The Effect of the Growing Constraint of Subsistence Farming on Farmer Res¬ponse to Price: A Case Study of Jute in Pakistan

During the last decade or so, substantial empirical work has been done on farmer response to price in the underdeveloped countries1. Most of the research effort, however, is lacking theoretical rigour and is heavily oriented towards the estimation of area (output) supply functions and the verification of the existence of economic incentives. The purpose of this study is to extend the research horizon by emphasizing and elaborating the role of certain constraints in determining the degree of farmer response to price which is one of the aspects of economic performance. We believe that the level of farmers’ economic performance varies directly with their ability to exploit the opportunities within the horizon. It was main¬tained elsewhere that the basic reason for farmers’ low level of economic performance lies in the fact that their ability to exploit given and well-understood opportunities is reduced by various constraints — physical (climate, water avail¬ability, etc.), technological (lack of more productive technical knowledge and knowhow, etc.) and institutional (the practice of subsistence farming) [12].