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This article mainly aims to investigate the link between government expenditure on agriculture, agriculture product prices and performance of agriculture sector in the economy of Pakistan. Time series data collected from World Development Indicators and Food and Agriculture Organization of the United Nations for the period of 1996-2015. The study used Augmented Dickey–Fuller (ADF) unit root test and Autoregressive Distributed Lag (ARDL) approach of co integration to test the relationship between the variables. Results indicate that both government expenditure on agriculture and agriculture product prices are essential to enhancing agriculture growth and there exists long-run relationship between expenditure of government on agriculture, prices of agriculture product and economic growth of Pakistan. Furthermore, agricultural government expenditure is more prominent in effecting the agriculture economic growth with respect to agricultural products prices in the long-run. Therefore, it specifies that government of Pakistan should increase its expenditure and also take initiatives to encourage and motivate the farmers toward increasing productivity by using scarce sources efficiently to bring economic prosperity in the agriculture sector.

COMPARISON OF GOVERNMENT EXPENDITURE AND SOME REPRESENTATIVE OF AGRICULTURAL PRODUCT PRICES AND THEIR IMPACT ON AGRICULTURAL GROWTH OF PAKISTAN