DOMESTIC SUPPORT UNDER WTO REGIME AND ITS IMPACT ON AGRICULTURAL PRODUCTION OF THE PUNJAB, PAKISTAN

Hammad Badar and Qamar Mohy-Ud-Djn*

Pakistan Journal of Applied Economics, 2009, vol. 19, issue 1, 35-58

Abstract: The paper attempts to analyse the position of Pakistan, the province of Punjab, with respect to domestic support reduction commitments and to study its impact on the agricultural production of the Punjab. According to the findings of the study, Pakistan at present is in full conformity with the WTO regime on agriculture with a negative Aggregate Measurement of Support (AMS) value. The estimates of AMS for the Punjab depict the same trend. The estimated Cobb-Douglas type of agricultural production model for the Punjab established that the cropped area, agricultural labour, distribution of seed, budgetary expenditure on agricultural research and extension, land reclamation, and wheat price support contributed positively towards agricultural production, whereas the contribution of fertilser and expenditure on food trading services was found to be negative. The study suggests that Pakistan should explore and extend permissible Green Box support for agricultural and rural development of the country besides utilising the available cushion for support due to negative AMS value and de minimus criteria.

Date: 2009
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