Factors Affecting The Growth Of Pakistan's Agricultural Products Export

Pakistan is an agriculture-based country,so the agricultural sector is known as the backbone of the national economy.Agriculture is the second largest economic sector of Pakistan.This sector has a great contribution to value-added nevertheless,the agricultural export of Pakistan is decreasing with the time trend.Considering the national economy and the agricultural industry,it is necessary to focus on earnings through agricultural products export to improve the livelihood of local farmers.Therefore,the current study aimed to analyze the short-term and long-term factors affecting agricultural products export.The first part of the study analyzed the relationship between agricultural products export with Social and Economic factors(total population,employment in agriculture,cereal production,foreign direct investment,credit to agriculture,area sown,and agricultural machinery).The annual time series of 1976–2016 were collected from World Bank indicators,the Food and Agriculture Organization,and the Statistical Bureau of Pakistan.An autoregressive distributed lag,along with a vector error correction model,was employed.A cointegration test showed long-term associations between the selected variables.While the autoregressive distributed lag model confirmed the short-term correlation between area sown and crop production towards agricultural products export,there is no long-term relationship between the selected variables.In addition,the bidirectional correlation between employment in agriculture and agricultural products export was confirmed by the vector error correction model.Therefore,it is essential to increase agricultural production with the available natural resources to increase foreign earnings.In the second part,this study examined the causal relationship of Pakistan's agricultural products export with Demographic,Resources,and Environmental factors(industrialization,urbanization,transportation,energy consumption,and carbon emissions)in Pakistan.Time series data for the last forty years were used to employ the short-run and long-run nexus between the selected variables by analyzing the autoregressive distributed lag model(ARDL)and the Granger causality test was analyzed in order to estimate the causality directions.The results of the unit root test indicate that all the selected variables are stationary at the level and first difference.The bound test proofed that all the variables are co-integrated at a 1% significance level.Long-run estimates suggest that an increase in energy consumption will lead to an increase in the export of agricultural products.While an increase in urbanization,transportation,and carbon emission resulting in a decrease in agricultural products export of Pakistan.In the case of short-run,an increase in industrialization,transportation,and energy consumption leads to an increase in agricultural products export.Increasing urbanization and carbon emission decrease the agricultural products export of Pakistan.Based on our findings,we recommend sustainable agricultural production,renewable energy consumption,low carbon emission technologies,and a green portfolio for a sustainable agricultural products export and clean environment.