Agricultural Economics
Gh. Layani; S. Mehrjou
Abstract
Introduction Despite the positive effects of the liberalization of economic activity around the world, the Iranian government still has a major share in the country's economy. However, almost all economists agree on the low efficiency of government economic activities. Restricting government involvement ...
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Introduction Despite the positive effects of the liberalization of economic activity around the world, the Iranian government still has a major share in the country's economy. However, almost all economists agree on the low efficiency of government economic activities. Restricting government involvement in these activities is a move that has been proposed and pursued by the World Bank and other global economic organizations, especially in recent decades. One of the policies recently proposed to reduce government interference in the Iranian economy is the elimination of 42,000 Rials in the country. But reducing government interference in agricultural activities can have many positive and negative effects. One of these effects could be rising food prices. In recent years, the frequency of large food price increases has accelerated around the world. Due to the dramatic changes in food prices, there have been numerous studies postulated that the exchange rate and crude oil price instability are the main determinant of the food price crises in different countries. The exchange rate is at the center of the policy debate in both developed and developing economies. Therefore, the purpose of this study is to investigate the asymmetric effects of exchange rate changes on food price fluctuations in Iran. For this reason, the NARDL approach has been used.Materials and Methods Due to the possibilities of asymmetric impact exits between the underlying variables (exchange rate and food price), the asymmetric Non-linear Unrestricted ARDL proposed by Shin et al. (2014) is widely used by the researchers, such as Ibrahim (2015) and Abdlaziz et al. (2016). The main purpose of this test was to test for the presence asymmetric effects in both long- and short-run relationships between economic time-series. Shin et al. (2014) applied the positive and negative partial sum decompositions to test the asymmetric effects. This asymmetric Unrestricted ARDL cointegration approach which allows the joint analysis of non-stationarity and non-linearity issues in the context of an unrestricted error correction model (ECM). In this study, in order to investigate the asymmetric effects of currency shock on food prices, the model introduced in the study of Wong and Shamsdin (2017) was used: Results and DiscussionThe findings of the study indicate several important relationships between key variables (oil price, per capita GDP, exchange rate, and trade liberalization) and food prices in Iran. Firstly, the study reveals that these variables exhibit long-run cointegration with food prices, suggesting a significant relationship between them. Secondly, the Unrestricted NARDL model demonstrates that exchange rates have a significant long-run asymmetric impact on food price changes in Iran. This implies that changes in the exchange rate can have a varying effect on food prices, depending on whether the exchange rate is appreciating or depreciating. Thirdly, the study finds that while long-run and short-run changes in oil prices do not have a significant impact on food prices in Iran, the long-run growth of per capita GDP and trade liberalization do have a significant impact on food price fluctuations. Specifically, the coefficients of the exchange rate variables indicate that a 1 percent increase in the exchange rate results in a 0.32 percent increase in the consumer food price index and a 1.05 percent increase in the producer food price index in the long run. The asymmetric impact of the exchange rate on Iranian food price fluctuations suggests that policymakers should prioritize stabilizing the national currency to manage the movement of food prices. This implies that economic policymakers, who aim to reduce inflation, protect vulnerable populations, and ensure food security, need to consider currency stability in their decision-making process. In addition to price liberalization, supportive policies should be implemented to prevent economic barriers to accessing food. Overall, these findings highlight the importance of understanding the relationships between key economic variables and food prices in Iran, and the need for policymakers to take these factors into account when making decisions regarding inflation, food security, and supporting vulnerable populations.ConclusionIn this study, the focus was on investigating the asymmetric impact of oil price, real GDP, and exchange rates on food price fluctuations in Malaysia. The findings revealed that the exchange rate had a significant asymmetric effect on the movement of food prices, indicating its importance in understanding the current food market situation in Iran. This suggests that policymakers should prioritize addressing exchange rate issues rather than solely focusing on crude oil prices when formulating food price policies. The study emphasizes that stabilizing the national currency is of greater importance than controlling oil prices, as demonstrated by the research findings. Rising food prices have a detrimental impact on the economic access of vulnerable groups to sufficient food and pose a significant threat to food security. Therefore, it is recommended to pay attention to the positive relationship between increasing exchange rates and agricultural product prices. In the short term, it is essential to implement supportive policies to prevent a reduction in economic access to food. These policies should aim to address the challenges faced by vulnerable groups in accessing affordable food. By taking these measures, policymakers can mitigate the negative consequences of rising food prices and ensure food security for all.
Gh. Layani; M. Bakhshoodeh; z. Ahmadikia
Abstract
Introduction: Off-farm activities have become an important component of livelihood strategies among rural households in most developing countries. According to available evidence, off-farm income is an important source of income for most rural households, which is important for economic, governmental ...
