Research on World Agricultural Economy

The Impact of Energy Consumption on Agriculture Production in Pakistan

Faiz Ur Rahim

International Institute of Islamic Economics (IIIE), International Islamic University Islamabad, Islamabad 44000, Pakistan

Saima Rubab

International Institute of Islamic Economics (IIIE), International Islamic University Islamabad, Islamabad 44000, Pakistan

Sania Shaheen

Department of Economics, University of Wah, Wah 47040, Pakistan

Madiha Asma

International Institute of Islamic Economics (IIIE), International Islamic University Islamabad, Islamabad 44000, Pakistan

Lal K. Almas

Department of Agricultural Sciences, Paul Engler College of Agriculture & Natural Sciences, WTAMU, Canyon, TX 79016, USA

DOI: https://doi.org/10.36956/rwae.v6i2.1459

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Abstract

Energy is the key element for economic development as it offers major services for continuing the economic activity, and thus, improves the human life. However, the empirical evidence regarding the influence of energy consumption on agricultural production in the context of developing economies is limited in the current empirical literature. Therefore, this research fulfills this gap by empirically investigating the impact of energy consumption on agriculture Production for Pakistan by collecting time series data based on annual observation from (1980-2020). For estimation purpose, this study employed the Auto Regressive Distributed Lag approach to analyze the existence of long-term connection between energy consumption and agriculture production. The study findings show that the long-term co-integration relationship exist between energy consumption of electricity, oil, and agricultural production. The energy consumption of electricity and oil has a significant and direct impact on agricultural production. Based on empirical results, this study recommends policy makers, Pakistan government to design policies regarding the availability of cheaper electricity to small farmers in the rural areas. For this purpose, advance techniques are needed. Therefore, government should allocate more funds for the innovations in the energy sector.

Keywords: Energy consumption, Agricultural Production, Energy consumption of oil and electricity, Autoregressive Distributed Lag approach.

Keywords: Energy Consumption; Agricultural Production; Energy Consumption of Oil and Electricity; Autoregres‑ sive Distributed Lag Approach

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