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In an attempt to identify the effect of various economic,
social and political factors on the degree of market responsiveness
displayed by cultivators of both food and cash crops, estimates of the
supply elasticities of several crops were made. The analysis employed a
Nerlove-type supply model [5], which has been widely applied in recent
years to the production of a considerable number of crops. Most of the
earlier studies have been aggregate in nature, but, given the motivation
of the present effort, such an approach was not appropriate. Pakistan
displays a profile made up of a wide variety of climatological,
topographical, and even sociological circumstances ranging from the
littoral districts near Karachi to the mountains above Peshawar, and our
basic intention was to high¬light any inter-regional rural differences.
Thus the supply model was applied not only to national output, but also
to that of the divisions and districts and the results are reported
herein.

Diverse instruments have been used to encourage developing agriculture. In the process, billions of dollars have been spent on providing incentives to peasants. Given scarce resources, an important concern has been the issue of what policy instruments to emphasize. In this regard, useful policy information can be gleaned from the role of expected profits (revenue and input prices), assets (irrigation and infrastructure), and relevant risks, in evoking peasant response. Using panel data for the period 1967/1968 to 1999/2000 pertaining to seven major Indian cash crops cultivated across 14 major states, we find strong evidence of a differential producer response in the post‐liberalization phase, although the important variables per se are much the same. Our results suggest that the preferred policy ought to emphasize availability of irrigation, affordable fertilizer, and rural infrastructure, rather than incessant increases in output prices.

Recent evidence suggests that the main obstacle to sustainable agricultural development is the failure of any economic policy, whether promoting food crops or exports, to adequately address problems of natural resource management. Indonesia serves as a useful illustration, as the country's pursuit of both food self-sufficiency and export crop promotion strategies has encountered many problems of environmental and resource degradation. (DÜI-Sen)