FORECASTING THE DOMESTIC CONSUMPTION AND
SUPPLY OF FOOD CROPS IN PAKISTAN (2018-2025).

Abstract

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

Pakistan
is such a country whose economy mostly depends on agriculture sector since 1947.
Wheat, rice and maize are the major foods crops that are commonly used in all
over the country. The purpose of study is to design forecasting models of demand
and supply of food crops like wheat, rice and maize in Pakistan. This topic is
first time choose for research purpose to forecast the demand and supply of food
crops at Pakistan while  a work on
forecasting the demand and supply of wheat and onion crops in the province of
Punjab, Pakistan. A time series data of food crops regarding demand and supply
was obtained from 1976 to 2017. According to the nature of data, ARIMA and
exponential smoothing models to forecast the demand and supply of food crops
like wheat, rice and maize in Pakistan for next 8 years. To obtained a best
fitted model by comparing the results of all models keeping in view minimum
residuals. Forecast models will help the policy makers in future planning of
food security matters in all over the country.

 

INTRODUCTION

The
most important issue of the underdeveloped countries is to build a rapid
economic growth. Pakistan represent himself in the world as an agriculture
country whose GDP mostly depends on agriculture sector. Exports of any country
play an important role in its GDP. Pakistan can achieved the goal of GDP by
exports of its agriculture items. Pakistan has gifted a prosperous and enormous
natural resources by Almighty Allah base covering different ecological and
climate zones that provides ground for economic activities throughout the
country. The agriculture sector has been remained to be primal sector of country
economy since 1947. Its contribution to national GDP for the year 2016-17 was
19.53% (Economic Survey of Pakistan 2016-17). Agriculture sector creates useful
employment opportunities for 43.5 percent of the country’s labor force. 60
percent population extracts their livelihood directly or indirectly from
agriculture sector in rural areas. Increase in production of agriculture sector
and very high yield of agricultural crops is fundamental for food protection
(Pakistan Economic Survey, 2016-17). Agriculture sector has traditionally
sustained a satisfactory growth to ensure food security for our growing
population (Pakistan Economic Survey, 2016-17). It is very important to produce
farming more successful in sustaining high economic growth and decreasing poverty
level in Pakistan. A strong strategy structure is needed with favorable
political environment, satisfactory supremacy and strong Macro-Economic basics.
Agriculture sector plays a dynamic role in guaranteeing food security, creating
overall economic growth, decreasing poverty and converting raw materials towards
industrialization. Agriculture, being a dominant sector of economy every
government always tries to make the agriculture sector a well-organized,
productive and linkage with commerce sector to improve the life style of people
and expel hunger and malnutrition from the country. Agriculture sector is
backbone of Pakistan’s economy. However, Pakistan’s exports system is not much
efficient that could utilize full potential of exports agriculture goods to
contribute in gross domestic product (GDP) of Pakistan.

Sufficient
food productions, food availability and livelihood to the people which are
directly engaged in this sector are the main target of agriculture sector. It
is necessary to modernize the agriculture sector in Pakistan in order to make
ensure its contribution in the progress of living standard of the people and
for the achievement of macroeconomic goals like prosperity and welfare.

The
increase in population requires that the growth in agriculture should be enough
so that it fulfills the required demand of food items. Due to change in per
capita income as well as consumption pattern, people required the diet which
has more proteins. The modernization of agriculture sector is based on the
availability of inputs like balanced use of fertilizers, certified seeds,
mechanization, opportunities of investment in agricultural research and
agricultural credit.

Agriculture
sector plays a significant role for industrial development. Agriculture sector
also provides raw material to the industries of Pakistan, particularly textile
industry, the largest industrial sub-sector of economy such as food products,
sugar, rugs and carpets,
leather and foot ware etc. Pakistan has a semi-industrialized economy with a
well-integrated agriculture sector.

The
requisite supply of food crops like wheat, rice and maize can be increased by
bringing more area under cultivation or by increasing yield per unit area of
food crops. As the matter of fact, it is not possible to increase the area
under cultivation due to increase in occupation of fertile land by expanding
the cities and industries.  Therefore
only alternate left for increasing supply is through higher yield per unit
area. As the result of low yield of crops, the demand for crops has always
remained higher than its production, with the result that we have to import
crops to face the needs and requisite
of the people.

It
is agriculture sector which responsible for making the availability of food in
the country. The race between increasing population and mankind’s food supply
is real and grim. Any country seeking overall economic development needs
development in agriculture sector. So there is a need to check the world food
crops supply in addition to the burgeoning population to meet an increase in
food crops demand of the world much faster agriculture development will be
required. Wheat: Population growth rate of country is stable for last
few years. But increase in population day by day against the constant land
utilization of food crops. From last few years the production of wheat crop
increased i.e. supply of wheat grains is more than its domestic
consumption.  A surplus quantity of wheat
stored in the country. Pakistan is at 8th position in production of
wheat all over the world. At that time wheat price in international market is
less than Pakistan. Cost of Production of wheat crop in Pakistan is more than
other countries. Government has been giving subsidy on fertilizers from last
three years. Government giving subsidies on wheat to famers that is extra
burden on government finance. 

