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Labour supply is a key element in socio-economic development,
and although the size, growth and composition of population have a
strong bearing on its supply in an economy, the actual labour supply is
a function of the labour force participation rate defined as the ratio
of the population engaged in or seeking gainful employment to the
working-age population. In Pakistan gainful employment means not only
work for pay or profit but also unpaid help from family members, and the
working-age population refers to the group of those aged 10 years or
more. Although the use of labour force for computing participation rates
has been criticised on the ground that it lays undue emphasis on market
activities which have little relevance tb the less developed countries,
particularly to the rural sector, (Standing 1978), it is nonetheless
useful in studying household decisions regarding allocation of available
time between productive and non-productive activities (Rees 1973). It is
basically this division of labour between productive and non-productive
activities that sheds light on the degree of development of an economy
and, therefore, on the organization of factors of production (Yotopoulos
1986). The significance of rural participation rates, especially those
of females, is noteworthy in this regard as there is a positive
association between female productive work and the level of development
achieved (Denti 1968). Female participation rates are also important for
a proper understanding of the productive and reproductive roles of the
population. As more than 70 percent of rural population depends on
agriculture for its livelihood and rural females are nearly half of the
total, their participation rates may be of critical importance in
determining the rates of saving, investment and productivity in
agriculture. It may also be noted that availability of labour in
agriculture is also a function of the ready availability of female
labour, especially for such operations as are performed exclusively by
females, e.g. cotton picking.

Land reforms have often been viewed as a significant variable
in the economic development of pre-industrial societies [10], The
economic rationale for reform is frequently given as an increase in
agricultural output through improvements in resource use efficiency and
cultivator incentives. But other goals are typically posited as well. An
official publication of the Ministry of Food, Agriculture, and Rural
Development of Pakistan stated that the 1972 reforms "affect the life
and fortunes of the common man much more significantly than any other
measure contemplated by the government." Among the specific objectives
mentioned for the reforms were "breaking up iniquitous concentration of
landed wealth, reducing income disparities, increasing pro¬duction, and
re-ordering the tenant landlord relationship on the basis of mutual
respect and trust" as well as "increasing employment" and generally
providing for the "socio-economic uplift of rural masses" [31, pp.5-6].
Our study is an evaluation of the 1972 measures in the context of these
objectives.

In an earlier study [1, pp.407-415] it was assumed that a
linear production function would be the best to depict the relationship
between wheat production and explanatory variables in the Punjab. After
a careful scrutiny, four of the explanatory variables, viz., area under
Mexican Wheat varieties, area under local wheat, fertilizer application
and rainfall, were employed to explain varia¬tions in wheat production.
As this linear relationship gave a good fit, it was claimed that the
equations, derived from 1967-68 to 1971-72 output and input data, can be
useful in forecasting wheat production in the Punjab for future years
well in advance of actual wheat harvests and, in fact, a forecast of
wheat production in the Punjab for 1973-74 was published [2, pp.
106-112], based on the findings of that model. Whether the linear
production function related the dependent and inde¬pendent variables in
the best possible manner was not tested. The results of our analysis in
the present paper indicated that the re-specification of the
rela¬tionship will be of little use.1 In addition, in an earlier model
the rainfall relevant to wheat production was defined as the total
rainfall during the months of November-January of each wheat season.
Publication of the article con¬taining that model elicited suggestions
that use of seven-month rainfall from July to January (instead of
three-month rainfall used in the model) might improve the results of the
model. Accordingly, it was decided to test that model using

The main objective of this paper has been to review Pakistan's
historical experience in agricultural development in terms of growth,
income distribution, and rural poverty. While the long-term growth rates
between 1949-50 and 1994-95 were satisfactory, the variations around the
average have been rather too large over the various decades. Beginning
with a stagnating sector of the 1950s, agriculture witnessed record
growth rates during the Sixties. This was followed by the lowest growth
rates of the early Seventies, and acceleration in the second half of the
Seventies. The experience since 1979-80 has been mixed, but the growth
rates have been rather low through the Eighties and the Nineties. The
trends in income distribution and poverty varied directly in relation to
the agricultural growth rates, especially when they were in excess of
the threshold level of 4.5–5.0 percent per annum. In general, a growth
rate of 5.0 percent or higher has induced positive changes in income
distribution and poverty. In view of this positive association, the
pursuit of a high growth policy in agriculture should guide Pakistan's
future development strategy. The efficiency of resource use, a greater
dependence on modern technologies, and a minimisation of government
intervention in the market mechanism are the essential pillars of the
high growth strategy.

