And to Daphne Boucher, I am thankful for nicely typing the thesis. My deepest obligation goes to my class mates who increased my knowledge of the world and also frankly discussed each other's thesis topics. I would like to acknowledge my debt to Pakistani colleague at the Development Studies Centre, particularly Mr M.I. Khan, Mr A. Rauf, Mr M. Sarwar, Mr S. Malik and Mr W. Ahmad for encouragement and for providing "homely environment". Back home, I thank all my colleagues at the PERI,

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... ly Mr M.M. Ali, Mr A. Rehman and Mr A. Majid, for photocopying and sending the data in time. Of course my deepest appreciation goes to Tahira, my wife, who patiently spent two years in forced separation in our fond hope of a better future. My indebtedness is also due to my parents-in-law, and other relatives, particularly Aslam, Faiz and Nawaz, who looked after my family in my absence. Finally, I thank the Research School of Pacific Studies (A.N.U.), for providing me a place in the much coveted programme in post-graduate studies. Of course, no one but myself is to blame for errors and shortcomings. Haq Nawaz Shah August, 1982 Canberra, Australia vi ABSTRACT This study attempts to highlight and quantify the impact of tenure, farm size and mechanization on allocative efficiency of a sample of 54 farmers in the Punjab Province of Pakistan. Production function approach is used to estimate production elasticities of inputs from the farm accounts data for the year 1978-79. The estimated Cobb-Douglas production function showed that land, labour, fertilizer and non-draft animals are significant variables. Statistical tests showed that an average sample farm is experiencing constant returns to scale. Production functions estimated separately for different types of farms indicate that the labour factor is not significant on tenant/small/ non-mechanized farms; livestock is not significant on large farms; and fertilizer is not significant on mechanized farms. These results imply that tenure, farm size and mechanization significantly affect resource use pattern. Marginal value products for each input were calculated for different types of farms and statistically tested for their equalities with opportunity factor costs. The tests showed that tenants/non-mechanized farms are using less than optimal amounts of fertilizer. On the other hand both the large farms and mechanized farms are allocatively efficient in labour-use. It is observed that all types of farms are overstocking farm animals. A major conclusion of the study is that further research is needed on the impact of mechanization on labour and fertilizer use and on the relationship of livestock with the farm and farm households. vii CONTENTS Page ACKNOWLEDGEMENTS iv ABSTRACT vi