Distortions in Incentives for Production of Major Crops in Pakistan: Recent Trends and Emerging Challenges
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Domestic production of wheat, rice, cotton and sugarcane has experienced severe implicit taxation, averaging $1.72 billion per year during 2006-08. These distortions to producer incentives, which have resulted in huge resource transfers, must be removed if Pakistan is to address the recurring crises afflicting the crop sector, alleviate poverty, and achieve sustainable development. The institutional capacity to conduct in-depth policy analysis must also be strengthened.