Agricultural Terms of Trade in Pakistan: Issues of Profitability and Standard of Living of the Farmers

In the wake of the liberalised trade regime, Pakistan is undergoing structural adjustments. At the heart of the adjustments is liberalisation of markets and prices, including freeing the currency market, reducing industrial protection, and introducing financial austerity and macroeconomic stability. The agricultural sector is also undergoing these changes, which include eliminating export taxes and other trade restrictions and reducing producer subsidies (input and output subsidies). Such changes in the sector are critical as agriculture is the largest sector of Pakistan economy.