FARM SUPPLY RESPONSE TO PRICE: A CASE STUDY OF SUGARCANE IN PAKISTAN (1986 – 2005)

Abstract

Sugar cane is one of the most important agricultural outputs of Pakistan and has been termed as a cash crop by the Economic experts. It is mainly grown for sugar and sugary production. It is an important source of income and employment for the farming community of the country. The growing importance of sugarcane in the economy of Pakistan and the policy implications that could follow changes in relative prices have encouraged the under taking of this study. It is therefore proposed to investigate and observe in this paper how the farmer acreage responds to price change in Pakistan during the period of 1986 – 2005, insofar as sugarcane cultivation is concerned. The main objective of this study is to present and analyze the price elasticity of sugarcane acreage in Pakistan. This study aims to find the acreage response of farmers to price changes in order to make it comparable with standard analysis.