Impact of Hydroponics Technology in Pakistan’s Fruits and Vegetable Sector and Global Trade: A CGE Analysis

Hydroponics is a method of growing plants using mineral nutrient solutions, in water, without soil enhancing productivity multiple times as compared to conventional agriculture. From decades vegetable productivity is stagnant in Pakistan forcing Pakistan to import. Climate change, and extreme climatic conditions are further threatening agriculture production and hence food security. Food security through productivity enhancement is the major thrust of most of the national and international development agendas. This coupled with increasing population are driving up global food demand thus putting upward pressure on Agricultural productivity. Technological development via Hydroponics can be the potential solution to this issue. With this backdrop, we adapted a global commutable general equilibrium model using latest available GTAP data set to quantify the potential hydroponics production on macro as well as at micro level in Pakistan. Different simulations were designed comprises of increase in the production of fruits and vegetables using hydroponics and reducing the import tariffs of chemical used as an input in this state of art technology. Result shows an overall positive impact on Pakistan’ real GDP, sectoral exports and imports, improves terms of trade and reducing the local market price of fruits and vegetables in Pakistan. In short adoption of hydroponics technology can positively contributes in improving the macroeconomic indicators and consumer welfare in the country.?