Demand for Nitrogenous Fertilizers and Fertilizer Price Policy in Pakistan: A Comment

In the Spring 1976 issue of the Pakistan Development Review, Chaudhry and Javed [2] had estimated a demand function for fertilizer in Pakistan. Based on these findings, they make a case for a 20.26 percent per year increase in fertilizer prices. This short note points out some errors in the analysis and raises serious questions relating to the implications drawn by Chaudhry and Javed for the fertilizer price policy in Pakistan. Section I argues that some conclusions drawn in the study are internally inconsistent. Section II points out deficiencies in the derivations of the main conclusions. Section III questtions the appropriateness of the fertilizer price policy suggested by Chaudhry and Javed. The final section sums up the main argument of the present study.