenges-of-agro-entreprenurship--a-study/vinay-prasad-b
The document discusses the growth of India's economy, with a focus on the agricultural and services sectors. It notes that agriculture currently contributes around 18% to India's GDP but employs over half the population. The services sector now accounts for over half of GDP and has grown rapidly, especially in IT and IT-enabled services. Key challenges for agriculture include low productivity, resource degradation, and wide disparities across regions. Rapid growth in services has not been evenly distributed or matched by equivalent job growth.
The Impact of Agricultural and Industrial Sectors on Economic Development in ...iosrjce
This study aimed at investigating the impact of the agricultural and industrial sector on the overall
economic development of the Nigeria using secondary data from 1981 – 2012. A multiple regression approach
was used for the estimation. To determine the stability of the time series data used in the study, Augmented
Dickey–Fuller (ADF) and Philips–Perron (pp) unit root tests were adopted. The empirical results show
cointegration relations among Real GDP per capita (RGDPP), Agricultural contribution to RGDPP (ARG),
Industrial contribution to RGDPP (IND), Interest rate (INT) and Inflation rate (IFL) in the period under
investigation. Agricultural and industrial contributions to RGDPP are significant variables explaining
economic development in Nigeria. The overall result of the analysis indicates that these sectors have significant
positive effect on economic development of Nigeria both in the short-run and in the long-run. This research
therefore suggest that there is need for government and the private investors to focus their attention on these
sectors to boost the economy of the nation and efforts must be made to diversified the economy and focus should
be shifted away from export of crude oil only and more effort should be concentrated on agricultural and
industrial development. This would translate to meaningful development in these sectors which will trickle down
to create employment opportunities, enhance productivity and increase agricultural production for exports.
Problems and Prospects of Poultry Industry in Bangladesh: An Analysis Md. Moulude Hossain
The poultry industry has been successfully becoming a leading industry of Bangladesh. The primary objective of the study is to identify the various aspect relating the growth and ustainability of poultry industry in Bangladesh. Authors argued that strategic management in poultry sector requires complementing to achieve present Govt.’s vision of Digital Bangladesh 2021. Considering the importance of the country’s poultry industry in order to ensure the sustainable economic development it is now high time to step forward for the better accumulation of resources available from this industry. This industry proves various opportunities of increasing GDP growth rate plus equitable distribution through arranging food security as well as ensuring self-employment at a large scale as pointed out by the authors.
Effects of Rice Liberalization Law on Rice Production, Farmers’ Wages and Gov...IJAEMSJORNAL
- The document analyzes the effects of the Rice Liberalization Law on rice production, farmers' wages, and government budgets in Nueva Ecija, Philippines.
- Quantitative analysis using time series data from 2010-2019 finds that government budgets have a significant positive effect on rice production, while low production negatively impacts farmers' wages and income.
- The study aims to determine if liberalizing rice trade through the Rice Liberalization Law significantly impacted the current rice market situation in Nueva Ecija.
Do Investments in Agricultural Extension Deliver Positive Benefits to Health,...Premier Publishers
The study provides an overview of the state of Agricultural Extension with the major aim of identifying gaps and areas of advocacy in the laws and policies that govern extension service delivery in Uganda, document the linkages and analytical trends between agricultural extension and performance of Health, Trade and Industry and Water and Environment sectors, as well as establish the value of each shilling or dollar invested in agricultural extension. Using secondary sources of data and Statistical Based Costing methods, the results revealed that the state of agricultural extension services in Uganda is wanting. Adoption of improved technologies was very low and technology misuse was very rampant. In livestock, the quality of veterinary services and their use were particularly very low. Our results showed that the unit cost of providing agricultural extension services that result in increased productivity, better nutrition as well as higher incomes to farmers is UGX 66,290 per visit. The total cost of not providing agricultural extension is extremely high and the country stands to lose greatly due to the multiplier effect and spillover effect of agricultural extension in other productive sectors. There is certainly need to invest in agricultural extension both in crop and livestock sectors.
The document discusses strategies for doubling farmers' income in India by 2022. It notes that past strategies focused on increasing agricultural output but did not explicitly aim to raise farmers' incomes. Key sources of growth identified to meet the 10.4% annual growth target include improving productivity, diversifying crops, increasing processing levels, and strengthening market linkages. Various central government schemes are outlined that aim to boost production, post-harvest management, marketing, food processing, and provide training and financing support to help achieve the goal of doubling farmers' incomes.
Uday salunkhe challenges and opportunties for agri sector in indiaudaysalunkhe
This article talks about the Challenges and opportunities for agriculture sector in India. It has been co- authored by Dr. Uday Salunkhe, Director of the prestigious Welingkar Institute of Management and Research
This article talks about the Union Budget 2009-2010 and gives details whether it fits together with the vision 2020. It has been co- authored by Dr. Uday Salunkhe, Director of the prestigious Welingkar Institute of Management and Research.
