Marketed Surplus Function of Major Agricultural Commodities in Pakistan

The marketed surplus of agricultural commodities plays asignificant role in the economic development of a low-income countrywhere agriculture is the principal source of income. This surplus is themain source of capital accumulation, since it provides the basic wagegoods to the urban sector. A rise in the marketed surplus makes theterms of trade favourable to the urban sector which enables it toenhance the size of its profits. This, in turn, helps the rapid growthof the economy. The marketed surplus not only provides thenonagricultural sector with food, but also enables it to get rawmaterials, liquid capital and foreign exchange. It reduces the need forimporting food stuffs and thus relieves pressures on the balance ofpayments. The role of marketed surplus in economic development is sowell known that further elaboration is superfluous. Given the presenthigh rate of population growth of now estimated at 2.7 per cent [16] andthe rate of increase in per capita income it is unlikely that themarketed surplus of agricultural commodities has kept pace with thegrowing demand. Attempts are being made to raise the productivity ofagriculture. Productivity, though of prime importance, is not the onlyfactor that determines the size of the surplus. The marketed surplus isdetermined by the interplay of different independent economic variables.Unless the pattern of behaviour of these variables is known any policyaimed at raising the size of the surplus may be ineffective. Therefore,the need for a study of the marketed surplus function becomes important.