Trends in rural employment and wages are important in a number
of ways. For example, a steady growth of job opportunities is a
precondition for productive employment of labour force under rapid
growth of population. Rising real wages of the working class would be
essential for incessant improvements ih the standard of living of the
masses. Lack of sufficient employment opportunities in rural areas
together with the consequent stagnating (even declining) wages may be a
potential cause of mass movement of rural labour to urban areas and
attendant formidable economy-wide problems. Similarly, aggregate growth
rates of employment and wages in contrast with those in productive
sectors have an important bearing on trends in income distribution and
poverty. Rapid growth of population, predominance of rural sector and a
general lack of studies on rural labour market conditions in less
developed countries, including Pakistan, call for a study such as the
present one, which explores the trends of rural employment and wages in
Pakistan. The paper carries four sections. Section 1 surveys the present
state of the rural labour market. Section 2 reports trends in rural
employment and discusses the various factors underlying those trends.
Employment situation being the basic determinant, wage trends,
especially those in agriculture, are highlighted in Section 3. Section 4
summarises the findings of the study and in their light makes some
policy recommendations.

It has been argued in the literature that. capital formation
is the key to economic development. Apart from expansion in productive
capacity, capital formation is also a source of embodied technical
change and progressive modernization. Although aid could be a source of
capital formation, it is undependable and inconsistent with the phrase
that capital is made at home [Nurkse (1953)]. Agriculture, being a
sector of major proportions in developing countries holds a pivotal
position as a major contributor to capital formation. In the early
stages of economic deVelopment, it must fund industrialization, finance
capital imports and act as a ready market for industrial goods. It may,
however, be remembered that agricUlture can play this role only within
certain limits and that excessive resource transfers from agricUlture
can prove to be self-defeating and must be avoided [Timmer (1988)]. What
has been the role of Pakistan's agriculture in this respect, is a
controversial issue. There are studies [Hamid (1970); Khan (1985) and
Qureshi (1987)] that hold that agriculture's role in capital formation
in Pakistan has, at best, been dismal. Others [Chaudhry (1973);
Government of Pakistan (1986, 1988)] have argued that agriculture in
Pakistan was heavily taxed and made significant contributions to
economic de,:elopment. The controversy arises as the former set of
studies dealt with direct taxes alone as against the coverage of local
and indirect taxes and taxes implicit in price and exchange rate
policies in the latter.

The purpose of the present paper has been to quantify and
discuss the implications of implicit taxes in Pakistan's agriculture.
The methodology of the paper consisted of derming the impon and expon
parity prices of major agricultural commodities grown in Pakistan, by
comparing them with domestic procurement prices. Although the analysis
covered only four commodities, implicit tax rates in some of the years
from 1970-71 to 1989-90 were as high as 75 percent for cenain
commodities. It was only in the case of IRRI rice and sugarcane that
domestic prices were above the world levels in some years of the period
under consideration. When shown as a percentage of the value-added by
agriculture, the taxes on these four commodities, net of the total
budgetary subsidies on agricultural inputs, varied from 1.9 percent to
14.9 percent. These tax rates in agriculture compared favourably with
the overall tax rates in Pakistan's economy for most of the years.
Judged in the light of the relative taxable capacities of agriculture
and Pakistan's economy as a whole, implicit taxes were much higher in
agriculture than in the other sectors of the economy.

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One of the major constraints to an increase in Pakistan's
agricultural production is low fertilizer input. Despite spectacular
growth of fertilizer con¬sumption during the '60s the rate of fertilizer
application in Pakistan remains below the optimal rate [8, pp.77-90]
and far below the rates in advanced countries [15, p. 24]. An upward
movement of the rate of fertilizer applica¬tion, essential to avoid
recurring loss of agricultural production, entails ap¬propriate policy
measures over a long time-horizon. Appropriate policy guidance may well
be derived from the experience of the '60s. It is believed that low
fertilizer prices, among other factors, contributed enormously to the
growth in fertilizer consumption [9, pp.419-25]. Towards the end of the
'60s, however, the fertilizer prices increased causing a decline of per
acre and total fertilizer consumption [15, p. 24]. As fertilizer is a
critical input, reduced consumption is translated into reduced
agricultural output, higher prices of agricultural commodities or both.

