Agricultural Economics
reza heydari; Ebrahim Javdan; Mehdi Shabanzadeh-Khoshrody
Abstract
Introduction
Food prices are an important indicator of societal well-being, and food inflation can deepen poverty in developing economies. Severe food price fluctuations not only affect food security in developing countries, but also affect economic growth and social stability. Any increase in food prices ...
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Introduction
Food prices are an important indicator of societal well-being, and food inflation can deepen poverty in developing economies. Severe food price fluctuations not only affect food security in developing countries, but also affect economic growth and social stability. Any increase in food prices can push many people back below the poverty line. Rising food prices hit low-income households hard, as the household food basket accounts for nearly half of household living expenses. Therefore, food price stability is of particular importance to policymakers trying to lift households above the poverty line. Food prices in Iran have always been on the rise, and even in recent years, the rate of food price growth has accelerated. Today, inflation, especially food inflation, remains a major problem in Iran, and policymakers are always trying to reduce food inflation. In this regard, and with the aim of controlling food prices, different policies have been implemented in Iran, and the effectiveness of these policies has been discussed. Therefore, understanding the behavior of food prices in response to macroeconomic factors is essential for policymakers to implement appropriate policies at the right time and place to keep domestic prices stable. In this regard, in the present study, the asymmetric effect of macroeconomic variables (money supply, GDP per capita, exchange rate, and trade openness) affecting food inflation in Iran is examined using the nonlinear ARDL approach.
Materials and Methods
The main objective of this study is to examine the asymmetric effect of domestic macroeconomic factors on food prices in Iran using a Non-linear Autoregressive Distributed Lag (NARDL) model. According to the theoretical literature, in this study, it is assumed that food prices are a function of macroeconomic variables, including money supply (MS), GDP per capita (GDPER), exchange rate (RATE), trade openness (OPEN), and global economic policy uncertainty index (EPU). Therefore, in accordance with Shin et al. (2014), the NARDL model used in this study is developed to examine the asymmetric effect of domestic macroeconomic factors.
In this relationship, each of the macroeconomic factors (including the money supply, GDP per capita, exchange rate, and trade openness) is separated into the sum of positive and negative components. In fact, two additional variables are created in each equation, one indicating an increase in the variable of interest with a positive sign and the other indicating a decrease with a negative sign. The variable of global economic policy uncertainty index also plays the role of a control variable. Due to the availability of data, the time period in this study is 1991 to 2022.
Results and Discussion
The results of the linear and nonlinear bounds test in the ARDL model showed that there is a long-term relationship between macroeconomic variables including money supply, GDP per capita, exchange rate, trade openness, global economic policy uncertainty and food prices in Iran. In addition, the results of short-term and long-term symmetry tests using the Wald test showed that the effect of the exchange rate variable on food inflation in Iran is asymmetric in the long and short run, while the effect of the money supply and GDP per capita variables is asymmetric only in the long run; the effect of the trade openness variable is also symmetric in the short and long run and has a linear behavior. The results of the ARDL linear model estimation showed that in the short and long run, the effect of the growth of the variables of money supply, GDP per capita, exchange rate and global economic policy uncertainty on food inflation in Iran is positive and significant, while the effect of trade openness is negative and significant. The results of the NARDL model estimation also showed that the response of food inflation to increases and decreases in money supply and GDP growth is positive and significant, and their increase on food inflation is greater than the effect of their decrease. The response of food inflation in the long and short term to increases in the exchange rate is positive and significant, while the effect of decreasing the exchange rate in the long and short term is negative, but not statistically significant, and the effect of increasing the exchange rate on food inflation in the long term is greater than its effect in the short term. The effect of the variable of trade openness on food inflation is symmetric, and its increase causes a decrease in food inflation in the long and short term.
Conclusions
Linking the prices of agricultural products to market conditions and liberalizing the market for these products is an appropriate method for coordinating the effects of macro policies and specific agricultural policies that should be considered by policymakers. Given the importance of the agricultural sector, the government's economic policies in relation to food prices will be of high importance and sensitivity. Considering the results of implementing contractionary monetary policies in coordination with other Central Bank policies, increasing investment and efforts to increase productivity in the agricultural sector, appropriate foreign exchange policies are recommended to prevent unreasonable increases in the exchange rate, and reducing tariffs and trade restrictions to increase trade openness.
