Two major challenges facing Pakistan's economy are to provide enough food for a rapidly growing population and to absorb the expanding labor force into productive employment-problems shared with many other developing countries. Although more than half of the labor force is engaged in direct agricultural production, and significant gains in food output have been achieved in the past 10 to 15 years, Pakistan continues to experience difficulty in increasing food production at a rate to match demand growth. Government policies to increase domestic food output have included emphasis on increasing use of conventional resources such as irrigation water and fertilizer, and on adoption of new technologies such as improved crop varieties, pesticides and mechanization of farm power sources. With relatively limited possibilities for increasing the quantity of arable land, Pakistan must look to methods which increase productivity per acre, rather than emphasizing labor productivity, as has been the case in the developed economies. The effects of food production and employment of policies which attempt to increase irrigation water supply and encourage farm mechanization are the focus of this study. A production function analysis was performed on farm survey data obtained in the Indus Basin, Pakistan, for 197273 crop year. The sampling procedure and specification of variables explicitly ajor challenges facing Paki's economy are to provide enough for a rapidly growing opulation to absorb th expanding labor force productive employment-problems ed with many other d veloping tries. Although more than hal of labor force is en aged in direct icultural production, and significant i s in f od output have been achieved e past 10 to 15 years, Pakistan cones to experience difficulty increasfood production at a ra e to match and growth. Government policies to ease domestic food output have ined emphasis on increasing use of entional resource such as rrigation er and fert lizer, and on adopti n of technologie such as improved crop ieties, pesticides and mechanization ar power sources. i relatively limited possibilities for easing the quan ity of arable land, consider irrigation water and farm power inputs. The derived marginal productivities and estimates of soil opportunity costs of resources are employed to examine efficiency of resource allocation on several types of farms. Tentative implications for agricultural development policy are indicated. Most of Pakistan's agricultural production is carried out in the Indus Basin, and is based on irrigation from the world's largest irrigation network. The elaborate canal network consists of some 38,000 miles of canals and a series of barrages and canal headworks which control the diversion of river flows into the canals. The average annual river diversions are about 85 million acre feet, out of about 142 million acre feet aver-