Investigate the Impact of Energy Costs on Agricultural Production in Pakistan

Sajid Ali, Khalid Mahmood Mughal and Durdana Qaiser Gillani

Journal of Economic Impact, 2025, vol. 7, issue 1, 86-93

Abstract: Pakistan, like many other emerging countries, is regarded as one of the most hit by food insecurity, poverty, and natural catastrophes. Approximately two-thirds of Pakistan's population live in rural regions and are directly or indirectly dependent on the agricultural industry for food and income. Furthermore, Pakistan's inadequate adaptive capacity to manage environmental calamities has a harmful impact on agricultural output (AgGDP) and local food security. Therefore, this study inspects the effect of energy cost on agricultural production in the case of Pakistan. To achieve the above objectives, this study used the data from 1973 to 2022 in the case of Pakistan, which was collected from World Development Indicators (WDI) and the Economic Survey of Pakistan, and employed ARDL and other diagnostic tests to estimate the model. This study found that the agricultural land, machinery, labor force participation, petrol/oil, gas, and electricity consumption in the agricultural sector, and water availability have a positive effect on AgGDP. This study concluded that energy cost has an encouraging effect on agricultural productivity. This study recommended that the government should have tight governance, subsidy reforms, farm sector changes, a shift from non-renewable to renewable energy, and monetary policy free of political interference.

Keywords: Agricultural production; Agricultural land; Machinery; Energy cost; Consumption; ARDL; Pakistan (search for similar items in EconPapers)
Date: 2025
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