article · Discover Sustainability
This research evaluates how international oil prices, agricultural land use, and agricultural employment affect agricultural value added in Pakistan between 1990 and 2021. Using an autoregressive distributed lag bounds testing model, the analysis establishes a stable long-run relationship across these factors. Agricultural employment demonstrates a statistically significant positive effect on agricultural value added over the long term, whereas land use and oil prices show statistically insignificant long-run impacts. However, short-run dynamics differ notably: spikes in oil prices significantly decrease agricultural value added, while lagged shifts in land use and employment also exert significant influences. The system corrects about 84 percent of short-run imbalances within a single year, highlighting rapid adjustment toward long-run equilibrium. Overall, the findings underline the need to protect the sector from energy market shocks and to reinforce employment.
Agriculture underpins employment, food security, and general economic growth, but energy market volatility poses substantial threats. Demonstrating how oil shocks quickly depress agricultural productivity, alongside the sustained importance of agricultural labour, provides crucial guidance for policymakers seeking to buffer food production systems against global fuel disruptions and improve long-term economic resilience.
The abstract does not indicate a direct commercial application pathway, as it focuses on macroeconomic and econometric analysis. The findings could inform policy design, strategic planning, or risk management frameworks for agricultural planners and development organisations seeking to mitigate energy price exposure, but this remains early-stage economic evidence rather than a deployable product.
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Pakistan's agricultural sector plays a fundamental role in ensuring food security, generating employment, and supporting economic growth; however, its performance is increasingly challenged by volatile international oil prices (OIL), changes in agricultural land (AL) use, and shifts in agricultural employment (AE). Despite the importance of these factors, limited empirical evidence exists on their combined long-run and short-run effects on agricultural value added (AVA) in Pakistan. Therefore, this study investigates the dynamic relationships among OIL, AL, AE, and AVA using annual data for the period 1990–2021 obtained from the World Development Indicators, the U.S. Energy Information Administration, and the Food and Agriculture Organization. The study employs the Autoregressive Distributed Lag (ARDL) bounds testing approach after examining the stationarity properties of the variables using the Augmented Dickey–Fuller (ADF) and Phillips–Perron (PP) unit root tests. The empirical findings confirm the existence of a stable long-run equilibrium relationship among the variables. AE has a positive and statistically significant long-run effect on AVA, whereas OIL and AL have statistically insignificant long-run effects. In the short run, increases in OIL significantly reduce AVA, while lagged changes in AE and AL significantly influence agricultural performance. The error-correction coefficient (− 0.843) indicates that approximately 84% of short-run disequilibrium is corrected within one year, demonstrating rapid convergence toward long-run equilibrium. These findings suggest that strengthening AE, promoting efficient resource utilization, and reducing the sector's vulnerability to energy price fluctuations are essential for enhancing agricultural performance and supporting sustainable agricultural development in Pakistan.
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DOI: 10.1007/s43621-026-04527-5
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