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Sarhad J. Agric. Vol.25, No.4, 2009 IMPLICATIONS OF TRADE LIBRALIZATION ON ECONOMIC WELFARE OF PRODUCERS AND CONSUMERS OF RAPESEED IN PAKISTAN MUHAMMAD ZULFIQAR*, SHAHNAZ A. ARIFULLAH**, DILAWAR KHAN*, DAWOOD JAN**, RIZWAN AHMAD**, IFTIKHAR AHMAD**, NAEEM SHAH** and WASIULLAH* * Kohat University of Science and Technology, Kohat - Pakistan. ** NWFP Agricultural University, Peshawar - Pakistan. ABSTRACT Rapeseed is one of the major crop of Pakistan. It occupied an area of 370,000 hectares in 1980 which squeezes to 336,000 hectares in 2005. This tempted to investigate through economic welfare analysis using pre- and post-WTO domestic policy regimes, the reasons for falling area under rapeseed crop. The study is based on econometrically estimated supply and demand functions of Pakistan’s rapeseed crop, government policies and interventions prevailed during the study period, estimated welfare effects associated and simulated implications of the implementation of WTO’s trade liberalization domestically and abroad. The findings of the research indicate that rapeseed crop had been subjected to ‘no export’ regime during 1985-1995 and ‘price support’ regime during 1995-2005. These policy regimes resulted in such welfare effects which showed higher losses to consumers (Pak Rs.2275.22 million per year) than gains to producers (Rs.1 183.34 million per year) during the latter period of the study. Free trade simulation results confirmed larger gains to consumers than losses to producers. If trade liberalization was introduced in world market, it would have resulted in additional gains (Rs.1527.75 million) to consumers than losses (Rs.795.35 million) to producers. The recommendations made in light of the results are that first, state level price interventions s