Comparative Advantage and Competitiveness of Major Crops in Pakistan

Basic economic problem faced by all developing countries is the allocation of inherently limited resources to various alternatives ends. Exploitation of international competitiveness is the most appropriate criteria to act as guiding factor here. The present study is aimed at analyzing the agricultural comparative advantage of Pakistan and its implications for trade development. Four crops wheat, cotton, rice and sugarcane were selected. Policy Analysis Matrix (PAM) provides data for measurement of comparative advantage, competitiveness and policy distortions. Comparative advantage is being criticized for its "static" nature. Therefore, "Price Risk Analysis" is also carried out to evaluate alternate scenarios; utilizing the two softwares i.e. the "Best Fit" and @ Risk 4.5.3. The study would surely help the policy makers to assess the potential of investing in research and development of agriculture not only to maintain the current foothold but to further improve the competitiveness of Pakistan agriculture in international scenario. This study will also provide researchers and policy makers with information for formulation of food, agriculture and trade policies.