Time Series Analysis of the Impact of Rising Prices of Inorganic Fertilizers on Field Crops Production: A Case Study of Pakistan

Abstract

In this study, we have analyzed the impact of rising prices of inorganic fertilizers on field crops production in Pakistan by using time series 1986 to 2012. Ordinary Least Square method was used to investigate model parameters. The empirical results showed that when price of fertilizer such as Urea, DAP, SSP and SOP increase 1 percent, production of Sugarcane,  Maize and Rice  were decrease at 91.146,1.943 and 4.443 tonnes respectively. The prices of major fertilizer products during the last five years are increasing. Now, as price increasing, the less used of fertilizers. Therefore, the agricultural productivity is low due to low use of inputs. The main increase was in the DAP price due to a high price on the international market. Now prices of major fertilizers, are Urea, 1700 DAP 4000, NP 2600, and SOP 3700, SSP 1200 per 50Kg bag respectively. Therefore, our study suggest that Government of Pakistan should support small farmers through credit schemes on affordable interest rate and subsidize on agricultural inputs such as fertilizers, seeds and pesticide. It will help in raising farm productivity.

Keywords: Agriculture, Price of Fertilizers, Crop production