Agricultural Economics
H. Balali; H. Shahbazi; Z. Seid Mohammadi; M. Baniasadi
Abstract
Introduction: Agriculture is one of the basic sectors of any country and is very important in creating employment and production of industrial raw materials. Although the most important role of agriculture in any country is to provide the food security. The world's population is growing, and resources ...
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Introduction: Agriculture is one of the basic sectors of any country and is very important in creating employment and production of industrial raw materials. Although the most important role of agriculture in any country is to provide the food security. The world's population is growing, and resources are dwindling. Therefore, feeding the growing population of the world requires more agricultural production. One of the ways to increase agricultural production is to increase yield per hectare. Chemical fertilizers significantly increase production per hectare. But excessive use of chemical fertilizers can also lead to environmentally externalities such as groundwater pollution, reduced quality of agricultural products and endanger human health and the environment. Therefore, the optimal use of production inputs in the agricultural sector is essential. Unfortunately, despite the emphasis of agricultural economists on the optimal use of production inputs, this issue has been taken for granted by farmers and policymakers in the agricultural sector. The purpose of this study is to determine the optimal economic level of use of chemical fertilizers (nitrogen, phosphate and potash) in the production of irrigated wheat and barley. Materials and Methods: In order to determine the optimal economic level of chemical fertilizer inputs (nitrogen, phosphate and potash) in the production of irrigated wheat and barley in Iran, Bayesian approach and non-normally distributed stochastic plateau function, based on the developed Von Liebig algorithm were used. The estimation of the optimal amount of input usage depends on the functional form and the distribution assumptions based on the production data. The stochastic plateau function is one of the functions has been used to determine the optimal amount of inputs (especially chemical fertilizers). The stochastic plateau function provides insight into why farmers may over-use inputs. The efficiency of the linear stochastic plateau function is better than nonlinear and polynomial functions, and it estimates a more realistic pattern of farmers' expected profits, because the function is stochastic. For simple model estimation, only the input of chemical fertilizers (nitrogen, phosphate and potash) is considered as the limiting resource. If it is assumed that the threshold point is related to the intercept, which represents the yield of crops without input consumption, the equation of the stochastic plateau function is written as the following relation: (1) Where the yield of the crops in Iran, K is the amount of input in the crop production, and θ are the coefficients of the yield function that must be estimated, and is the transmitter intercept that represents all random variables. The used data in this study were collected from agricultural statistics and the production cost database of the Agriculture Ministry. The panel data were collected during 2007-2017 period. Results and Discussion: Based on the results of the study, the average optimal consumption of nitrogen fertilizer in the production of irrigated wheat and irrigated barley in Iran was estimated 117.05 and 29.00 kg/ha, respectively, while the current average consumption of nitrogen fertilizer in the production of irrigated wheat and barley is 163.626 and 38.75 kg/ha, respectively. In other words, during the years 2007 to 2017, the amount of nitrogen fertilizer used in the production of irrigated wheat was 46.576 kg/ha (equivalent to 28.46%) and in the production of irrigated barley was 9.75 kg/ha (equivalent to 25.16%) more than the optimal level. Also, the potential yield of irrigated wheat and barley with respect to nitrogen fertilizer input was estimated 2754.5 and 2549.80 kg/ha, respectively, in the Bayesian method. The average optimal use of phosphate fertilizer in production of irrigated wheat in Iran was estimated as 97.70 kg/ha, while the current average consumption of phosphate fertilizer in production of irrigated wheat is equal to 123.06.02 kg/ha. In other words, during the years 2007 to 2017, the amount of phosphate fertilizer used in the production of irrigated wheat in Iran was 25.362 kg per hectare (equivalent to 20.609%) more than the optimal level. Also, the potential yield of irrigated wheat due to phosphate fertilizer input, about 2904.54 kg/ha has been obtained in Bayesian method. the average optimal consumption of potash fertilizer in the production of irrigated wheat and irrigated barley in Iran was estimated 39.68 and 81.81 kg/ha, respectively, while the current average consumption of potash fertilizer in the production of irrigated wheat and barley is 50.64 and 134.18 kg/ha, respectively. In other words, during the years 2007 to 2017, the amount of potash fertilizer used in the production of irrigated wheat was 10.96 kg/ha (equivalent to 21.65%) and in the production of irrigated barley was 52.37 kg/ha (equivalent to 39.02%) more than the optimal level. Conclusion: According to the results of present study, farmers in the production of wheat and barley use chemical fertilizers (nitrogen, phosphate and potash) more than the optimal amount, so that the average optimal use of chemical fertilizers of nitrogen, phosphate and potash in the production of irrigated wheat, respectively 28.52, 20.59 and 78.36, and in the production of irrigated barley, the average optimal use of nitrogen and potash chemical fertilizers, respectively 74.84 and 39.03% per hectare, are less than the current amount of chemical fertilizer use in the country. According to the results of the study, in order to more efficiently use of chemical fertilizers and to reduce environmental pollution caused by their use in agricultural production, the government should reduce the direct payment of chemical fertilizer subsidies. Regarding the elimination of subsidies and pricing of chemical fertilizers (nitrogen, phosphate and potash), the importance of the type of fertilizer in crop production, input production elasticity and input demand elasticity should be considered.
