Pricing of agricultural capital inputs in Pakistan

The interviews were carried out in November and early in December, 1973 in Peshawar, Islamabad, Lyallpur, Lahore, Karachi, Hyderabad, and Quetta areas, thereby covering all major regions of Pakistan. The three capital goods studied involve somewhat different production and pricing processes. Fertilizer is manufactured domestically as well as imported. The marketing margins and the retail prices are set by the Central Government. Tractors are at present imported but there are plans for domestic assembly. Trading margins and prices of tractors are also controlled by the Central Government. Tubewells are manufactured in Pakistan from imported raw materials and components. While the Central Government does not fix margins, or retail prices, it does influence them through its regulation and distribution of raw material inputs. Thus, one could say that the results of the survey basically reflect administered pricing. However, it may be pointed out that the prices actually paid by the farmers are often in excess of those fixed by the Government. The three capital inputs have been discussed in three separate chapters and received indentical treatment consisting of a review of the structure of distribution, and examination of costs and prices, and finally, a review of problems and issues. Since prices are affected by the institutional structure, a certain amount of overlap is involved. Some of the policy discussions deal as much with structure as with price.