Agricultural Economics
M. Shabanzadeh-Khoshrody; E. Javdan; K. Shemshadi
Abstract
IntroductionDuring the last decade, due to the increase in food prices, the cost of a healthy diet in Iran has greatly increased. Although the government's support policies have aimed at improving the living conditions of households, but the cost and income information of the Iranian Statistics Center ...
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IntroductionDuring the last decade, due to the increase in food prices, the cost of a healthy diet in Iran has greatly increased. Although the government's support policies have aimed at improving the living conditions of households, but the cost and income information of the Iranian Statistics Center shows that due to inflationary conditions and its impact on real income and purchasing power of consumers, these programs have not had the necessary effect in reducing poverty and food insecurity. Reducing poverty and increasing the food security index is a requirement for independent countries like Iran. In this regard, knowing the current situation of poverty, food insecurity and factors influencing it, is not only the main condition for preparing future plans, but is necessary to continue this work with the aim of monitoring and evaluating the results of implemented plans and actions. Materials and MethodsIn the present study, the spatial distribution of poverty and food insecurity in the urban areas of Iran in 1401 has been investigated and then the factors affecting food insecurity have been identified. In order to achieve these goals, the nutritional performance matrix was drawn and calculated per capita calories in 1401 using the household income-expenditure information of Iran Statistics Center. The Aggregate Household Food Security Index (AHFSI) and the Foster, Greere and Thorbeke (FGT) poverty index were calculated and based on these indices, the spatial distribution of poverty and food insecurity in urban areas of Iran was analyzed. Finally, the impact of economic and demographic variables on food insecurity was analyzed in the framework of the logit model. Results and DiscussionAccording to the results, the urban areas of the country are in low food security conditions; so that, only 45% of people have food security and about 55% of the residents of urban areas are either facing food insecurity or are on the border of food insecurity. On the other hand, the per capita calorie intake in the urban areas of the country is 2540 kcal, and generally these calories are supplied from cereals. In addition, there is inequality in the intake of calories in different provinces of the country, and the average intake of calories varies between 1988-3196 kcal among the provinces. Examining the status of food poverty indicators also shows that the average head count, gap and intensity of poverty in urban areas are 55.1%, 15.2% and 6% respectively. Based on these indicators, it can be said that 55.1% of the population of the urban areas of the country had food poverty in 1401 and the calorie intake of the poor households in these areas was 15.2% less than the minimum required daily calories; therefore, to eliminate poverty, the caloric intake of poor households should be increased by 15.2%. Finally, the results of the logit model estimation showed that the variables of age, employment status, working hours of the head of the household, subsidy, income and food diversity have a positive and significant effect on the food security of the households, but the Family size has a negative effect on the food security. In addition, the two variables gender and literacy of the head of the household did not have a significant effect on the food security in urban areas of Iran. ConclusionIn this regard, although the long-term solution is to increase household purchasing power, stabilize and reduce commodity prices through strengthening production and supply, but in the short-term, increasing salaries and wages in line with the inflation rate and increasing social support programs for the low income deciels and weak society should be taken into consideration. In other words, income policies that can directly or indirectly increase the level of income and thus the purchasing power of the household, can be considered as a scientific and effective solution for food security. Moreover, the social support and poverty alleviation programs should be targeted and applied according to the needs and deficiencies in different geographical, demographic and income conditions. Finally, it should be acknowledged that improving the nutritional literacy of households can increase the nutritional knowledge and awareness of households, and therefore, by improving the variety and quality of the food they consume, it can lead to an increase in food security in urban areas of Iran.
Agricultural Economics
M. Shabanzadeh-Khoshrody; E. Javdan; M. Rafaati
Abstract
Introduction Dietary diversity is a feature of healthy diets. This is because essential nutrients are not present in one type of food at the same time, rather, they are found in a diet consisting of several nutrients. However, in recent years, the food tastes of Iranian families have shifted to ...
