Demand for Nitrogenous Fertilizers and Fertilizer Price Policy in Pakistan

In: The Pakistan development review: PDR, Band 15, Heft 1, S. 1-7

Abstract

One of the major constraints to an increase in Pakistan's
agricultural production is low fertilizer input. Despite spectacular
growth of fertilizer con¬sumption during the '60s the rate of fertilizer
application in Pakistan remains below the optimal rate [8, pp.77-90]
and far below the rates in advanced countries [15, p. 24]. An upward
movement of the rate of fertilizer applica¬tion, essential to avoid
recurring loss of agricultural production, entails ap¬propriate policy
measures over a long time-horizon. Appropriate policy guidance may well
be derived from the experience of the '60s. It is believed that low
fertilizer prices, among other factors, contributed enormously to the
growth in fertilizer consumption [9, pp.419-25]. Towards the end of the
'60s, however, the fertilizer prices increased causing a decline of per
acre and total fertilizer consumption [15, p. 24]. As fertilizer is a
critical input, reduced consumption is translated into reduced
agricultural output, higher prices of agricultural commodities or both.