Effect of Agricultural Transformation Agenda Support Program Phase 1 Atasp 1 ...ijtsrd
This study examined the effect of Agricultural Transformation Agenda Support Programme Phase 1 ATASP 1 on Farmers Performance in Southeast, Nigeria. It used a well structured questionnaire to collect data from a cross section of randomly selected 730 respondents. A combination of analytical tools such as descriptive statistics, Tobit and multiple regression analysis and inferential statistics were used for analysis. The study found that 56.6 of the farmers are males with an average age of 44 years, who are 87.8 married and have 10 years of formal schooling. Apart from over 19 years farming experience, the average 6 people per household is large enough to supply cheap family labour to the farmers. The study found out that the programme interventions are classified into three important components, which are infrastructure, financial market and commodity value chain development. It was also revealed that farmers adopted the following agricultural technologies the use of improved seed varieties, the use of ICT extension facilities, and keeping a good farm processing record to track changes, among others. The study, therefore, recommended among others, that the programme implementers need to be transparent in their disbursement and implementation of the project mandates and that there is a need to improve the literacy level of the farmers, as this will go a long way to improve their possibilities of technology adoption. Johnpaul Chimnedum Onyekineso | Nwankwo Frank "Effect of Agricultural Transformation Agenda Support Program Phase 1 (Atasp-1) on Farmers' Performance in Southeast, Nigeria" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-5 | Issue-6 , October 2021, URL: https://www.ijtsrd.com/papers/ijtsrd46407.pdf Paper URL : https://www.ijtsrd.com/management/business-economics/46407/effect-of-agricultural-transformation-agenda-support-program-phase-1-atasp1-on-farmers'-performance-in-southeast-nigeria/johnpaul-chimnedum-onyekineso
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
Growth and Instability of Area, Production, and Yield Under Rice Cultivation ...BRNSSPublicationHubI
This document summarizes a research article that analyzed the growth and instability of rice cultivation area, production, and yield in Uttar Pradesh, India from 1991 to 2021. The study period was divided into three subperiods. The analysis found that rice production growth declined sharply during subperiod II (2000-2011) and instability was highest during this period as well. The study suggested developing rice varieties better suited to local soil and climate conditions to improve yields.
Challenges And Opportunities Of Globalisationloveleenchawla
Globalization: challenges and opportunities
Abstract:
Globalization is a multifaceted phenomenon. The paper identify some of the
Challenges it poses, as well as some of the opportunities it offers. Attention is focused on three major aspects of globalization namely economic, cultural, and political.
During 1990 to 2003, the volume of world trade has increased and the higher and middle-income countries managed to increase their share in world trade mainly due to the opening up of economies because of globalization. The middle-income countries had invited more Foreign Direct Investment during the period and the per capita GDP of the low-income countries was marginally increased. This resulted into the economic inequality, which widened between different income groups. In other words globalization has been confined to developed countries and developing countries were able to participate in the process.
However, globalization should not be accused for loosing share of the low-income countries. These countries suffered from internal problems like rapid rise in population, infrastructure bottlenecks, weak financial markets and so on.
Globalization and its benefits required a conducive environment to ensure higher returns and larger markets for foreign investors. To get a share of global capital, technology and output, developing countries had to upgrade their social and economic institutions through administrative, legislative and legal reforms.
Globalization merely provides opportunities to flourish. Globalization is not a tool to produce equality of outcome but it produces equality of opportunity for those with right mindset. Therefore developing countries require focusing on economic restructuring, developing market-supporting institutions and creating efficient regulatory mechanisms.
The low-income countries cannot survive at their own; they require international assistance and a support mechanism so as to facilitate their participation in the process of globalization. The challenge of the hour is to make globalization work towards global prosperity through disaggregate development. The critically necessity in this context are the collective and cooperative actions which should be realized by all countries of the world and particularly the developed ones.
This document discusses the performance of agro-based industries in India. It notes that agro-based industries are dependent on agriculture for raw materials and can play an important role in solving problems like poverty, unemployment, and inequality. The document provides statistics on the number and size of agro-based industries in India and examines their production growth rates between 2009-2014. It also analyzes India's exports of major agro-based products such as rice, spices, sugar, and coffee. The summary concludes that agro-based industries have significantly impacted income levels in rural areas of India.
This document discusses the performance of agro-based industries in India. It notes that agro-based industries are dependent on agriculture for raw materials and can play an important role in solving problems like poverty, unemployment, and inequality. The document provides statistics on the number and size of agro-based industries in India and examines their production growth rates between 2009-2014. It also analyzes India's exports of major agro-based products such as rice, spices, sugar, and coffee. The summary concludes that agro-based industries have significantly impacted income levels in rural areas of India.
This document discusses the performance of agro-based industries in India. It notes that agro-based industries are dependent on agriculture for raw materials and can play an important role in solving problems like poverty, unemployment, and inequality. The document provides statistics on the number and size of agro-based industries in India and examines their production growth rates between 2009-2014. It also analyzes India's exports of major agro-based products such as rice, spices, sugar, and coffee. The summary concludes that agro-based industries have significantly impacted income levels in rural areas of India.
This document discusses the performance of agro-based industries in India. It notes that agro-based industries are dependent on agriculture for raw materials and can play an important role in solving problems like poverty, unemployment, and inequality. The document provides statistics on the number and size of agro-based industries in India and examines their production growth rates between 2009-2014. It also analyzes India's exports of major agro-based products such as rice, spices, sugar, and coffee. The summary concludes that agro-based industries have significantly impacted income levels in rural areas of India.
Scientific Review Summary Examples How To WriteLuz Martinez
The passage discusses early disagreements within Christianity regarding the nature of Jesus, the Gnostic gospels, and the Council of Nicaea. There was debate over whether Jesus was fully human or divine, and the Gnostic gospels that were excluded from the Bible by the Council caused further disagreement. The Council also established the doctrine of the Trinity, which posed intellectual challenges for some early Christians.
Tree Writing Paper - Made By Teachers Christmas WLuz Martinez
Decolonization refers to the undoing of colonialism in the 20th century as nations established dominance over dependent territories. The process involved freeing colonies from foreign rule and transitioning them to self-governance. Decolonization accelerated following World War II as colonial powers lost prestige and the economic costs of empire grew. By the 1960s, most colonies in Asia and Africa had gained independence as nationalist movements opposed colonial rule. Decolonization reshaped the global political landscape and transferred power into the hands of new independent states.
