Estimating the economic perspective of cotton crop in southern Punjab of Pakistan

Abstract

This study has focused to find out the cost and return (profit) of cotton cultivation in district Bahawalpur namely known the core cotton zone of Punjab Pakistan. The profitability of the cotton cultivation was measured with the application of economic analysis (benefit cost ratio) for the year 2012-13. In the data collection, procedure a pretested developed questionnaire was used for the collection of two hundred and forty cotton farmers. The estimated profitability of benefit cost ratio was 1.25, which has indicated as investment of one unit, it returns the 1.25 with net return of 0.25. A proper econometric model applied to analyze the cotton profit function, which has reported cotton prices and output positively while cost of inputs inversely related to profitability of cotton. In the production function model cropped area, land preparation, seed, fertilizer, pesticides, irrigation, and labor have indicated the positive and significant association with cotton production. Cotton friendly policies, stability in cotton prices, subsidizing cotton inputs and adequate provision of credit are prerequisite measures to increasing cotton cultivation and production.