Rice:

Rice
is another food crop as well as cash crop that is cultivating in Pakistan and
plays important role in the economy of country.  Pakistan is the world’s 4th largest producer of rice. In Pakistan’s agriculture economy rice is like a
financial backbone for formers and plays multifarious roles. Firstly, it is
second staple food in the country and contributes more than 2 million tonnes of
national food requirement. Secondly, rice industry is an important source of
employment and income for rural area workers. Thirdly, country earns Billion
rupees due to rice as export item.

Pakistan export highly level quality of rice like basmati. From
last decade’s introduce new varieties of rice, use of pesticide and modern
technology average yield of rice crop increase. A surplus quantity of rice
stored in country.

Maize:

                        Maize
is another food and cash crop in Pakistan. It is the 4th largest
food crop in Pakistan. Maize crop is serving feed as well as silage for animals
and highly yielding cereal crop globally. It is sown in two seasons i.e. spring
and autumn. . Maize has a variety of
uses. Its grain is a rich source of starch 72%, vitamins A & B 3 – 5%,
proteins 10%, 4.8% oil, 5.8 % fiber, 3.0% sugar and 1.7% ash. One Hundred gram
of fresh grain contains 361 calories of energy, 9.4g protein; 4.3g fat, 74.4g
carbohydrate, 1.8g fiber, 1.3g ash, 10.6 per cent water, 140mg vitamins, 9mg calcium,
290mg, phosphorus and 2.5mg iron. It is a source of raw material for industry,
where it is being extensively used for the preparation of corn starch, corn
oil, dextrose, corn syrup, corn flakes, cosmetics, wax, alcohol and tanning
material for leather industry. Ethanol obtained from maize can be used as a
biomass fuel. Stigmas from female corn flowers, known as corn silk, can be used
as herbal supplements. Maize can be used as forage, feed for livestock and
making silage after fermentation of corn stocks. Maize is used extensively as
the main source of calories in animal feeding and feed formulation. Maize gives
the highest conversion of dry substance to meat, milk and eggs compared to
other cereal grains. Maize is a valuable feed grain, because it is among the
highest in net energy content and lowest in protein and fiber content. Animals
like and eat it readily.

 

No
comprehension study on the subject has been conducting in Pakistan. A few
students with the reasonable topic directly and indirectly are however
summarized below. Some studies motivated me in literature to conduct such a
study like Bukhash (2012) forecasted the demand and supply of onion Punjab
(Pakistan) by Autoregressive Integrated Moving Average (ARIMA) model. Tahir and
Sabir (2012) developed Exponential Smoothing Average Model to forecast the
supply and demand projection of wheat Punjab (Pakistan).

 

 

Objectives:

The
specific objectives of the study are;

1.     To
overview the food crops like wheat, rice and maize economy of Pakistan.

2.     To
develop forecasting model for production of food crops like wheat, rice and
maize in Pakistan.

3.     To
forecast the production of wheat, rice and maize in Pakistan for the 2018, 2020
and 2025 periods.

4.     Suggestions
to policy makers and planners with respect to storage, procurement of food
crops and pricing etc. in the country.

5.     Best
fitted model.

 

 

 

REVIEW OF LITERATURE

 

 Adil et
al. (2012) forecasted the demand and supply of onion at Punjab (Pakistan).

They worked on
prediction of future regarding onion area, production and consumption in
Punjab, Pakistan. A time series data was collected from 2008-09 about the area,
demand and supply of onion at Punjab Pakistan. ARIMA model was used for
obtaining such estimates. Keeping in view the future demand and supply of onion
  for up-to the year 2025 was estimated. The
reliable estimated figures of ARIMA models were checked by comparing actual
figures and estimated figures for the year 2008-09. After forecasting the
results our estimated values are better with small size of standard errors. Research
helps the policy maker’s for future planning to avoid any shortage or excess of
onion in market and stable the price of onion.

Tahir and Sabir
(2012) developed Exponential Smoothing Average Model to forecast the supply and
demand projection of wheat Punjab (Pakistan).The present study was designed for
estimation of future projections regarding Population, wheat area, it supply
and demand in Punjab, Pakistan. A time series data regarding Punjab population,
Area of wheat, supply and its consumption were collected at Punjab level. The
exponential smoothing model was employed for obtaining such forecasts. Consumption
and production gap of wheat was also estimated for up-to the year 2011-12. Estimate
value for the year 2011-12 was shown a surplus of wheat grains in the province.

Iqbal. N et al. (2005)
investigated the study of wheat production in Pakistan. The study of wheat
production determines the forecasting of wheat production in Pakistan up to the
year 2022. They employed the time series techniques which is ARIMA model.
Considering variable is wheat production. The ARIMA models shown that
production of wheat would be 29774.8 Thousands tons in 2022. The possibility of
area require for wheat crop remain approximately same and for  higher production is accessibly only through
inputs such as  giving awareness and
guidance to farmers about  modern
cultivation technologies and appropriate use of fertilizers and control of
weedicides.

