Agricultural Economics
E. Ahani; S. Ziaee; H. Mohammadi; M. Mardani Najafabadi; A. Mirzaei
Abstract
IntroductionWith the growing population of the world, water, food and energy supply will be one of the most important challenges ahead. Agriculture as the most important food producer is not only the consumer of water and energy, but also the most important supplier of energy. As a result, a balance ...
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IntroductionWith the growing population of the world, water, food and energy supply will be one of the most important challenges ahead. Agriculture as the most important food producer is not only the consumer of water and energy, but also the most important supplier of energy. As a result, a balance must be struck between harvesting and exploitation of production resources and the amount of agricultural production. Due to the close relationship between water-food-energy systems and also their interaction with each other, a new concept called the “nexus” approach has been proposed which refers to the integrated nature and interactions of water-food-energy planning. This approach has provided suitable options for political decision makers, managers and planners in order to conserve existing resources and achieve sustainable development.Material and MethodsIn this study, we have tried to introduce a mathematical programming model using multi-objective mathematical programming (MOP) technique for water-food-energy nexus that has the ability to process managerial decisions. In this model, in addition to examining the economic aspect, the control of greenhouse gas emissions has also been investigated. The regions of Mashhad, Chenaran and Torqabeh-Shandiz are the most important regions in the study area of Mashhad province in the production of crops. The data required for the study were collected through review of reports and agricultural statistical yearbooks of the year 2020-2021 and interviews with experts in each region and through consulting engineering companies. The hypothetical model under study includes lands covered by crops of Mashhad, Chenaran and Torqabeh-Shandiz. In this model, the water needed to irrigate crops is supplied from surface and groundwater sources. Electricity (electricity consumption) is used to collect and pump of irrigation water, produce food, and supply the domestic and industrial sectors. In the process of generating electricity, production of food, irrigation of crops and consumption of fertilizers and pesticides, greenhouse gases are emitted, especially CO2. In this study, 6 objectives including: maximizing gross profit, maximizing the production of calories from food, minimizing emission of greenhouse gases, minimizing consumption of fertilizers and pesticides, minimizing consumption of irrigation water, and minimizing consumption of energy have been pursued. Results and DiscussionThe results of the proposed model showed that the rate of change in the level of cultivation area in MOP compared to the current cultivation pattern in Mashhad, Chenaran and Torqabeh-Shandiz decreased by 25.92%, 53.05% and 55.88%, respectively. The level of optimal cultivation for barley in Mashhad in order to maximize net profit objective increased by 16934 hectares (46.71%) and its maximizing caloric production equal to 8484 ha, which has decreased compared to the current pattern (22%). The cultivation area of barley in minimum irrigation water consumption decreased by 10877 hectares (1.11%) and in other minimization objectives it changed to 12892 hectares which increased by 17% in Mashhad region. Wheat, barley, alfalfa, corn, sugar beet, tomato and potato have the highest decrease in cultivation area in the MOP among crops. The total area of optimal cultivation in the net profit maximization model of Mashhad, Chenaran and Torqabeh-Shandiz equal to 48639, 26027 and 75 hectares, which showed an increase of 41.4%, 11.61% and 55.8%, respectively. Furthermore, in the model aimed at minimizing energy, irrigation water, fertilizer, pesticide consumption, and greenhouse gas emissions, the recommended cultivation areas are as follows: 25,475 hectares for energy consumption, 15,954 hectares for irrigation water consumption, and 100 hectares each for fertilizer consumption, pesticide consumption, and greenhouse gas emissions. These figures clearly indicate the need to reduce the cultivation area dedicated to agricultural products that have a significant environmental impact. Consequently, it is crucial to alter the cultivation pattern and adopt a strategy that focuses on producing crops with a lower environmental impact. By implementing this strategy, the objective is to cultivate crops that require less energy, irrigation water, fertilizer, and pesticides, while also minimizing greenhouse gas emissions. This approach aims to mitigate the environmental footprint associated with agricultural practices. By reducing the cultivation area for crops that have high environmental effects and transitioning towards crops that have a lesser impact on the environment, it is possible to achieve a more sustainable and environmentally friendly agricultural system.ConclusionThe purpose of this study was to propose a nonlinear multi-objective