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Introduction Dietary diversity is a feature of healthy diets. This is because essential nutrients are not present in one type of food at the same time, rather, they are found in a diet consisting of several nutrients. However, in recent years, the food tastes of Iranian families have shifted to high-calorie and non-nutritional value foods, which has increased the number of patients with non-communicable diseases in the country. The choice and acceptance of different diets depends on environmental, economic, socio-cultural and psychological factors.Materials and Methods Since ensuring health and food security is one of the strategic goals of the country 20-year vision document, the present study evaluates the dietary diversity of households and its effective factors in Tehran province. To achieve this goal, the raw information of household expenditure-income in 2020 has been used. In the present study, the Berry dietary diversity index (BI) was used to quantify the dietary diversity variable and the order logit model was used to investigate and evaluate the effect of demographic, economic and social variables on it. Results and Discussion The results showed that only 23.2% of Tehran households have high dietary diversity and 76.8% of households have low or medium dietary diversity. Based on the results, the variables of head household age, place of residence, working hours of household head and household income level has a positive (direct) association and in contrast, the variables of head of household literacy, household size and employment status of head of household in a negative (inverse) direction affect the level of dietary diversity of households in Tehran province.Conclusion The food diversity of households in Tehran province is very low. If the food price level is low and stable, increasing incomes can lead consumers to diversify their food baskets and move from consuming low-value cereals and root and tuber products to consuming high-nutrition foods such as meat, dairy, and fruits and vegetables. In this regard, a review of the experience of many European, Latin American and Asian countries shows that stability in food prices along with cash aid and targeted food packages can increase consumption and food diversity of households and food security in poor households, especially women and children. Families living in Tehran province, which have a larger population, have less food diversity. As the household dimension increases, the minimum food needs increase; this reduces the volume and quality of food available to the household and leads to food insecurity. In the current situation, the country is struggling with economic problems caused by sanctions, inflation, unemployment. Continuation of this, along with lack of effective support for families, can deprive families of the ability and facilities to have more children due to food insecurity. Accordingly, the correct and complete design and implementation of incentive policies and support for large families is necessary. Finally, the role and importance of education and literacy of households in their food diversity is very high. In this regard, responsible organizations can play an important role in obtaining, processing and understanding nutrition information and how to access credible information sources through culture and specialized and general training in food literacy.
Agricultural Economics
M. Rafaati; M. Shabanzadeh-Khoshrody; E. Javdan
Abstract
Introduction: The rapid acceleration of inflation over the past decade has increased the cost of living in the metropolitan area of Tehran. The World Food Program (WFP) report shows that Tehran province has the highest rate of welfare inequality compared to other provinces in Iran, and a significant ...
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Introduction: The rapid acceleration of inflation over the past decade has increased the cost of living in the metropolitan area of Tehran. The World Food Program (WFP) report shows that Tehran province has the highest rate of welfare inequality compared to other provinces in Iran, and a significant portion of the province's population has only abdominal satiety. This has led to an increase in short stature, cardiovascular disease, cancer, obesity, diabetes, tooth decay and gastrointestinal diseases among Tehran families. In this regard, although with the decision of the Working Group on Health and Food Security and the participation of various agencies, programs have been carried out to improve the level of health and nutrition of the residents of the province, but the prevalence of various deficiencies and diseases may be due to lack of nutrients in the food basket and as a result of food insecurity.Materials and Methods: Since ensuring health and food security is one of the strategic goals of the 20-year vision document of the country, in the present study, households living in Tehran province were first divided into three lower income deciles, four middle deciles and three upper income deciles according to the raw data of the income expenditure of the Statistics Center of Iran. Then based on the classification of the commodity group of the Statistics Center of Iran and using the nutritional performance matrix, the level of nutrient intake in different income deciles of Tehran province in 2018 has been investigated. Then, using the Matching method, nutrient consumption, the diversity and food security of the province's income deciles have been analyzed.Results and Discussion: The results showed that the level of calcium, iron and vitamin C intake among households in the lower three deciles of Tehran province is very low and an adult received only about 14, 487 and 75 mg of these three nutrients per day. As for other nutrients, an adult in the lower three deciles of income received protein and vitamin A 72 mg and 551 micrograms, respectively which is at the minimum daily requirement and only carbohydrates and vitamin B1 has been received 339 g and 1.5 mg, respectively which is above the minimum daily requirement. It should be noted that in all income deciles, the level of carbohydrate intake is more than triple the daily threshold required by an adult (130 g). Finally, according to the results, the lower three deciles of income have lower diversity and food security than the other deciles.Conclusion: Considering the current situation of receiving micronutrients in Tehran province, the culture and nutritional literacy of households has a great importance and role that responsible organizations can play an important role in promoting it through culture as well as specialized and general education. At the same time, the stability of food prices along with the provision of cash grants and targeted food packages can increase the consumption and food diversity of households and significantly increase food security in poor households, especially women and children. In this regard, considering that a significant part of the country's resources is wasted annually in the form of hidden and non-targeted subsidies, Iran ranks first in the world in the payment of non-targeted food and fuel subsidies, therefore, targeting subsidies and paying cash and non-cash subsidies with proper identification of the target community, in accordance with the conditions of the country is an important issue that should be considered by policy makers.
