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Abstract
While there is no dearth of regression analyses or linear programming models
reviewing the agricultural performance of Pakistan, hardly any study has used a price
endogenous mathematical programming model to simulate the ex ante effects of new
policies on consumers and producers simultaneously. Responding to this need this
paper simulates the crop sector of Pakistan considering price-quantity interrelationships.
In its present form, the model is restricted to the Pakistan Punjab which successfully replicates the observed cropping pattern in the base year (2006). The model assumes an aggregate representative farmer who allocates the resources in such a way that the optimal quantities supplied at market prices are consistent with the farm-gate demands at those prices. The model is then solved by altering the yield and cost parameters from India’s Punjab, to analyze the new market equilibrium that would occur in the crops sector of Pakistan Punjab under a technologically enhanced agricultural system.