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1. To study the trends of agricultural trade in India during pre and post WTO regime
2. To compute the terms of trade in Indian agriculture
3. To examine the comparative advantage in India’s agricultural trade.
4. To study the instability of India’s agricultural trade and suggest appropriate policy measures for improving the agricultural trade
1) Agriculture faces problems due to limited land supply, making sustained food imports not viable for India's needs. Increased agricultural productivity is required to ensure food security for current and future populations.
2) While services have replaced agriculture as the largest GDP contributor, agriculture remains the largest employer in India. The development of high-yielding seeds and the fertilizer-irrigation package in the 1960s led to large increases in productivity.
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Noting calls for contextualizing Agro entrepreneurs problems and challenges of the agro entrepreneurs and for greater attention to the Role of entrepreneurs in agro entrepreneurship research, we conduct a systematic literature review of extent research in agriculture entrepreneurship to overcome the study objectives of complications of agro entrepreneurs through various factors, Development of agriculture products is a key factor for the overall economic growth of agro entrepreneurs Agro Entrepreneurs produces firsthand large scale employment, utilizes the labor and natural resources, This research outlines the problems of Weather and Soil Erosions, Market price fluctuation, stimulates labor cost problems, reduces concentration of Price volatility, Dependency on Intermediaries, induces Limited Bargaining Power, and Storage and Transportation Costs. This paper mainly devoted to highlight Problems and challenges faced for the sustainable of Agro Entrepreneurs in India. Vinay Prasad B "Problems and Challenges of Agro Entreprenurship - A Study" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-8 | Issue-1 , February 2024, URL: https://www.ijtsrd.com/papers/ijtsrd64540.pdf Paper Url: https://www.ijtsrd.com/other-scientific-research-area/other/64540/problems-and-challenges-of-agro-entreprenurship--a-study/vinay-prasad-b
The document discusses the growth of India's economy, with a focus on the agricultural and services sectors. It notes that agriculture currently contributes around 18% to India's GDP but employs over half the population. The services sector now accounts for over half of GDP and has grown rapidly, especially in IT and IT-enabled services. Key challenges for agriculture include low productivity, resource degradation, and wide disparities across regions. Rapid growth in services has not been evenly distributed or matched by equivalent job growth.
The Impact of Agricultural and Industrial Sectors on Economic Development in ...iosrjce
This study aimed at investigating the impact of the agricultural and industrial sector on the overall
economic development of the Nigeria using secondary data from 1981 – 2012. A multiple regression approach
was used for the estimation. To determine the stability of the time series data used in the study, Augmented
Dickey–Fuller (ADF) and Philips–Perron (pp) unit root tests were adopted. The empirical results show
cointegration relations among Real GDP per capita (RGDPP), Agricultural contribution to RGDPP (ARG),
Industrial contribution to RGDPP (IND), Interest rate (INT) and Inflation rate (IFL) in the period under
investigation. Agricultural and industrial contributions to RGDPP are significant variables explaining
economic development in Nigeria. The overall result of the analysis indicates that these sectors have significant
positive effect on economic development of Nigeria both in the short-run and in the long-run. This research
therefore suggest that there is need for government and the private investors to focus their attention on these
sectors to boost the economy of the nation and efforts must be made to diversified the economy and focus should
be shifted away from export of crude oil only and more effort should be concentrated on agricultural and
industrial development. This would translate to meaningful development in these sectors which will trickle down
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Problems and Prospects of Poultry Industry in Bangladesh: An Analysis Md. Moulude Hossain
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The document discusses strategies for doubling farmers' income in India by 2022. It notes that past strategies focused on increasing agricultural output but did not explicitly aim to raise farmers' incomes. Key sources of growth identified to meet the 10.4% annual growth target include improving productivity, diversifying crops, increasing processing levels, and strengthening market linkages. Various central government schemes are outlined that aim to boost production, post-harvest management, marketing, food processing, and provide training and financing support to help achieve the goal of doubling farmers' incomes.
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AGRICULTURE PRODUCTIVITY AND ECONOMIC GROWTH A CASE OF PAKISTAN
1. Global Journal of Management, Social Sciences and Humanities 492
Vol 6 (2) July-Sept, 2020, pp. 492-516.
ISSN 2520-7113 (Print), ISSN 2520-7121 (Online)
www.gjmsweb.com. Email:editor@gjmsweb.com
Impact Factor value = 4.739 (SJIF).
DOI: https://orcid.org/0000-0001-5767-6229
AGRICULTURE PRODUCTIVITY AND ECONOMIC
GROWTH: A CASE OF PAKISTAN
Prof. Dr. Abdul Ghafoor Awan1, Aroosa Mukhtiar2
ABSTRACT-The objective of this research paper is to study the agriculture
productivity and its impact on economic growth of Pakistan. The ADF test was
used to check the stationarity among variables. ARDL Model was applied to
determine long-run and short-run relationship between agriculture
productivity and economic growth, using secondary data from1994 to 2017.
Our empirical results show that GCF and inflation rate have negative
relationship with economic growth while all other variables have positive
relationship with economic growth in short-run and long-run. We suggest that
Government should make more investment and introduce new technology in
agriculture sector to improve its productivity.
Keywords: Agriculture productivity, economic growth, gross capital
formation, employed labor force, inflation rate.
Type of study: Original research paper
Paper received: 30.04.2020
Paper accepted: 25.05.2020
Online published: 01.07.2020
______________________________________________________________
1. Dean, Faculty of Management Sciences, Institute of Southern Punjab,
Multan. ghafoor70@yahoo.com.
2. M.Phil Scholar, Department of Economics, Institute of Southern Punjab.
aroosazumar110@gmail.com.
