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Determinants of Farm Revenue in Pakistan

Author

Listed:
  • Gustavo Anriquez

    (FAO, Rome.)

  • Alberto Valdes

    (Santiago, Chile.)

Abstract

Will small farm viability decline with the reduction of average farm size in Pakistan? This paper addresses the determinants of rural household and farm-related income. Using the 2001 PIDE Household Survey, the approach developed captures the potential interactions between farm returns and household, farm, and factor market characteristics (schooling, family size, land tenure and operational size, access to water, credit, and capital). Econometric results show: (a) returns to additional schooling and the revenue elasticity of operated acres increase with farm size; (b) medium and large farm renters would be willing to pay more than observed rents, implying an incentive to increase farm size at the prevailing rental values; (c) owner-operated farms, landowners who also leases in, and fixed rental tenants earn higher revenues than sharecropping tenants. The difference, however, between landowner/fix-renter income and sharecropper income varies with family and farm size, as well as water use. While these results favour farm size increase, the results also show that off-farm and non-farm income sources are relatively more important for small farmers, contributing to their viability.

Suggested Citation

  • Gustavo Anriquez & Alberto Valdes, 2006. "Determinants of Farm Revenue in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 45(2), pages 281-301.
    • Handle: RePEc:pid:journl:v:45:y:2006:i:2:p:281-301
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    File URL: http://www.pide.org.pk/pdf/PDR/2006/Volume2/281-301.pdf
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    References listed on IDEAS

    as
    1. Paul Dorosh & Muhammad Khan Niazi & Hina Nazli, 2003. "Distributional Impacts of Agricultural Growth in Pakistan: A Multiplier Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 42(3), pages 249-275.
    2. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, vol. 55(1), pages 43-68, January.
    3. Khandker, Shahidur R. & Faruqee, Rashid R., 2003. "The impact of farm credit in Pakistan," Agricultural Economics, Blackwell, vol. 28(3), pages 197-213, May.
    4. Hansen, Bruce E., 1992. "Testing for parameter instability in linear models," Journal of Policy Modeling, Elsevier, vol. 14(4), pages 517-533, August.
    5. Ramón López & Alberto Valdés (ed.), 2000. "Rural Poverty in Latin America," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-333-97779-8, December.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Khan, Muhammad Fawad & Nakano, Yuko & Kurosaki, Takashi, 2019. "Impact of contract farming on land productivity and income of maize and potato growers in Pakistan," Food Policy, Elsevier, vol. 85(C), pages 28-39.
    2. Rammohan, Anu & Pritchard, Bill, 2014. "The Role of Landholding as a Determinant of Food and Nutrition Insecurity in Rural Myanmar," World Development, Elsevier, vol. 64(C), pages 597-608.
    3. Frederick Quaye, 2016. "Effects of Multiple Risks on Farm Income and Willingness to Pay for Agricultural Insurance: A Case Study of the Greater Accra Region in Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(6), pages 1-1, June.

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    More about this item

    Keywords

    Pakistan; Land Markets; Rural Factor Markets; Revenue Function;
    All these keywords.

    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment

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