mathematical programming model with water-food-energy nexus approach for crops in Mashhad province. In this study, in addition to economic relations, energy and environmental issues (greenhouse gas emissions) were also analyzed. The various components of the water-food-energy nexus, including energy supply planning, water supply and demand, food production, and control of greenhouse gas emissions, were modeled. The results showed that considering the MOP model based on economic and environmental objectives, the area under cultivation of wheat, barley, alfalfa, tomatoes, sugar beets and potatoes has significantly decreased. In other words, in order to achieve the objectives of maximum profit and minimum environmental impact, the area under wheat, barley, tomato, corn should be reduced and the area under cucumber, onion, potato and sugar beet should be increased. According to the results of this study, the following suggestions are presented:- Implementation of the proposed optimal model of water-food-energy nexus allows farmers to simultaneously maintain economic income, environmental considerations, optimal and sustainable consumption of resources (water-food-energy) to select and consider suitable policies. So, it will only be a sustainable policy if it can be built within the combined framework of water, food, energy and the environment. In order to minimize the emission of greenhouse gases and its damage to the environment, the area under cultivation of agricultural products that have high environmental impact should be reduced, and in contrast to changes in cultivation pattern, the strategy to produce crops with less impact. Therefore, by developing a cropping pattern model, the productivity of the production capacities of the agricultural sector can be maximized and at the same time the damages and destructive consequences of crop production can be reduced.
Sh. Zare; H. Mohammadi; M. Sabouhi
Abstract
Introduction Sustainable use of groundwater resources has been a concern of the past half century. Although a number of countries for many years have considered this issue, in Iran despite experts warning in the past two decades, recently has been highly regarded, especially by public officials. The ...
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Introduction Sustainable use of groundwater resources has been a concern of the past half century. Although a number of countries for many years have considered this issue, in Iran despite experts warning in the past two decades, recently has been highly regarded, especially by public officials. The use of modern irrigation systems by improving water distribution at the level of the farm and reduce the outflow of water from plant availability, improve irrigation efficiency but these systems increase evaporation and transpiration, and even in the event of a reduction of extraction water from wells, may not be effective in balance of the groundwater resources. The government of Islamic Republic of Iran, yearly pay a lot of subsidies (85% of total cost), to increase irrigation efficiency by equipping traditional culture to new irrigation systems. It may increase irrigation efficiency but may not improve balance of the groundwater resources. However, increasing irrigation efficiency in the process of conveyance, distribution, and application of water, improve groundwater balance, and reduce energy consumption, but costs, benefits and its impacts on balance of the groundwater resources are various in each step. so, technical and economic effects of each step and determining the priority of them, were the objectives of this study.
Materials and Methods In order to carry out this study, five cities include Mashhad, Sabzevar, Neyshabour, Torbat-e-jam and Torbat-e-heidarieh were selected. These areas are located in Khorasan Razavi in north east of Iran with average annual rain 200-250 millimeter. The mathematical relationships between extracted water from underground and surface resources and transfer it to farms as well as water influence to groundwater source and the rate of consumption in the fields and orchards were simulated in the excel spreadsheet. Data were collected by using questionnaires and interviews with farmers in the study area in the crop year 2012-2013. Additional data were collected from government documents in ministry of agriculture, energy and regional office. A multi scenario was simulated include 1-Increase the conveyance and distribution efficiency, CDE, to 95 % via transform dirty channel into the pipe. 2-Substitute pressurized irrigation systems instead of traditional system.3-Combining scenario one and two together. 4- Increasing irrigation application efficiency, IAE, to 75% in modern system in scenario three. 5-Increasing irrigation application efficiency, IAE, to 85% in modern systems in scenario three. 6- Execute scenario one and increasing area of irrigation modern systems to dual of initial forecast (only in Sabzevar until 1.5times). These scenarios also evaluated economically. In economic evaluation, increase of yield, between 10-40 percent as 4 scenarios separately, and reduce energy subsidies include increase power price to 2 times, and three kinds of cost price of power was considered.
