SUPPLY RESPONSE ANALYSIS OF RICE IN PAKISTAN: NORMALIZED RESTRICTED TRANSLOG PROFIT FUNCTION APPROACH

The study was designed to estimate output supply and inputs demand elasticities of rice crop in Gujranwala, Punjab, Pakistan. Data was collected from 100 respondents using proportional allocation sampling technique. The study utilized normalized restricted translog profit function approach for data analysis. Results indicated that the farmers were price responsive. Rice own price elasticity was 1.873. The output supply elasticity of rice with respect to education, land, fertilizer price and irrigation cost were 0.169, 1.274, -0.873 and -0.953 respectively. Irrigation demand elasticity with respect to education, land, fertilizer price, irrigation cost and output price were 0.144, 1.142, -0.783, -1.842 and 1.780 respectively. Fertilizer demand elasticity with respect to education, land, fertilizer price, irrigation cost and output price were 0.023, 0.792, -1.650, -0.851 and 1.851 respectively. Lastly the elasticity of profit with respect to education, land, fertilizer price, irrigation cost and output price were 0.200, 1.101, -0.832, -1.136 and 1.920 respectively. It is recommended that government should provide consistent electricity with stable rates, so that, they irrigate their fields through electric tube wells and ultimately their cost of irrigation decreases. The study also suggests that government should stabilized fertilizer prices to encourage its application. Furthermore government should raise procurement price of rice to encourage its supply this in turn will also increase profit of the farmers.