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Sarhad J. Agric. Vol.25, No.4, 2009
IMPLICATIONS OF TRADE LIBRALIZATION ON ECONOMIC WELFARE OF
PRODUCERS AND CONSUMERS OF RAPESEED IN PAKISTAN
MUHAMMAD ZULFIQAR*, SHAHNAZ A. ARIFULLAH**, DILAWAR KHAN*, DAWOOD JAN**,
RIZWAN AHMAD**, IFTIKHAR AHMAD**, NAEEM SHAH** and WASIULLAH*
* Kohat University of Science and Technology, Kohat - Pakistan.
** NWFP Agricultural University, Peshawar - Pakistan.
ABSTRACT
Rapeseed is one of the major crop of Pakistan. It occupied an area of 370,000 hectares in 1980 which
squeezes to 336,000 hectares in 2005. This tempted to investigate through economic welfare analysis using pre- and
post-WTO domestic policy regimes, the reasons for falling area under rapeseed crop. The study is based on
econometrically estimated supply and demand functions of Pakistan’s rapeseed crop, government policies and
interventions prevailed during the study period, estimated welfare effects associated and simulated implications of
the implementation of WTO’s trade liberalization domestically and abroad. The findings of the research indicate
that rapeseed crop had been subjected to ‘no export’ regime during 1985-1995 and ‘price support’ regime during
1995-2005. These policy regimes resulted in such welfare effects which showed higher losses to consumers (Pak
Rs.2275.22 million per year) than gains to producers (Rs.1 183.34 million per year) during the latter period of the
study. Free trade simulation results confirmed larger gains to consumers than losses to producers. If trade
liberalization was introduced in world market, it would have resulted in additional gains (Rs.1527.75 million) to
consumers than losses (Rs.795.35 million) to producers. The recommendations made in light of the results are that
first, state level price interventions s
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