Results and Discussion Average of CDE were obtained various between 57-78% in study area. The share of agricultural activity in reduce of groundwater source was 20% and most of area was encountered with low irrigation in warm seasons until to 50%. The most impact in creating balance in groundwater resources belonged to increase of CDE by first scenario and was quite economical. The most reduction on groundwater deficit can happen by scenario 5. However, in Torbat-e-jam and Torbat-e-heidarieh, groundwater deficit will continue unless the culture areas are reduced. Increasing IAE, is more effective than developing culture area of the pressurized irrigation systems, CAPIS, for example, in Sabzvar, increasing of IAE by 12% (scenario four), will reduce groundwater deficit 164% but increasing CAPIS, to 50%( scenario 6), will reduce groundwater deficit only 113%. Increasing CAPIS, with 30% increase in yield, make scenario three economical, but increase electrical energy and so, increase national cost by increasing subsidy of energy. First scenario, reduce consumption of electric power, so its benefit cost ratio will increase because reduce government cost but scenario two, increase consumed electrical energy. In the Sabzevar city power consumption in the first scenario was more than 176 million Kilowatt, which reduces farmers' spending by more than 23 billion IRR, But in the second scenario, energy consumption is rising by more than 25 million kilowatts. So, its benefit cost ratio will decrease if government reduce power subsidy. As a result, this scenario without increase of IAE and yield, will not be economical. In all city except Sabzevar with the increasing yield by 20 percent, all scenarios will be economical, also in all city, with omission of the power subsidy, scenario 2 will be uneconomical, so the government is forced to grant subsidies to expand new irrigation systems. The city of Sabzevar, which has the longest route for pipelines (about 42%), requires an initial investment of 695 billion rials, with investment of 1079 billion IRR needed to equip 15342 hectares of land to modern systems. Therefore, the first scenario, although having more economic benefits, requires a relatively small amount of investment as well. Regarding the energy cost of between 680 and 7300 Rls, a number of government payments with the implementation of the first scenario is reduced from 96 to 1263 billion rials yearly, while the total initial capital required to realization of the goal is 695 billion rials, which is estimated at 70 billion rials, annually.
Replacing the irrigation modern systems instead of traditional systems without reducing the gap between the current and potential IAE, had a little impact on the groundwater balance, and to consider energy subsidies, is in conflict to national benefits.
Conclusions Installation of volumetric meters and tubing for water transmission and distribution channels should be used in preference to increase the efficiency of irrigation, reduce energy consumption and water extraction from wells, protection of saving water, and prevention of increase in cultivation. In order to increase the water application efficiency and production, implementation of modern irrigation systems on farms and gardens should be accompanied by adequate supervision and training.
S.M. Fahimifard; M. Salarpour; M. Ahmadpour Borazjani; H. Mohammadi; M. Sanaei
Abstract
Introduction: Stock shortage is one of the development impasses in developing countries and trough it the agriculture sector has faced with the most limitation. The share of Iran’s agricultural sector from total investments after the Islamic revolution (1979) has been just 5.5 percent. This fact causes ...
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Introduction: Stock shortage is one of the development impasses in developing countries and trough it the agriculture sector has faced with the most limitation. The share of Iran’s agricultural sector from total investments after the Islamic revolution (1979) has been just 5.5 percent. This fact causes low efficiency in Iran’s agriculture sector. For instance per each 1 cubic meter of water in Iran’s agriculture sector, less that 1 kilogram dry food produced and each Iranian farmer achieves less annual income and has less mechanization in comparison with similar countries in Iran’s 1404 perspective document. Therefore, it is clear that increasing investment in agriculture sector, optimize the budget allocation for this sector is mandatory however has not been adequately and scientifically revised until now. Thus, in this research optimum budget allocation of Iran- Khorasan Razavi province agriculture sector was modeled.