2. 493 Abdul Ghafoor Awan, Aroosa Mukhtiar
____________________________________________________________
1. INTRODUCTION
1.1. Overview of Agriculture productivity
Agriculture productivity is a mainstay for the economy of Pakistan.
This is the second biggest sector of Pakistan’s economy because its share in
GDP is more than 21% and it employs half of its labor force which is about
45% of total labour force. Almost 67% of population lives in rural areas
depending on this sector for their survival. The purpose of agriculture progress
is to minimize poverty in rural areas. Agriculture also plays key role in
progress of industrial sector. This sector supplies raw material to the industrial
sector and industrial sector provides machinery, fertilizer and pesticides to
agriculture sector. The use of this products increase national income. Fertilizer
is the most important input to improve crop yield. The use of fertilizer
enhanced the fertility of land and this step increase the productivity of major
and minor crops.
Agriculture sector has many roles in the progress of Pakistan’s
economy. First, this sector accomplishes the needs of food to all the people of
nation. Second, it provides employment to the people. Third, it significantly
contributes to reduce poverty. Fourth, it raises the income of people who
worked in this sector. Fifth, it supplies raw material to the industrial sector.
Sixth, it supports those people who migrate from rural areas to urban areas.
Seventh, this agrarian sector is a big source of earnings of foreign exchange,
which is used to purchase the imported goods that include machinery, capital
goods and manufacturing goods. Lastly, agriculture supplies goods and
services to household, industries and to world market.
During the period of 1970’s to 2017’s, the role of agriculture sector has
been changed. The growth rate has decreased to 2.4% in 1970’s because of
3. Agriculture productivity and Economic growth: A case of Pakistan 494
____________________________________________________________
structural issues. However, it went up to 5.4% during the period of 1980’s
because of Green Revolution. In the decade of 1990 the agriculture growth
rate was about 4.3% because of shift the focus from agriculture to industry.
During the period of 2000’s the growth rate of agriculture productivity
perpetually decreased from 3.2% to -2.2% in the 2000, 0.1% in 2001, 4.1%
in the period of 2002, and 2.4% in the year of 2003, that was the lowest rate
of growth due to the heavy rain that the severely affected the productivity of
agriculture sector. After that during of 2004 to 2005 the growth rate of
agriculture productivity was surprisingly raised to 6.4% because of timely
water’s supply. But it was again fell 3.5% during the period of 2006, 1.0% in
the year of 2007, 4.0% in the year of 2008, 2.0% in the year of 2009, and 2.0%
in the year of 2010. Later, during the period of 2011 and 2012 the growth rate
was 3.6% and 2.7% respectively while it was 2.5% and 2.1 % during 2013 and
2014 and 0.2% during 2015 which was the lowest growth rate in that period,
However, the growth rate was jumped to 5.28% in the year of 2016-17 which
was highest during last 10 years.
1.1 Main Research Problem
The main research problem is to study the “the relationship between
agriculture productivity and economic growth in Pakistan.”
1.2 Objective of the Research:
Main objectives of this research paper are listed below:
• To study the causes of variations in agriculture productivity.
• To investigate long run relationship between agriculture productivity
and economic growth.
• To suggest some policies to improve level of agriculture productivity
4. 495 Abdul Ghafoor Awan, Aroosa Mukhtiar
____________________________________________________________
and economic growth in Pakistan to reduce poverty.
1.3 Significance of the research:
This research is very important for improving the productivity of food,
foreign exchange earnings and job opportunities in Pakistan. It has importance
for farmers, public, government, student, teachers, investors, common readers,
economist and policy makers as well.
2. LITERATURE REVIEW:
Ahmad (2012) has studied the determinants of agriculture productivity
growth in the Pakistan. ARDL model has been employed to estimate the
significant impact of total factor productivity (TFP). Five variables were
selected in this research for the time period of 1965-2009 which obtained from
different issues of Pakistan economic surveys. The three variables like
fertilizer, human capital and agriculture credit to increase the capacity of total
factor productivity. The results show that cropped area was not increased
significantly in the case of short run and long run. Human capital and Fertilizer
had the highest influence in the long and short run elasticity of production.
The study concluded that the provision of skilled labor force and food security
should be assured to increase the agriculture productivity.
Alam (2015) investigated the influence of agriculture productivity on
economic growth. Secondary data has been used for the year of 1972-to-2012.
Autoregressive distributed lags technique was applied to determine the
agriculture production and its influence on economic progress. The influence
of inflation rate on economic growth has negative while the impact of all other
variables such as GCF, trade, ELF, agriculture value added and openness has
positive on economic progress. During this period, Government makes the
policies to increase the agriculture productivity and economic growth through
5. Agriculture productivity and Economic growth: A case of Pakistan 496
____________________________________________________________
skilled labor force, surety of trade and provision of better raw material. The
result shows that there was the more contribution of agriculture productivity
in economic growth.
Ali (2012) investigated the role of agrarian sector in economic
development of Pakistan. Simple regression method was used to modify the
importance of agriculture sub-sectors like as livestock, major crops, fisheries,
minor crops and economic growth with GDP. OLS method was used to study
the agriculture sub-sector and economic growth. Seven variables were used in
this specification study. The consequence of empirical analysis show that the
relationship between forestry and GDP was significant. While the association
among GDP and all other independent variables were significant. They had
positive relationship with GDP. 90% Contribution of crops and livestock in
agriculture sector show robust performance while the contribution of fisheries
and forestry had low contribution in overall agriculture productivity due to
lack of investment.
Awan and Aslam (2014) attempted to measure the impact of
agriculture and its influence on economy of Pakistan. They disclosed that
Pakistan was facing many problems such as low output due to low investment,
insufficient food due to over population and inefficient management due to
low education system. Pakistan’s products have no value in the international
market due to low output and poor quality. Pakistan should take some steps to
eradicate the problems of agrarian sector. The new technologies should be
introduced such as the use of mechanization, new method of irrigation and the
quality of packing.