M. Shabanzadeh-Khoshrody; A. Mahmoodi
Abstract
Introduction: Fruit and nuts, all kinds of vegetables, legumes and vegetable products, including commodity baskets with high proportion of nutritive value, are of great importance for policymakers of the agricultural sector. Therefore, the study of the conditions and factors affecting the demand for ...
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Introduction: Fruit and nuts, all kinds of vegetables, legumes and vegetable products, including commodity baskets with high proportion of nutritive value, are of great importance for policymakers of the agricultural sector. Therefore, the study of the conditions and factors affecting the demand for these goods can be predisposing advice to control the market and other factors affecting their use. But when it comes to the country at macro level of household demand, the aggregate commodity group beomes important. In cases where it is necessary to apply the fruits or vegetables as a function of household aggregation of a group of goods to be estimated, it is necessary a group of products with the scientific method to get aggregate and form a group variable as fruits or vegetables are included in the econometric model. Therefore, due to problems such as lack of access to information on each product separately, the high cost of collecting the data, missing observations, multicollinearity problem and limited degrees of freedom, we have to use grouping and composite commodities. But it is important that the correct grouping and consistent is made because of incorrect Aggregation, as specified in the error term appears on demand system estimated and Lead to biased estimation of the values of parameters and elasticity's, Which results in an incorrect picture of consumer behavior. Study of composite conditions of Agricultural commodities, as an important topic in economics, had been considered. Because mostly, access to disaggregate of the goods is not possible, and other problems such as multicollinearity occurs by examining the separation in the econometrics model. Study of composite conditions of Agricultural commodities, as an important topic in economics, had been considered. Due to its importance in the study, condition of Aggregation fruit and nuts, all kinds of vegetables and Bean (legumes) are using Generalized Composite Commodity Theorem (GCCT) is investigated.
Materials and Methods: Many efforts have been made by Economists to the necessary conditions for the validity of the Aggregation submitted. The first step was taken by Hicks with proposing a theory of composite commodities. Based on this theory, the goods can be placed in a group and form a single product, they must be equal to the ratio of their prices change over time. In other words, relative prices remain constant. Separability in production and Consumption theory, respectively by Leon Leontief and Sano also attempt to provide the necessary conditions have been aggregation among the goods. Based on this theory, inputs can be in a group that Marginal rate of substitution (MRS) between each pair of these inputs in a group independent from a separate group from the group. Blackorby and colleagues show that the dual condition of the license is limited to the aggregation of the products it provides. Lewbel (1996), the third method called generalized composite commodities theory (GCCT) is provided. Unlike the theory of Separability, do not apply any restrictions on the production technology, and it was for this reason that Lewbel was named the aggregation without separability. According to Lewbel theory, all products which those relative price index is independent group's index, can be classified in a group.Information needed as monthly statistics were collected from the central bank for the period 1383-1391.