Materials and Methods: In order to model the optimum budget allocation of Khorasan Razavi province’s agriculture sector at first optimum budget allocation between agriculture programs was modeled with compounding three indexes: 1. Analyzing the priorities of Khorasan Razavi province’s agriculture sector experts with the application of Analytical Hierarchy Process (AHP), 2. The average share of agriculture sector programs from 4th country’s development program for Khorasan Razavi province’s agriculture sector, and 3.The average share of agriculture sector programs from 5th country’s development program for Khorasan Razavi province’s agriculture sector. Then, using Delphi technique potential indexes of each program was determined. After that, determined potential indexes were weighted using Analytical Hierarchy Process (AHP) and finally, using numerical taxonomy model to optimize allocation of the program’s budget between cities based on two scenarios. Required data, also was gathered from the budget and planning office of Khorasan Razavi’s Jahad Keshavarzi organization during 2006-2015. They were collected through distributed binary comparison questionnaires related to AHP model between Khorasan Razavi’s agricultural experts in 2015 and distributed questionnaires related to Delphi technique between Khorasan Razavi’s agricultural experts in 2015. Indeed, Super decision and Taxonomy software were applied to analyze the gathered data.
Results and Discussion: Results of budget allocation of Khorasan Razavi province’s agriculture sector using three mentioned indexes showed that between 8 programs, P1 and P6 have the most and least share, respectively. The results of the Delphi technique for determining potential indexes of between cities budget allocation of agriculture sector programs indicated that totally there are 62 indexes. Findings of between cities budget allocation of agriculture sector programs showed that for budget allocation of P1 based on 1 and 2 scenarios, Kalat and Davarzan cities have the most and least share, respectively and vice versa. For budget allocation of P2 based on 1 and 2 scenarios, Bardaskan and Kalat cities have the most and least share, respectively and vice versa. For budget allocation of P3 based on 1 and 2 scenarios, Mashhad and Joghatai cities have the most and least share, respectively and vice versa. For budget allocation of P4 based on 1 and 2 scenarios, Jovein and Torghabe Shandiz cities have the most and least share, respectively and vice versa. For budget allocation of P5 based on 1 and 2 scenarios, Chenaran and Neishabour cities have the most and least share, respectively and vice versa. For budget allocation of P6 based on 1 and 2 scenarios, Mashhad and Khoushab cities have the most and least share, respectively and vice versa. For budget allocation of P7 based on 1 and 2 scenarios, Neishabour and Saleh Abad cities have the most and least share, respectively and vice versa. Finally, for budget allocation of P8 based on 1 and 2 scenarios, Neishabour and Khoushab cities have the most and least share, respectively and vice versa.
Conclusion: The study concludes that the agriculture sector budget of Khorasan Razavi Province’s has not been allocated optimally. Therefore, paying attention to this fact that agriculture sector budget allocation which carried out previously between various programs, have been provided different instructions for opposite ideas always caused to challenge between beneficiary groups. This study provided a scientific and comprehensive model for budget allocation of agriculture sector between programs and cities using agriculture experts, and can be suggested to governors and Jahad Keshavarzi organizations to apply the results.
H. Tamidy; H. Mohammadi; D. Seify Gharhitaq; V. Dehbashi
Abstract
Introduction: Risk is an essential component in the production and sale of agricultural products. Due to the nature of agricultural products, the people who act in this area including farmers and businesspersons encounter unpredictable fluctuations of prices. On the other hand, the firms that process ...