Maqsood
(2010) conducted an empirical study to check the past trend and future
prospects of area and production of potato and onion in Punjab, Pakistan using
the time series secondary data from 1971-72 to 2007-08. To estimate past tend
in area and production of potato and onion the Log-Lin. model was applied while
autoregressive integrated moving average (ARIMA) model was developed to
forecast the area and production of potato and onion for the next eighteen
years from 2008-09 to 2025-26.

Tahir
and Habib (2013) conducted the trend analysis for area and production of maize
in Pakistan and used four models (Linear trend model, Quadratic trend model,
Exponential trend model and S-Curve model) to find the forecasts by the
interaction of time series data from 1990-2011. The results revealed positive
increasing trend in future maize production in the country due to introducing
new hybrid varieties modern technology and balanced use of fertilizers.

Dasyam
et al.(2015) worked on modeling and forecasting the production/yield of wheat
in India form 1961-2013 by comparing different models (parametric regression,
exponential smoothing and ARIMA) to observed the trend of wheat production.
They found best model ARIMA(1,1,0) on basis of several goodness of fit
criteria( Root Mean Squared Error, Mean Absolute Percentage Error, Mean
Absolute Error, Mean Squared Error, Akaike Information Criterion, Schwarz’s
Bayesian Information Criterion and R-Squared). Forecasted value 100.71 Million
tons for 2017-18. They also examined independent and normality assumption
through Run-Test and Shapiro-Wilk Test respectively.

Ali
and Jabbar (2015) investigated growth and variation in area, yield and
production of fruit crops (Apple , Peach, Pear and Plum) in Khyber Pakhtunkhwa
province based on data from 1975-76 to 2011-12, which is further split into
three periods; period-I (1975-76 to 1990-1991), period-II( 1991-1992 to 2011-12)
and period-III(1975-76 to 2011-12). For availability analysis Cuddy-Della Valle
Index has been used and find out as a foremost contribution of apple, pear and
plum is low than peach during period –I. in period-II as compare to period-I
more variability in fruit production. In period-I, area and yield of both
fruits cause of variability in fruit production.

Ahmad
et at. (2017) worked on area, production and yield of major crops like wise
wheat, rice, cotton, ,maize and sugar-cane at country level. A time series data
from 1947-48 to 2013-14 about area, production and yield were collected. ARIMA
model was employed to forecast the value from 2014-15 to 2034-35. All crops
shown an increase trend in production and average yield except sugar-cane due
to use of modern technology.

Sajid
et al. (2013) worked on cash crops like wise cotton and sugar-cane crops of
Pakistan. A time series data was collected from 1948 to 2012.They employed ARMA
and ARIMA models. ARMA and ARIMA models were used forecast the productions and
yields of cotton and sugar-cane crops from 18 years starting from 2013 to 2030.
ARMA(1,4), ARMA(1,1) and ARMA(0,4) were employed for sugar-cane
production,  yield and cotton production
respectively. To obtained forecast value of cotton yield , ARIMA (2,1,1) was
used.

Celik.S
(2016) study was the annual production of cereal (wheat, barley and maize) in
Turkey. A time series data about cereal (wheat, barley and maize) was carried
out from 1965 to 2015. He employed the Holt, Brown and Damped Trend exponential
smoothing methods to forecast the production of cereal (wheat, barley and
maize) from 2016 to 2025. An increasing trend of cereal productions indicated
in future.

 

MATERIALS
AND METHODS:

The
present study on “Forecasting the Production of Food Crops like Wheat, Rice and
Maize in Pakistan: (A Time Series Analysis)”. Time series data over the years
1960-61 to 2010-11 will be collected from various publications of government of
Pakistan. Additional information will be collected by visiting various
government offices engage in the activity of data collection and compiling.

 

The
basic steps in the procedure of our study can be narrated below:

1.     The
Autoregressive Integrated Moving Average (ARIMA) model will be developed to
forecast the production of each crop wheat, rice and maize of Pakistan using
the time series data.

2.     Computer
software i.e. R, Minitab, SPSS and E.View will use to estimate the ARIMA model.

3.     The Box-Jenkins Approach.

The
future values of production of wheat, rice and maize will obtain by estimating
a separate Autoregressive Integrated Moving Average (ARIMA) model. Dynamic
forecasts for the required forecasting period are then made using this model.
This exercise will perform for each crop wheat, rice and maize separately using
the time series data from 1960-61 to 2010-11.

For
evaluating the ability of the model in forecasting the production of wheat,
rice and maize the entire analysis will conduct using the time period 1960-61
to 2008-09 and making forecasts for the years 2009-10 and 2010-11 to compare
with actual values of production of wheat, rice and maize to asses the quality
of forecasts. On the basis of this model, it will make the forecasts the
production of wheat, rice and maize in Pakistan for the 2015, 2020 and 2025
periods.

Autoregressive
Integrated Moving Average (ARIMA) model was introduced by Box and Jenkins
(known as Box-Jenkins Approach) for forecasting. This methodology to
time-series model building refers to the set of procedures for identifying,
fitting, and checking Autoregressive Integrated Moving Average (ARIMA) models.

x

Hi!
I'm Erica!

Would you like to get a custom essay? How about receiving a customized one?

Check it out