The role of agricultural growth in South Asian countries and the affordability of food: An inter-country analysis

Abstract

This paper empirically examines the dynamic relationship between agricultural productivity, gross domestic products in agricultural, industrial and service sector, agricultural gross capital formation, and cultivable land by using a Vector Error Correction model. Augmented Dicky-Fuller (ADF) test and Johansen methodology are employed to test unit root and cointegration respectively. All the variables other than cultivable land are found to be non-stationary in their levels and stationary in their first differences. In the long-run and short-run relationships, the variables, agricultural gross capital formation and services sector GDP, are found to be contributing significantly to agricultural productivity growth in Pakistan and India. In order to ensure success of structural reform policies, it will be necessary to undertake concrete capital investment in the agriculture and agro-based industrial sectors in South Asian countries.