Abstract:
This study analyzes the future prospects of wheat production in
Pakistan. Parameters of the forecasting model are obtained by estimating a
Cobb-Douglas production function for wheat, while future values of various
inputs are obtained as dynamic forecasts on the basis of separate ARIMA
estimates for each input and for each province. Input forecasts and
parameters of the wheat production function are then used to generate
wheat forecasts. The results of the study show that the most important
variables for predicting wheat production per hectare (in order of
importance) are: lagged output, labor force, use of tractors, and sum of the
rainfall in the months of November to March. The null hypotheses of
common coefficients across provinces for most of the variables cannot be
rejected, implying that all variables play the same role in wheat production
in all the four provinces. Forecasting performance of the model based on
out-of-sample forecasts for the period 2005-06 is highly satisfactory with
1.81% mean absolute error. The future forecasts for the period of 2007-15
show steady growth of 1.6%, indicating that Pakistan will face a slight
shortage of wheat output in the future.
