ABSTRACT: Rice isn't just another crop; it's the backbone of food security for over half the world's population. For many developing countries, it drives rural economies, keeps people employed, and helps keep local markets steady. Pakistan is one of the world's leading rice producers. The rice production drives rural economies, sustains employment, and stabilizes local markets. It also contributes significantly to food security and foreign exchange earnings. However, despite expanding the global export markets, Pakistan's share remained stagnant, particularly after India's post-2012 dominance in the global rice markets. This raises concerns regarding understanding the underlying factors that may determine Pakistan's rice export competitiveness. This study investigates the determinants of rice export competitiveness in Pakistan using annual time-series data from 1980 to 2024. The relative share of rice exports in total agricultural exports measures export competitiveness. Key explanatory variables include input costs, trade openness, exchange rate, global export prices, availability of agricultural credit to farmers, and yield per hectare. The Autoregressive Distributed Lag (ARDL) cointegration approach is applied to estimate both long-run and short-run relationships. The findings reveal that higher input costs deteriorated Pakistan's competitiveness in the global rice market. In contrast, trade openness, agricultural credits, and yield per hectare positively and significantly enhance competitiveness. Whereas exchange rate fluctuations and changes in the export price of rice do not have any significant impact on Pakistan's export competitiveness. An insignificant relationship may suggest that non-price factors, such as quality and buyers' preferences, determine the international demand for rice. The estimated result confirms that export competitiveness is a long-run phenomenon. Any deviation in the short run, roughly nine-tenths, is corrected within a year. The study concludes that Pakistan's competitiveness in the global rice market remains stable but heavily dependent on input cost efficiency, technology adoption, and improving productivity rather than price-based competition. Thus, the study suggests that rationalizing fertilizer and pesticide prices, expanding local agro-chemical production, and subsidizing modern farming inputs to lower rice production costs are required to maintain rice competitiveness. Furthermore, adopting better technologies, improving productivity, and meeting international quality standards necessitate the availability of agricultural credits to the farmers.
Akram et al. (Sun,) studied this question.