# ECONOMIC ANALYSIS OF INPUT TREND IN COTTON PRODUCTION PROCESS IN PAKISTAN: CONCLUSIONS

**Interculture**

Intercultural practices mean eradication of weed that adversely affects the crop yield. Different studies have highlighted much importance to interculture. For the present analysis, interculture has shown high significance. This variable has shown the highest t value (5.76) among all other included variables. The coefficient is the highest among all others variables included in the model. It explains that one rupee invested for interculture, will result in increase of rupees 21.60 in the total revenue.

**Plant Protection**

Application of pesticide covers plant protection. To save crop from pest attack, plant protection is very necessary. It further expresses that investing one rupee on plant protection; the total return will be increased by 1.20 rupees. Khuda bux, et al while analyzing the factor affecting cotton yield found the cost of plant protection measures had a positive effect on yield and this variable was highly significant with coefficient of 0.224.

**Correlation Matrix**

The correlation matrix indicates if there exists a linear relationship between two variables. The correlation coefficient value lies between 0 and 1. The value 0 depicts no relationship whereas value of 1 indicates perfect correlation. Table-3 explains the correlation between the variables.The correlation matrix explained in table-2 depicts that there is positive and high correlation between the variables. The diagonal matrix shows a value of 1 as the variable with itself has a perfect correlation.

**Inputs Growth Rate**

The overtime growth rate of the cost of the variables incorporated in the study have shown positive and increasing trend. However the growth rate of the cost of plant protection was the highest (8.98%), whereas, the seed growth rate (4.26%) was the lowest amongst all the variables. It was attributed to high intensity of pest attacks, resulting increased number of pesticide applications which ultimately resulted in higher cost. The lower seed cost growth rate depicted the dependence of cotton growers on their own farm seed. It also indicated that the use of new cotton seed varieties was limited to a few farmers. The Inputs cost growth rate in given in fig-1

**Input Share (%) in Total Cost of Production**

The each input share in the average total per acre cost of cotton production is given in Fig-1.Among the variable inputs, the major and highest percent share (28.536) was of land rent. Whereas the lowest percent share (2.1336) was of the seed. Plant protection share remained 15.91 percent. It was second highest input share after land rent. The others variable include labour cost, management charges, and abiana and usher charges and their cumulative share remained 17.01 percent. APCOM 2004-2005 calculated that in the total per acre cost of production of cotton, the highest share was of land rent (23 percent) followed by fertilizer (19 percent). The land rent cost share was the highest among all other inputs.

**Cost-Benefit**

The cost benefit has simply been calculated by subtracting total revenue by total cost. For the early ten years the net return has not been found significant. However, the year 1998 and 1999 have shown the highest per acre total return. The year 2000, 2002, 2006 and 2007 have shown negative return to the farmers. The total cost for these four years have increased from the total return mainly due to increasing cost of inputs and lower sale price of the produce which even have not covered the cost. The graphical representation of total cost, total return and net return is presented in the graph-5.

The graph-5 depicts that up to 1984 there was not much difference in the total cost and total revenue resulting a nominal per acre net return. However the net return showed increasing trend except during the year 2000 2002, 2006 and 2007. The per acre net return for these four years was Rupees, -1451, -1852.20, -1696.80 and -1065.58 respectively.

The analysis has revealed that the input cost has increased over time. The cost of seed, irrigation and interculture has shown significant relation with total return. The negative return indicated that the cost of inputs have increased at increasing rate. The highest (8.89 percent) input cost growth rate was observed in case of plant protection. Whereas the lowest cost growth rate was found in case of seed. The major share (28.536 percent) in the total cost of production was that of land rent and minimum was that of seed (2.1336 percent). The correlation matrix has shown a positive correlation among the input variables. In order to assist farmers to cover the loss, either cost of inputs should be decreased or the cotton support price be increased so that the cotton growers should continue growing seed cotton. If there exists an increasing trend in the input cost, the cotton growers will shift gradually to other competitive crop like rice and sugarcane. Electronic Payday Loans Online

**Table-2. The cotton production function Results**

Variable | С oe ffijcient | S1d. Error t-Statistic | Prob. |

С | 1040.683 | 403.2996 2.580422 | 0.0161 |

FERT | -4.160006 | 2.982516 -1.394798 | 0.1753 |

IRRI | 2.186018 | 0.612539 3.568779 | 0.0015 |

ГГСЬ | 21.60635 | 3.749646 5.762237 | 0.0000 |

LP | -3.587815 | 1.513892 -2.369928 | 0.0258 |

PP | 1206273 | 0.951103 1.268289 | 0.2164 |

SEED | 19.27067 | 4.365419 4.414391 | 0.0002 |

R-squared | 0973728 | Mean dependent var | 9196.534 |

Adjusted R-squaied | 0967422 | S.D. dependent var | 7164.382 |

S.E. of regres sion | 1293.121 | Akaike info criterion | 17.35814 |

Sum squared resid | 41S04019 | S chwara criterion | 17.67877 |

Log likelihood | -270.7303 | F-s tatis tic | 154.4285 |

Duibm-Watsoai stat | 1555526 | Prob (E – 5 tati 5 tic ) | 0.000000 |

**Table-3. CoireLitiaii between the Variables**

TR | FERT | IRRI | IT CL | LP | PP | SEED | |

TR | 1.000000 | 0 954667 | OB 19381 | 0961735 | 0 916786 | 0.959274 | 0 905775 |

FERT | 0.954667 | 1J000000 | OB 95 525 | 0965414 | 0 980508 | 0.966669 | 0S91712 |

IRRI | 0.819381 | 0S95525 | 1JQ 00000 | OS 11257 | 0 917229 | 0.841285 | 0 697844 |

IT CL | 0.961735 | 0 966414 | OB 11257 | 1J0 0)000 | 0 940834 | 0.940660 | 0 S50694 |

LP | 0.916786 | 0 980508 | 0917229 | 0940834 | 1J000000 | 0.929359 | 0S57195 |

PP | 0.959274 | 0 966669 | 0B41285 | 0940660 | 0 929359 | 1.000000 | 0 905699 |

SEED | 0.905775 | 0S91712 | 0j6 97 8 44 | OSD 694 | 0S57195 | 0.905699 | 1JQ00000 |

*Fig-1. Pakistan and World Cotton Yield Comparison*

*Fig-2. Pakistan cotton Area*

*Fig-3. Pakistan cotton production*

*Fig-4. Pakistan Lint Yield*

*Fig-5. Input growth rate*

*Figure-6. Input percent Share*

*Fig-7. Cost and Return*