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Introduction: Risk is an essential component in the production and sale of agricultural products. Due to the nature of agricultural products, the people who act in this area including farmers and businesspersons encounter unpredictable fluctuations of prices. On the other hand, the firms that process agricultural products also face fluctuation of price of agricultural inputs. Given that the Canola is considered as one of the inputs of product processing factories, control of unpredictable fluctuations of the price of this product would increase the possibility of correct decision making for farmers and managers of food processing industries. The best available tool for control and management of the price risk is the use of future markets and options. It is evident that the pricing is the main pillar in every trade. Therefore, offering a fair price for the options will be very important. In fact, options trading in the options market create cost insurance stopped. In this way, which can reduce the risks of deflation created in the future, if the person entitled to the benefits of the price increase occurs in the future. Unlike the futures, market where the seller had to deliver the product on time, in the options market, there is no such compulsion. In addition, this is one of the strengths of this option contract, because if there is not enough product for delivery to the futures market as result of chilling, in due course, the farmers suffer, but in the options market there will be a loss. In this study, the setup options of rape, as a product, as well as inputs has been paid for industry.
Materials and Methods: In this section. The selection criteria of the disposal of asset base for valuation of European put options and call option is been introduced. That for obtain this purpose, some characteristics of the goods must considered:
1-Unpredictable fluctuations price of underlying asset
2 -large underlying asset cash market
3- The possibility of standardizing the underlying asset
4- Impossibility of creating cross supply of the underlying asset
In addition, after the introduction of the model parameters, we offers method calculating of the volatility (standard deviation) price with using historical data (time series). Parameters of Blk- Scholes model are introduced and option contract of selected product will pricing. After effect of the rise and fall agreement prices (in the form of 9-defined scenario) on the price of put option and sales option are studied.
In this study, after forming the hypothetical option market for the Canola, option pricing is done. In this section, the criteria for selecting an appropriate asset base is expressed for option contract. The Black–Scholes model is introduced for the valuation of call option and European put option contract. After introducing the model parameters, the calculation of volatility (standard deviation) of price using historical data (time series) is presented .To achieve this aim, the Black – Scholes model was used under 9 strike price scenario of 5, 10, 15, 20 percent above; 5, 10, 15, and 20 percent lower and finally equal to current prices. This model was run in Excel 2010 and Derivea gem 1.5.
Results and Discussion: The results showed 43% price volatility for canola that reflects uncertainty in its price. In the next stage of pricing, the purchase and sale of the selected product was done under the nine price scenarios. The results showed that the highest authority to purchase option was for scenario K1 and the highest buy option was for the K9 scenario. The least expensive buy option is K9 and the least expensive sell option is K1.
Conclusion: The results show that the increase of strike price under these scenarios leads to a decrease of call option price and decrease of put option price. In addition, the farmers, businesspersons and agricultural products transforming factories with a different degree of risk disclosure can participate in these markets proportional to their needs for covering the risk
Farmers with various degrees of risk involved in this market Thus , people with a higher risk, are seeking the to pay less right of option and in turn, receive less coverage. Similarly, farmers with less risk-averse, demand pay to higher right of options for themselves cover against the risk of price in future.
Keywords: Option Market, Call Options, Put Options, Canola
H. Mohammadi; M. Sabouhi; A.A. Keikha; Z. Farajzadeh
Abstract
AbstractFars province with a share of more than 16 percent holds the highest rank in producing tomato in Iran. This study aims at determining priorities for tomato processing centers in Fars province’s townships. To achieve the study objective a distance minimizing pattern was used for transportation ...
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AbstractFars province with a share of more than 16 percent holds the highest rank in producing tomato in Iran. This study aims at determining priorities for tomato processing centers in Fars province’s townships. To achieve the study objective a distance minimizing pattern was used for transportation network between producing and processing centers as well as processing and consumption centers. A part of the study data was collected using questionnaires completed by processing centers in 2009. The other part of the study data was obtained from the Iranian Agriculture Ministry website. Using the marginal distance measured by the optimal solution model, an average distance was calculated for paths ending in each township. The study findings revealed that paths ending in townships of Marvdasht, Shiraz, Pasargad, Eqlid and Khorrambid lead to the lowest increase in total transferring. It was also found that the distance from consumption centers is important in determining the priority of townships, and hence the northern townships of Fars province have more suitable position to establish new processing centers. JEL classification: C61, L91, Q13, R32