M. Baniasadi; S.A. Jalaee Esfandabadi
Abstract
Introduction: The growth of agricultural production and natural resources are from primary objectives of any political system, because this section has a vital role in providing food security. According to the production theories, production growth will come from two sources; more use of production factors ...
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Introduction: The growth of agricultural production and natural resources are from primary objectives of any political system, because this section has a vital role in providing food security. According to the production theories, production growth will come from two sources; more use of production factors within the framework of existing technologies and second, with using more advanced and more efficient production methods and effective use of production factors. In fact, the second one is tied to the concept of productivity. New and efficient technologies are the most important factor for productivity growth. Technology was enhanced through internal and external sources. External sources include spillover technology from developed countries into another country. Empirical evidence on the impact of spillover technology on productivity growth of indigenous producer is vague. One perspective proposes that FDI, technology transferred from developed countries has positive effects on developing countries and another perspective is against it. This paper explores the role of technological spillover on total factor productivity (TFP) growth in agricultural sectors of Iran uses time series data during 1971-2011.
Materials and Methods: In this study, Kendrick model was used to calculate total factor productivity. After calculating productivity, affective factors on it, were examined through ARDL model. The aim of this study is examination of technology spillover on the productivity of agricultural sectors. The degree of technology diffusion grows with increase in technology distance between the hosts and the foreign countries. The greater the technology distance, the more difficult it becomes for developing countries to boost independent innovation. To calculate the index of technology spillover, commercial partners should be considered that are more advanced in science and technology than Iran. For this purpose, commercial partners in this study are Group of Eight developed countries (D8) plus China. Technology spillover indexes are thus decomposed into two components: Imports of capital goods and foreign direct investment (FDI). Index of capital goods imports measures imports of capital goods from major commercial partners of Iran (D8 countries and china). Foreign direct investment (FDI) represents the share of foreign capital in agricultural sectors. Therefore, the empirical analysis of the technology spillover on the productivity of agricultural sectors is based on theatrical framework and ARDL model.
Results and Discussion: According to the results of the ARDL model, technological spillover effect on the TFP of agricultural sector, in long-term shows that technology spillover has a positive and significant effect on agricultural productivity from both channels of capital goods import and foreign direct investment (FDI). But in short-term spillover variable from a capital goods import channel is not significant. This indicates that absorption of the technology from imports of capital goods channel do not perform very well and probably low-tech and without affecting on TFP of agriculture sector is imported. But in long-term technology spillover from imports channels also had a positive impact on total factor productivity of the agricultural sector. In fact, high technologies in long-term can be absorbed through the imports and influenced on TFP. According to thesis study results, the estimated coefficient of error correction term is equal to 0.53.This means that in each period, 53 percent of imbalances of agricultural TFP will be resolved. The average speed of upward of adjustment reflects the fact that in Iran economy, deviations and imbalances have arisen in the agricultural sector TFP caused by technology spillovers shocks, move very fast towards long-run equilibrium.
Conclusions: The purpose of this paper is to advance the knowledge for a key question with evident implications for economic policy: What is the importance of international technology spillover transmitted through trade and FDI for the TFP growth in the agricultural sector of Iran? For this purpose, we have set out from the modeling initially based on a theoretical framework, which is modified by introducing two fundamental channels. Thus, we have included the capital goods imports and foreign direct investment as factors capable of influencing TFP, both directly and indirectly: improving the capacity of absorption of foreign technology. In fact, we have included an explicit measure of international technology spillover which combines the technological capacity of the rest of the country and the weight of the imports that are made from each one of them. The different specifications of the model are estimated using the ARDL method and the period is that from 1971 to 2011. The results achieved reveal, first, the existence of international technology spillover which have had a favorable impact on the TFP growth of the agricultural sector of Iran. Secondly, the paper also provides additional evidence that supports the role of imports and FDI as a channel of transmission of such spillover. This result therefore provided new evidence to the positive influence of FDI on productivity, suggesting, that the higher the technological capacity of the trading partners, the greater this influence will be. In addition, we obtained a very high relationship between FDI shares and the effect of technology spillovers on agricultural productivity.
