IMPACT OF FERTILIZER PRICE, FERTILIZER SUBSIDES AND FERTILIZERS USAGE ON AGRICULTURE PRODUCTIVITY OF PAKISTAN “AN EMPIRICAL ANALYSIS OF PAKISTAN FERTILIZER SECTOR FROM 1990 TO 2023”

Abstract

Agriculture is one of the most important sectors of many developing countries like Pakistan and fertilizers are the most essential input, contributing towards achieving increased farm productivity. Rising fertilizer costs coupled with alteration of subsidy and consumption that directly affecting agricultural output to economic resilience of this sector. The increase in the prices of fertilizer, fertilizer subsidy and fertilizer use has been one of the most important challenges which neither only on this part badly influence upon the agriculture productivity of Pakistan but also on the farmers too in Pakistan.

Using secondary data from 1990 to 2023, the study assesses the relationships of fertilizer prices, subsidies and consumption with various agricultural outcomes through the application of regression analysis and correlation analysis. The results indicate strong negative impact of fertilizer price on crop yield and positive effect of fertilizer subsidy and consumption on crop yield and cost of production. It also adds that a fall in production costs from fertilizer subsidies results in cheaper agriculture.

The debate highlights the need for more discriminating handouts and price controls and targeted use to lift food production. The research shedding light on existing need of price stability emphasized more on the requirement of policy intervention of making the prices of fertilizer stable and providing affordable access to fertilizers that can help enhancing the sustainability of agriculture and food security in Pakistan.