Faridi (2012) explored the contribution of agrarian exports to
economic development in Pakistan. He applied the Johansen co-integration
6. 497 Abdul Ghafoor Awan, Aroosa Mukhtiar
____________________________________________________________
test, using secondary data from the 1972-2008 to see the result of agriculture
exports and Economic progress. The result revealed that increase in agriculture
exports will decline the economic growth. Agriculture exports increases the
agriculture productivity. Thus, study concludes that agriculture exports have
negative impact on economic progress and significant influence on economic
development but non-agriculture exports have positive influence on economic
development. He recommended that Government should promote non-
agriculture products and textile products.
Awan and Naseem (2018) studied the impact of government
expenditures on economic development in Pakistan. They used time series
data from 2005 to 2015. OLS method was applied for analysis of data and
linear regression model was used to obtain results. Economic growth was
taken as dependent variable and Health, education, investment and saving rate
were taken as independent variables. They found that education and health
have negative impact on Pakistan’s GDP because educated worker (human
capital) are unemployed whereas investment and saving have a slightly
positive impact. They also found that skill development enhances the
efficiency and productivity of human capital and consequently it enhances
economic growth.
Chandio et al (2016) examined the share of agrarian sector and GDP
growth rate in Pakistan by using secondary data over the period of 1971 to
2015. ARDL model was used to show that the agriculture has substantial effect
on every sector as well as on GDP. The results showed that the association
between agriculture productivity and economic development has significant
influence on GDP. They emphasized that new technologies should be
7. Agriculture productivity and Economic growth: A case of Pakistan 498
____________________________________________________________
introduced in all sectors of Pakistan for the improvement of agriculture
productivity. And this step would increase the economic growth of Pakistan.
Khan et al (2016) investigated the agriculture value added and poverty
reduction in Pakistan. Improvement in agriculture production leads to the
reduction in poverty. The secondary data has been applied in this research
during the year of 1972-2013. Johansen co-integration model has been
employed to examine the long run association among the agriculture, poverty
reduction and its determinant with GDP. The study revealed that agriculture
productivity like livestock and employed labor force help to minimize the
poverty. Poverty has negative influence on economic development. So the
result concludes that agrarian value added has positive influence on economic
growth.
Muhammad (2016) evaluated the contribution of agrarian sector in the
GDP growth in Pakistan. He included livestock major crops and other crops
in the study and found that they are the backbone of agriculture which
contributes the 23.5% share in GDP. His results indicated that there was the
strong association between the agriculture and GDP annual growth rate.
Because agriculture sector provides the jobs and incentives for the farmers,
provide food supply and accessibilities of pesticides. Thus agriculture impact
has significant and positive influence on economic progress.
3. RESEARCH METHODOLOGY:
Methodology of research is the theoretical process that is used to
identify, select variables and collect data about a research topic. The
researcher critically estimates the study’s overall effectiveness and accuracy.
The research methodology contains selection of topic, collection of data,
interviews, surveys and other techniques.
8. 499 Abdul Ghafoor Awan, Aroosa Mukhtiar
____________________________________________________________
3.1 Nature of study:
This study is quantitative in nature because secondary data has been
used in it in order to determine relationship between agriculture productivity
and economic growth in Pakistan.
3.2. Types of data and sources:
Secondary data has been used in this study. The data is collected from
World Development Indicator, Pakistan Economic Survey and Hand Book of
Statistics. The sampling period of the study is spread of 20 years from 1997-
2017.
3.3 Selected Variables and their definitions
• GDP (Gross Domestic Product) __________Dependent variable
• INF (Inflation Rate) ___________________Independent variable
• ELF (Employed Labor Force) ___________ Independent variable
• GCF (Gross Capital Formation) __________Independent variable
• FER (Fertilizer) ____________________ __Independent variable
• AGRI (Agriculture)__________________ _Independent variable
3.3.1 Gross Domestic Product
The country produced all goods and services within a particular year. This is
called GDP. GDP selected as dependent variable which show the economic
growth. If GDP increase, then economic growth will also increase.
3.3.2 Inflation Rate
In economics, inflation is the rate in which shows overall increase in the prices
rise of goods and services over a period of time. Inflation declines the
purchasing power of a nation’s currency. It has a major effect on country’s
whole economy and its population. Consumer price index also measures
inflation rate.
9. Agriculture productivity and Economic growth: A case of Pakistan 500
____________________________________________________________
3.3.3 Employed Labor Force
Employed labor force means the people who are working actively in different
places like; firms, banks, shops and industries. Employed labor force is an
essential requirement for the economic growth in a country. If country
provides more employment opportunities, then it will cause high economic
growth and vice versa.
3.3.4 Gross Capital Formation (GCF)
GCF defines as two goods fixed assets and net change in inventories. Non-
liquid assets contain machinery, plant, equipment and structures, while
inventory contains works in procedure. GCF helps to measure the GDP of any
country.
3.3.5 Fertilizer:
Fertilizer is the mixture of chemical substances or solid animal waste that is
applied to fertilize the soil and this use of substances enhances the productivity
of plant growth. Fertilizer has three beneficial macronutrients include
phosphorus, potassium and nitrogen. Fertilizer is the essential requirement for
the improvement of agriculture productivity.
3.3.6 Agriculture Productivity:
Agriculture productivity is concerned with fertility of land. This reflects
raising livestock, major and minor crops also. Agriculture sector is related to
economic growth. If the productivity of agriculture increased the economic
growth will also increase. This sector fulfills the needs of food of Pakistan.
