Effects of Pakistan's energy crisis on farm households

Abstract

Pakistan is experiencing an increase in load shedding or periodic cut-offs or disruption in its electricity supply. The issue poses serious consequences for the country, especially in its rural areas. This study uses data collected in 2014 from 950 farm households in the four major agro-ecological zones of Pakistan, which include cotton-wheat, rice-wheat, mixed and arid belts. The determinants of the number of hectares of land left fallow due to load shedding were appraised using the censored least absolute deviation model (CLAD). The impact of load shedding on income and the yields of major food and cash crops such as wheat, maize, rice, sugarcane, and cotton was estimated using a propensity score matching method. The empirical findings show that load shedding adversely affects cereal crop yields, household income, and food security levels. Poverty levels also increased due to load shedding. The finding suggests that a policy to reduce load shedding would contribute to growth in agricultural productivity and household income levels and decrease poverty levels. The appropriate duration and timing of load shedding could also help farmers living in rural Pakistan to plan farm management.