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The agriculture sector plays a crucial role in the overall development of the country. The sector shares about 24 percent of the GDP and employs about 44 percent of the workforce in the country. Crops sub-sector is the major contributor towards agriculture, sharing more than 53 percent of the value-added. Wheat, being the staple food of Pakistanis, carries immense importance: it contributes about 12 percent of sector value-added, is sown on about 37 percent of the total cropped area, and shares 80 percent in consumption of food grains, while its share in food grain production is around 70 percent. As primary diet, wheat alone shares about 50 percent of the total calories’ and proteins intake in Pakistan, and contributes about 8 percent of the total fat consumed [FAO (Various Issues]. Consequently, overall dietary well being of our people especially the urban and rural poor is largely dependent on the performance of wheat economy.

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At the inception of Pakistan in 1947, there was practically no plant protection service in the country and economic soundness of plant protection measures was not even realized for a long time. The use of chemicals as preventive measures to reduce losses by insects and diseases was almost non-existent during 1960s. However, the “grow more” pressure rendered the traditional methods insufficient, to control the ever increasing pest problem from 1970s onwards. Consumption of pesticides in Pakistan has increased from 665 metric tonnes (MT) in 1980 (when subsidy was withdrawn) to 69897 MT in 2002. This colossal increase in pesticide consumption has not led necessarily to an increase in the yield of crops, as demonstrated by Poswal and Williamson (1998) and Ahmad and Poswal (2000). This indiscriminate use of pesticides has destroyed the bio-control agents in the agro-ecosystems and the populations of natural enemies of the insects and pests have declined up to 90 percent during the last decade (of the past century) especially, in cotton growing areas of the country [Hasnain (1999)].

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Pakistan's stated policy is to increase basmati rice production through price support measures and liberalization of input markets. The present study assesses the scope for price support policy to achieve growth targets and whether additional assistance is needed from non-price policy measures. The econometric analysis is based on a profit function using farm household survey data from the Punjab. Pakistan for 1995-1996. The results reveal that to achieve production targets, very high support prices are required. Since these price levels may not be feasible, a more appropriate option may involve some inducements to expand paddy area and the area allocated to modern varieties. Copyright © 2001 John Wiley & Sons, Ltd.

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