3.4 Hypothesis Formulation
H0 = Agriculture productivity has no positive relationship with economic
growth in Pakistan.
H1 = Agriculture productivity has positive relationship with economic growth
10. 501 Abdul Ghafoor Awan, Aroosa Mukhtiar
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in Pakistan.
3.5 Econometric Model:
The econometric model of this study is given below:
GDP= β0 + β1 (INF) + β2 (GCF) + β3 (AGRIP) + β4 (ELF) + β5 (FER) + µ (1)
Where:
GDP = Gross Domestic Product annual growth
INF = Inflation
GCF = Gross Capital Formation
AGRIP = Agriculture productivity
ELF = Employed Labor Force
FER = Fertilizer
β0 = Intercept
β1, β2, β2, β3, β4, β5 = Slope Coefficient
µ = Error Term
11. Agriculture productivity and Economic growth: A case of Pakistan 502
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4. DATA ANALYSIS:
4.1 Descriptive Statistics:
The results of descriptive statistics are shown in Table 1: -
Table 1: Results of Descriptive Statistics
GDP INF GCF AGRI ELF FER
Mean 4.106 8.218 17.019 3.316 44.35 5.38
Median 4.328 7.645 16.877 3.100 43.441 5.800
Maximum 7.667 20.286 19.546 11.700 50.056 6.900
Minimum 1.014 2.529 14.120 -2.200 41.010 3.800
Std.Dev. 1.729 4.461 1.645 2.846 2.528 1.104
Skewness 0.170 0.729 0.012 0.809 0.761 -0.296
Kurtosis 2.542 3.239 1.799 4.546 2.355 1.570
Jarque-Bera 0.325 2.187 1.442 5.010 2.732 2.295
Probability 0.849 0.335 0.486 0.081 0.255 0.317
Calculated by Author through Eviews Software
The descriptive statistics indicates about median, mean, minimum, maximum,
skewness standard deviation, kurtosis and jarque-bera and the probability.
Time series data consist of 23 years of annual observations from 1994 to 2017.
12. 503 Abdul Ghafoor Awan, Aroosa Mukhtiar
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This data in table 1 shows that the average growth of GDP is 4.106 with std.
deviation of 1.72. The average inflation (INF) rate is 8.21 with the std.
deviation of 4.46. The average or mean value for gross capital formation
(GCF) is 17.01 with the std. deviation of 1.64. The mean value for agriculture
productivity (% of GDP growth) is 3.31 with the std. deviation of 2.84. The
mean value of employed labor force is 44.35 with the std. deviation of 2.52
and the mean value of fertilizer is 5.38 with the standard deviation of 1.10. All
the variables include GDP, inflation, GCF, agriculture and EFF are positively
skewed except fertilizer that negatively skewed. Kurtosis statistic of the
variables indicate that GDP, GCF, employed labor force and fertilizer are
platykurtic (lower peak or short tailed) because their value is less than 3.
Variables include inflation and agriculture is Laptokurtic (long tailed or high
peak) because their value is greater than 3. The results indicate that Jarque-
Bera P (Probability) value of GDP is 0.84 that is greater than 10%, therefore,
we accept the null hypothesis means data is normally distributed. Jarque-Bera
P value of inflation is 0.33 that is greater than 10%, we accept the null
hypothesis as its means data is normally distributed. Therefore, Jarque-Bera P
value of all the others variables are greater than 10%, we accept the null
hypothesis because the data are normally distributed. The P-value of Jarque-
Bera of fertilizer is 0.08 that is not normally distributed.
13. Agriculture productivity and Economic growth: A case of Pakistan 504
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4.2 Correlation Analysis:
The result of correlation analysis is given in table 2.
Table 2: Results of Correlation Matrix
GDP INF GCF AGRI ELF FER
GDP 1 -0.337 0.133 0.244 -0.261 0.158
INF -0.337 1 0.348 0.310 0.132 0.210
GCF 0.133 0.348 1 0.217 0.461 -0.341
AGRI 0.244 0.310 0.217 1 0.060 -0.093
ELF -0.261 0.132 0.461 0.060 1 -0.777
FER 0.158 0.210 -0.341 -0.093 -0.777 1
Calculated by through Eviews
All the variables are significantly correlated with GDP except inflation and
employed labor force. The variable gross domestic product (GDP) is
negatively correlated with INF and ELF. GCF, agriculture productivity and
fertilizer are positively correlated with gross domestic product (GDP). The
same variables GCF and GCF, AGRI and AGRI, ELF and ELF and fertilizer
are fully depending on each other. The association between GDP and inflation
is negative -0.33 because r < ǀ0.30ǀ. Degree of association between gross
capital formation and employed labor force is 0.46 and correlation is moderate
because ǀ0.30ǀ < r < ǀo.70ǀ. Degree of association between GDP and fertilizer
is 0.15 that shows correlation between them is weak.
14. 505 Abdul Ghafoor Awan, Aroosa Mukhtiar
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4.3 ADF Test:
The results of ADF test are shown in table 3:
Table 3: Results of ADF Test
variable
s
Level 1st difference 2nd difference
Intercep
t
Trend &
intercep
t
Intercep
t
Trend &
intercep
t
Intercep
t
Trend &
intercep
t
Decisio
n
GDP -2.24
0.19*
-2.24
0.44*
-4.46
0.00*
-4.40
0.07*
-7.01
0.00*
-6.82
0.00*
I(1)
INF -2.08
0.25*
-2.03
0.55*
-5.87
0.00*
-5.72
0.00*
-6.08
0.00*
-4.83
0.00*
I(1)
GCF -2.02
0.27*
-2.08
0.52*
-4.81
0.00*
-4.71
0,00*
-4.81
0.00*
-4.71
0.00*
I(1)
AGRI -4.70
0.00*
-4.78
0.00*
-4.76
0.00*
-4.62
0.00*
-5.62
0.00*
-5.44
0.00*
I(0)
ELF -2.64
0.09*
-3.43
0.07*
-3.43
0.02*
-3.96
0.03*
-3.81
0.01
-3.56
0.00*
I(0)
FER -1.66
0.43*
-1.44
0.81*
-3,82
0.03*
-3.81
0.03*
-4.28
0.004*
-3.64
0.58*
I (1)
Calculated by through Eviews
Table 3 show that the stationary and non-stationary of the individual variables.
