Supply Response Analysis of Wheat Growers in District Peshawar: Pakistan.

Abstract

This study was conducted in district Peshawar of Khyber Pukhtunkhwa province, Pakistan. For this purpose 100 respondents were randomly selected from two villages namely Regi and Lakaray Kaneza using proportional allocation sampling technique. The main objective of the study was to analyze the supply response of wheat growers in the study area using Normalized Restricted Translog Profit Function. OLS analytical technique was used to analyze data using SPSS software. The results revealed that the farmers in the study area were price responsive. The own price elasticity of wheat was 1.660. The output supply elasticities with respect to wage rate, fertilizer price, land and education were -0.894, -0.741, 1.932 and 0.053 respectively. Labour demand elasticities with respect to wheat price, wage rate, fertilizer price, land and education were 2.613, -1.755, -0.694, 1.644 and 0.123 respectively. Fertilizer demand elasiticities with respect to wheat price, wage rate, fertilizer price, land and education were 2.599, -0.832, -0.816, 1.258 and 0.270 respectively. Finally the elasticities of profit with respect to wheat price, wage rate, fertilizer price, land and education were 2.685, -0.919, -0.766, 1.549 and 0.036 respectively. The study suggests that the government should subsidize fertilizer prices to encourage its application. Increase fertilizer application will not only increase output but also encourage on-farm employment. The study also suggests that the government should raise procurement price of wheat to encourage its supply, this in turn will increase labour demand (on-farm employment) and profit of the farmers. However, the consumers should also be taken of care in this regard.