Results and Discussion: The results of this study indicates that fruit and nuts, with respect to meeting the test requirements GCCT, fruit trees, cucurbit fruits and dried fruit can be considered as three aggregate groups; And furthermore, these three groups can be aggregated as a fruit and dried fruit group. Also Leaf vegetables, vegetables shrub, and bean (legumes) can be considered as aggregate of four groups, can be considered as four aggregate groups; furthermore, these four groups can be aggregate as a fruit ans dried fruit group; In addition with two kinds of fresh vegetables and vegetable products As a composite group can be considered.
Conclusion: Therefore economic studies have been conducted by using grouping by the Central Bank can be performed, using these Aggregated indices, and the results can be reliable and valid.
M. Shabanzadeh-Khoshrody; A. Mahmoodi; R. Esfanjari Kenari
Abstract
Introduction: Agriculture as one of old sectors of economy has been important role in the supply food for peoples and raw materials. Globalization causes rapid growth of world trade and reduces information and communications costs. Globalization and rapid growth of trade increases the potential benefits ...
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Introduction: Agriculture as one of old sectors of economy has been important role in the supply food for peoples and raw materials. Globalization causes rapid growth of world trade and reduces information and communications costs. Globalization and rapid growth of trade increases the potential benefits of trade for agriculture from various aspects. The potential benefits of trade for agriculture increases from three aspects. Direct increase in the domain of agricultural sector activities for competition in the global market results in the benefits of access to global markets. This is especially true in cases where there is comparative advantage and the indirect effects of increased global trade on non-agricultural sectors that cause the domestic demand for food change from qualitative and quantitative aspects, are the benefits of this event. However, during the process of globalization, how to influence prices in different markets, including the impact of world prices on domestic prices is an important issue in trade policy analysis. During this process domestic prices are directly related to world prices. With this approach, the main objective of this study is to examine the effect of world price transfers to domestic markets for sensitive and certain agricultural products in Iran during 1360-91.
Materials and Methods: To achieve this goal in this study, the Armington and the foreign currency elasticity of ten selected agricultural products in Iran including wheat, barley, rice, corn, soybean meal, vegetable oil (soybean and sunflower), sugar, eggs, poultry and beef, have been estimated and examined using Autoregressive Distribution lag Model (ARDL). In order to investigate speed of adjustment or in other words the speed of movement towards equilibrium, typically the error correction model (ECM) is used. Existence of cointegration or in other words, long term relationship between a set of economic variables provide the basis for the use of error correction model. In fact, error correction model links the short term fluctuations of the variables to their long term equilibrium values and shows adjustment speed and long term movement towards equilibrium.
Results and Discussion: The results of the present study show transfer of the world price fluctuations to the domestic market in the long run is more than in the short run. Moreover, if the products face a gap in domestic demand, and the local production is so limited that it cannot limit the import of that product, the products would be more affected by fluctuations in world prices. The results of ECM model reveal that the speed of adjustment towards long run equilibrium for most products is low such that if the shock enters the market of each product a long time is required for correcting the short-run and long-run imbalance equilibrium and bring it back to the first equilibrium.
Conclusion: The results showed that most of the crops under review (e.g. corn) face with the low gap of demand and the ability of domestic production in limiting the imports is low. Therefore, a significant portion of these products are imported from abroad. Given that the country is faced with a crisis of drought and water shortage problems, the price policies cannot eliminate this problem and help stabilize the market by encouraging increased production Thus, they lead to increased demand for imports. Under such circumstances, the only way to increase production in the country is enhancement of productivity in the agricultural sector. Of course, this is only possible in the long run. For products such as rice and meat the elasticity of substitution of domestic production with imports is small. In other words, if a policy is adopted that results in an increase in the price of these products, the share of these products of the total imports does not increase that much in comparison with other products. To support these products, policies can be used such as import tariffs in the short run. Since in the ECM model for the majority of products, the adjustment speed or the speed to move to the long-run equilibrium is slow, it is necessary to consider the harmful effects and consequences of shocks in the economy. Because if a shock is entered into the model, to correct the imbalance between short-run and long-run equilibrium and come back to long-run equilibrium needs a long time.
Keywords: Armington Elasticity, Autoregressive Distribution lags Model (ARDL), Currency Elasticity, Price Transfer