The stationary of time series data is compulsory for averting spurious
regression analysis because it is impracticable to get good results and making
predicting with a non-stationary series. Augmented Dickey-Fuller test showed
that some variables are stationary at level and other variables are stationary at
1st
difference. This results in indicates that GDP is integrated at 1st
difference
15. Agriculture productivity and Economic growth: A case of Pakistan 506
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and the t-statistic value is-4.46 with 0.002 probability value. The inflation is
also stationary at 1st
difference with the t-statistic value is -5.87 with
probability value is 0.00. The gross capital formation (GCF) is integrated at 1st
difference with the t-statistic value is -4.81 with 0.00 probability value. The
agriculture productivity is stationary at level with the t-statistic value is -4.07
with the probability value is 0.00. The employed labor force (ELF) is
stationary at level where the t-statistics value is -2.64 with the probability
value is 0.09. The fertilizer is stationer at 1st
difference where the T-statistic
value is -3.81 with probability value is 0.03. Time series analysis shows that
all the variables are integrated at different orders thus there is no co-integration
exists among variables and we can use ARDL model.
4.4 Autoregressive Distributed Lag Model:
ARDL approach is used to analyze the agriculture productivity and economic
growth in Pakistan. ARDL bound testing process developed by Pesaran et al
(1996), Pesaran and Ship (1990) and Pesaran et al. (2001) is elastic and it
requires that variables exist in the model specification can be either integrated
at order 0 or 1, that is I (0) or I (1). This model of estimation gives efficient
consequences even for small samples. Variables can be attributed different lag
length in the model. The ARDL equation is as follows:
Yt = β0 + β1Yt-1 + .. + βqYt-p + α0xt + α1xt-1 + α2xt-2 + + αkxt-k + µt (2)
Whereas, unrestricted vector error model is given below.
Δ(GDP)t = α0 +Σp
i=1 α1(GDP)t-i + Σp
i=0 α2(INF)t-i + Σp
i=0 α3(GCF) + Σp
i=0
α4(AGRI) + Σp
i=o α5(ELF)t-1 + α6(GDP)t-1 + α7(INF)t-1 + α8(GCF)t-1 +
α9(AGRI)t-1 + α10(ELF)t-1 + µt (3)
Equation (3) is the ARDL model which indicates the long run and short run
association between the dependent and independent variables. α0 is the
16. 507 Abdul Ghafoor Awan, Aroosa Mukhtiar
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intercept term. Short run co-efficient of variables are α1, α2, α3, α4, α5,
explanatory variables while the long run co-efficient of variables are α6, α7, α8,
α9, α10 whereas, µt is the stochastic error and it contains all omitted variables
in the equation.
4.5 Bound Test:
Bound test for co-integration indicates the long run association
between the variables. The results are shown in Table 4.
Table 4: Results of Bound Test
Test statistics Value Signif. I(0) I(1)
Asymptotic n=1000
F-statistic 12.48 10% 2.08 3
K 5 5% 2.39 3.38
2.5% 2.7 3.73
1% 3.06 4.15
Calculated by Author through Eviews
The above table shows the critical values of the upper and lower-bound I(1)
and I(0) respectively. The observed F-Statistic value is 14.00 that is greater
than the upper-bound of F-Statistics we reject null hypothesis and accept
alternative hypothesis, which describes that there is long run association
among the variables.
17. Agriculture productivity and Economic growth: A case of Pakistan 508
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4.6 Long Run Relationship of ARDL Model
The long run association between the dependent and independent
variables is given in the form of equation.
Δ(GDP)t = ϒ0 + Σp
i=1 ϒ1(GDP)t-i + Σp
i=0 ϒ2(INF)t-i + Σp
i=0 ϒ3(TRD)t-i + Σp
i=0
ϒ4(GCF)t-i + Σp
i=0 ϒ5(AGRI)t-i + Σp
i=0 ϒ6(ELF)t-i + µt (4)
In which ϒ’s is coefficient of the lagged X term. The long run relationship is given in
Table 5:
Table 5 Results of long-run relationship between variables
Author’s calculation through Eviews
Table 5 shows the results of ARDL model which indicate that the co-efficient
value of inflation in the long run is significant. It reflects negative association
with GDP annual growth rate, meaning if one-unit increase in inflation rate
the GDP annual growth rate will likely to fall by 0.42 percent. The co-efficient
value of gross capital formation (GCF) is statistically insignificant and
negatively related to GDP annual growth in the long run. The reason for
insignificant and negative relation in the long run is that the lack of investment
due to the shortage of electricity, therefore, there is the negative affect of GCF
on GDP. The co-efficient value of agriculture in the long run is positive and
statistically significant. The significant share of agriculture increases
economic growth [Alam (2015)]. The coefficient of employed labor force is
18. 509 Abdul Ghafoor Awan, Aroosa Mukhtiar
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statistically insignificant in the long run but it reveals positive association with
GDP annual growth rate. The coefficient value of fertilizer is statistically
significant and has positive relationship with GDP. It means that use of best
quality fertilizer enhances the agriculture productivity.