The purpose of this paper is to provide estimates of the
changes in the cost of living for rural labourers during the period
1966/67 to 1973. It is well known that throughout this period, and
particularly in the recent years, prices have been rising. The Central
Statistical Office (CSO) publishes consumer price indices for urban
workers, but no index for rural workers is available. Thus, it is not
known whether inflation has affected rural and urban workers uniformly.
If changes in the cost of living have been different, then separate
price indexes must be used in estimating the real income levels of the
two groups. As development policies in Pakistan are increasingly aimed
at alleviating poverty in the rural sector, the need for a separate
price index applicable to rural labourers becomes obvious.

In an earlier article [1, pp.407-15] the authors developed a
statistical model for forecasting wheat production. Among the equations
developed, it was found out that equation (2.2) for irrigated districts
and equation (3.2) for barani districts could be useful in forecasting
wheat production in the Punjab. While the forecasting procedure was
elaborated in detail, it was not possible to forecast wheat production
for 1973-74 because data on the explana¬tory variables underlying the
model were not then available. As these are now available, this paper is
an attempt to forecast wheat production for 1973-74. For comparison, the
paper also includes a forecast for 1972-73 based on the model. Before
discussing the forecast itself, however, a brief review of the
underlying equations and data used in the study would be
desirable.

The purpose of the study is to explore the possibility of
developing an econometric model which would help in explaining and
predicting changes in wheat production in the Punjab. Wheat is a major
crop in the province occupy¬ing nearly 40 per cent of the total
cultivated area and about 2/3 of the area under Rabi crops. It is by far
the most important food crop providing nearly 2/3 of the total calorie
intake. Accurate forecasting of wheat production is critical for
planning process. Wheat production in the province increased from 27.2
lakh tons in 1949-50 to 56 lakh tons in 1972-73 or 106 per cent. The
increase in production was achieved largely by the increase in wheat
area which rose from 59.1 lakh acres in 1949-50 to 107.9 lakh acres in
1972-73 or nearly 83 per cent. About 80 per cent of the wheat acreage is
irrigated and only 20 per cent is grown in the Barani land. The yield
per acre which was 12.38 maunds in 1949-50 declined to only 9.17 maunds
in 1959-60 but increased sharply to 14.14 maund in 1972-73.

It follows from the experience of World economies that rising
and balanced use of fertilisers is the key factor in agricultural
productivity [FAO (1995); SFS and STI (1996); Habib-ur-Rehman (1982) and
Pinstrup-Anderson (1976)]. In the case of Pakistan the stepped up
fertiliser use has been argued to be incritable to realise existing
untapped yield potential of major crops [Johnston and Kilby (1975)] and
to induce yield increasing technological change in future [John Mellor
Associates and Asianics Agro-Dev. International (1993)]. Although proper
malnutrition involves the use of primary, secondary and micro-nutrients,
Nitrogen (N), Phosphorus and Potassium (K) or NPK is generally
considered to be sufficient to harvest normal crop yields [FAO and IFA
(1999)]. Given this situation, this paper looks at various factors that
determine fertiliser use in Pakistan. Although price of fertiliser is a
critical factor in this respect [Schultz (1965) and Johnston and Cownie
(1969)], only non-price factors are considered in this paper due to
limitations of data. Apart from this introductory section, the paper
comprises of three more sections. The following Section 2 explains the
data and the empirical model. Section 3 presents the results. Section 4
summarises the main findings along with their policy
implications.

Agriculture is the backbone and single largest sector of
Pakistan's economy as its contribution to Gross Domestic Product (GDP)
exceeded 25.3 percent during 1997-98. Crops, livestock, fishing and
forestry sub-sectors being its main components, only crop and livestock
sub-sectors are of critical importance. They accounted for 59.6 and 36.2
percent of the sector's output respectively. Because of the ongoing
process of structural transformation, agriculture's share in the
national economy is shrinking. From 39 percent of GDP in 1969-70 it has
fallen to its current levels [Pakistan (1999a)]. The livestock
sub-sector however has not followed suit. It has risen from 27.3 percent
in 1969-70 to 36.2 percent in 1997-98. This trend in fact would be more
pronounced if the national accounts did not underestimate the
sub-sector's components such as farm yard manure, dung cakes for
household fuels and animal draft power.