Abstract
Pakistanis Agriculture is required, more than ever before, to grow at a faster rate in order to feed rapidly growing population with bade as well as protective foods; to supply raw meterials to the growing indtistiral sector; to increase purchasi.ng power of agriculture sector for buying finished goods; to augment production for export as well as for import substitution. It would be beyond the capacity of traditional and subsistance oriented agriculture to fulfill these ends. Reasonable prices for agricultural commodities can provide a good incentive to farmers to use modern inputs for increasing their production. So agricultural price policy can play an important role in shaping the development pattern of a country. Pakistan introduced a system of support prices in 1960, Initially its cave-rage was limited and government was supposed to enter the market only in case the price ofwheat will go below Rs, 13.50 per mound. After-wards Rice, Cotton and Sugarcane were also included in the programme. presently almost all the major crops are covered in the progromme. Though there are several alternative methods to determine support prices such as cost of production, value 'Cost ratio, crop price in relation to wholesale price index, international price structure, ruling price criterion, intercrop parity criterion and pariy criterion etc.; art appropriate method for determining the level of support prices has yet to be devised. In this paper parity price approach has been used to determine the support prices because it will provide a yard-stick designed to represent the fair price for the commodities which farmers produce in relation to the price of commodities which they buy. The prices so determi-ned will help to improve the terms of trade of agriculture and thus will provide a good incentive to farmers for augmenting their production. Main Objectives of the study are:. 1) To compare the price status of the farmer as a producer with his status as a co risumer.