4.7 Error Correction Model: Short Run Relationship:
This technique is employed to determine the short run association between the
gross domestic product and other independent variables. The short run error
correction equation is given below:
Δ(GDP)t = η0 + Σp
i=1 η1i(GDP)t-i + Σp
i=0 η2i(INF)t-i + Σp
i=0 η3i(TRD)t-i + Σp
i=o η4i(GCF)t-i +
Σp
i=0 η5i(AGRI)i=0 + Σp
i=0 η6i(ELF)t-i + λ(ECM)t-i + µt (6)
(ECMt-i) ECM indicates the short run impact on x and y variables and speed
of adjustment.
ΔYt = η + δt-i + λ(ECMT-I) + µt (7)
In equation δ indicates the short run affect and λ indicates the adjustment
speed. The results of ECM are shown in table 6.
Table 6: Results of ECM (ECM of selected variables (1,0,0,0,1,1)
Author’s calculations through eviews
19. Agriculture productivity and Economic growth: A case of Pakistan 510
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The above table shows that agriculture productivity is the most important
variable in the long run and short-run. The value of ECM co-efficient is -0.66
which is negative and significant. This negative and significant coefficient of
error correction model indicates the presence of long-run causal relationship.
The value of ECM indicates the speed of adjustment from disequilibrium to
equilibrium. The value of adjusted R2 is 0.88 which reveals that there is 88%
variation in GDP (Dependent variable) due to the change in independent
variables. The probability of F-statistic is also statistically significant at 5%
level of significance, which justify that the model is goodness of fit.
4.8 Stability of the Model:
Cumulative sum of recursive residuals (CUSUM) tells about the stability of
the model with respect to short-run and long-run relationship between
variables. The graph of cumulative sum of recursive residuals is given below.
20. 511 Abdul Ghafoor Awan, Aroosa Mukhtiar
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Figure 1: Result of CUSUM of recursive residual
Source: Author’s calculation through Eviews
CUSUM Test takes the time series on horizontal axis and residual along
vertical axis to check the stability of the model. Figure1 shows that CUSUM
is within the range 5% critical lines. This critical boundary is not crossed by
the graph. So, we can conclude that the model is stable and there is no major
gap. This correct specification model accepts the null hypothesis at the 5%
significance level.
5. Findings of the Study:
Key findings of the study are given in the following: -
First of all, we discuss the impact of explanatory variables on economic
growth that is called GDP. The results of ARDL model shows that all the
independent variables include agriculture, employed labor force and fertilizer
21. Agriculture productivity and Economic growth: A case of Pakistan 512
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in the long run as well as in the short-run are significantly and positive related
with the economic growth of Pakistan except inflation and GCF that has
negative effect on economic growth. In the study, the value of R-square shows
Independent variable has significant impact on dependent variable and the
model of the study is goodness of fit.
6. Conclusion:
Pakistan is an agricultural country, so agricultural productivity growth
is vital the economic development in Pakistan. Increased in agricultural
productivity not only fulfills domestic needs but it also creates surplus goods
for exports and earn hard needed foreign exchange. The advancement in
agriculture sector and the better use of land resources are essential for reducing
food scarcity and poverty. The results of our research show the negative affect
of inflation and gross capital formation on economic growth of Pakistan. Due
to high inflation rate and existence of feudalism in our country, majority of
farmers are poor and incapable to purchase quality seeds, advanced
machineries and high quality fertilizer to make effective use of their soil.
Inflation is adversely affecting the agricultural productivity, which ultimately
leads to the negative effect on the economic growth of agro-based country like
Pakistan. Further, GCF is showing the negative affect on the economic growth,
as Pakistan is underdeveloped country. Thus, it is focusing more on the
advancement of industrial sector than agricultural. As more investments are
being made on the formation of infrastructures relating to trade sector,
transport sector and education sector, but small resources have always been
allocated to the projects related to agricultural productivity.
22. 513 Abdul Ghafoor Awan, Aroosa Mukhtiar
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7. Policy Recommendations:
We would like to make the following recommendations: -
Government of Pakistan should discourage the existence of feudalism
and should provide subsidies to the poor farmers that would be helpful
for them to purchase fertilizers, equipment and quality seeds.
Government should make more investment in the infrastructures
relating to agricultural sector that may enhance economic growth.
The government should make investment in the development of dams
to create water reservoirs in order to reduce shortage irrigated water.
Pakistan’s government should increase ELF by improving the quality
of education in agriculture sector and industrial sector also.
The government of Pakistan should invest and use modern technology
to overwhelm the issue of agriculture.
Government should develop and expand irrigation system to deliver
water at tail end.
23. Agriculture productivity and Economic growth: A case of Pakistan 514
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CONTRIBUTION OF AUTHORS AND CONFLICT OF INTEREST
This research work was carried out in collaboration between two authors.
Author 1: Prof. Dr. Abdul Ghafoor Awan is his first Ph.Ds in Economics from
Islamia University of Bahawalpur-Pakistan and second in Business Administration
from University of Sunderland, U.K. He contributed in this research paper by way of
guiding author first about title selection, data analysis and statistical techniques. He
edited and gave final shape to the manuscript. In order to know about his other fields
of research please look at his Web of Science Researcher ID M-9196 2015 or his
profile at Google scholar.
Author 2: Aroosea Mukhtaar is an M.Phil scholar at Department of Economics,
Institute of Southern Punjab. She designed the study, collected and analyzed data.
She wrote first draft of the manuscript under the supervision of author 1.
Both authors read the manuscript carefully and declared no conflict of interest with
any person or institution. She can be reached at her email ID:
aroosazumar110@gmail.com.