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Pakistan's stated policy is to increase basmati rice production through price support measures and liberalization of input markets. The present study assesses the scope for price support policy to achieve growth targets and whether additional assistance is needed from non‐price policy measures. The econometric analysis is based on a profit function using farm household survey data from the Punjab. Pakistan for 1995–1996. The results reveal that to achieve production targets, very high support prices are required. Since these price levels may not be feasible, a more appropriate option may involve some inducements to expand paddy area and the area allocated to modern varieties.
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Farooq et al. (2001) studied this question.
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