PRICE DYNAMICS AND PRODUCTION RESPONSE OF MUNG BEAN PULSES IN PUNJAB, PAKISTAN: EVIDENCE FROM AN ARDL MODEL

Abstract

Mung bean is a major source of high-quality protein and consumed in different farms such as whole grains and sprouted to balance the human nutrition level in Pakistan.  The central theme of this study was to analyze the area and production scenario of mung bean pulses with respect to input and output prices at Punjab-Pakistan.  Statistical information on area, production, yield and prices of mung bean along with other major crops (cotton, sugarcane) and input price (DAP and Urea) was obtained for previous 38 years from different secondary sources. The data were analyzed using Autoregressive Distributed Lag (ARDL) bounds testing approach. The estimated results of the study revealed that own prices of mung bean have positive but statistically insignificant impact on its production and inversely related to the prices of other competing crops (cotton and sugarcane). This can be explained by the fact that pulses are considered a risky crop due to yield fluctuations when compared to other competing cereal and cash crops. Price of fertilizer returned a negative sign which indicated that increase in prices of input adversely affected the production of mung bean. Empirical results suggested that mung bean farmers are risk averse and prefer crops with sustained profitability thus there is a strong need of Government support through pulses package in the short run where a buy back guarantees and provision of improved seeds at subsidized prices is ensured. The findings suggest that farmers are risk averse and prefer crops with consistent profitability. Policy support is therefore required in the form of provision of quality seed, assured procurement pricing, and crop insurance schemes to encourage expansion of mung bean cultivation in Punjab-Pakistan