Wheat Consumption Determinants and Food Security Challenges: Evidence from Pakistan

Abstract

This study aims to explore the wheat consumption determinants in Pakistan as well as to analyze the own price, cross price, and income elasticity of demand for wheat. For estimation purpose, time series data were used based on annual observations covering the period from 1972-2020. Autoregressive Distributed Lag approach (ARDL) econometric technique was applied to analyze the existence of a long-term connection among wheat demand and wheat consumption determinants. Based on empirical analysis, the results of wheat prices, real GDP, and population show that wheat is a necessity staple food in Pakistan. Futher, results of rice prices and corn consumption reveal that rice and corn commodities are substitutes to wheat with less elastic demand in Pakistan. The estimated result of wheat imports exhibits a direct and significant impact on wheat consumption. Overall, the results suggest that domestic efforts required to reduce the wheat demand and supply gap such as, through advanced innovative production techniques, latest wheat varieties, land expansion, and exploring the additional water resources for irrigated agriculture. Additionally, this study recommends policy makers, Pakistan government and stakeholders to pay attention on increasing domestic wheat production in order to lessen the wheat imports, saving useful foreign exchange, and to resolve the food security issues in Pakistan.