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Introduction: Off-farm activities have become an important component of livelihood strategies among rural households in most developing countries. According to available evidence, off-farm income is an important source of income for most rural households, which is important for economic, governmental and nongovernmental organizations, and international representatives of development and advancement. Several studies have reported a substantial and increasing share of off-farm income in total household income. Reasons for this observed income diversification includes declining farm income and the desire to insure against agricultural production and market risks. Non-agricultural activities, which are referred to as off-farm activities, are part of the rural economic sector, which is essential for improvement and assistance that can be referred to as an economic incentive for activities as well as field activities. Due to the development of off-farm activities in rural areas, its share of income has slowly increased and off-farm incomes appear as a contributing factor to the flow of income, which is due to its low income variation. Off-farm activity is a factor in creating diversity in activities and strategies to increase incomes, especially in the time of farm production decline among rural households. Using the theory of time allocation of households, \ incentives to allocate time to out-of-field activities, which not only relate to wage factors but also family structure and individual preferences, are identified.Materials and Methods: In order to investigate the effect of various factors on having an off-farm activity, regression models with a dummy dependent variable are required. Farmers' time allocation to different activity is a function of some variables, such as individual, regional and family characteristics. The model used in the present study is as follows: In which the dependent variable is a multiple choice that in this study shows employment in various activities including agriculture, activities related to agriculture and non-agricultural activities. The multinomial logit model was used to investigate the factors affecting the time allocation of farmers in Marvdasht. Another objective of the present study is to answer the question of whether off-farm activity will increase or decrease income inequality. To measure the inequality created by each source of income, the income-resource variance was used. The percentage of total inequality decomposition is obtained from the following formula. It shows the extent to which inequality is created for each source of income. Results and Discussion: Based on the results, comparing the results of the Logit model and the multinomial logit model indicate that the type of non-agricultural activities is important in the allocation of time and the establishment of various policies for the development of off-farm activities. The level of education has a positive effect on off-field employment due to its effect on creating more job opportunities for individuals. The amount of land owned by the farmer was another important factor in the implementing off-farm activities unrelated to agriculture. According to the results in Marvdasht County, variables such as age, education, livestock breeding, number of extension classes, number of dependent persons, household expenses, expenditure to agricultural income, family labor force and car value have a significant effect on the probability of time allocation to outside activities related to agriculture. Regarding agricultural activities, all variables except for the history of land use and land use ratio have a significant effect on the dependent variable. Also, based on the results, the lowest and largest share of income inequality in households are related to the off-farm activities which is unrelated to agriculture and farming, respectively. Creating the necessary facilities to increase the level of education of households, encouraging off-farm activities for small farmers, along with investing in the development of off-farm activities in rural areas can help to allocate their time to non-agricultural activities along with agriculture and increase income equality.
Gh. Layani; E. Ghorbanian; M. Bakhshoodeh
Abstract
Introduction: Given the importance of cereals in Iranian households’ baskets, scarcity and fluctuation of this product can reduce welfare of the society. Since the demand for this product comes from two channels of domestic production and imports, it is vital not only to control and monitor its production ...
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Introduction: Given the importance of cereals in Iranian households’ baskets, scarcity and fluctuation of this product can reduce welfare of the society. Since the demand for this product comes from two channels of domestic production and imports, it is vital not only to control and monitor its production but also to take into account the grains global market and trade, as well as the factors affecting the imports of these products. This is because of the fact that any price change can easily be transmitted to the importer countries such as Iran. In this context, this study aims to investigate global maize price transmission to Iran and the possible substitutability between domestic and imported grains by applying Armington and Pass-Through elasticities, Moreover, factors affecting grain imports are studies for the sake of policy implication.
Materials and Methods: For the purposes of this study, the Armington and Pass-Through elasticities four major grains markets, including wheat, barley, maize and rice, were calculated as follow:
(1)
,
Where d and m stand for domestic production and imports, respectively and p and q denote corresponding prices and quantities for selected products. The main function of estimated armington and Pass-Through elasticities as follow:
(2)
(3)
In this study, we used the ADF test to test stationary of variables. Realizing static variables in level and first difference, I (0) and I (1), we used ARDL approach to investigate long-run and short-run relation between variables. The following equation was estimated to examine factors affecting the grain imports to the country:
(4)
Where lM is log of imports of cereals, lGDP is log of GDP, lP is log of relative prices, lE is log of the exchange rate, lT is log of tariffs on imported cereals and lDP is log of domestic production.The required data include imports and domestic production of grain (wheat, barley, rice and maize), domestic and world price of grain GDP, exchange rate for 1981 to 2011 and were collected from the Statistical Center of Iran and FAO.
Results and Discussion: According to the results of this study, Armington elasticity indicates that the imported wheat is substitute for domestic wheat. The log-run Armington elasticities for wheat, corn and barley are found to be 0.41, 0.314 and 0.076, respectively. The small elasticity for barley shows a kind of independency of its domestic market to the world market. The corresponding elasticity coefficients for rice are -0.341 and -0.193 in the long-run and short-run, respectively. Accordingly, imported rice is complement with domestic rice. Findings also indicate that in the long-run the GDP and domestic production have significant effects on import demand of maize, barley and rice. The GDP and tariff rates have significant effect on wheat import demand. Due to the fact that the Iranian state exclusively imports wheat, the tariff rate exhibits an unexpected sign for this product. In the short run, GDP is the most influential variable. According to the results, income has positive and significant effect on the demand for imported maize and in the short-run one percent increase in income results in 1.78 percent increase on maize imports. Furthermore, wheat error correction factor of -0.5 reveals that half of the difference between short-run and long-run equilibrium will be resolved each year. The speed of adjustments for barley, maize and rice are very high. Therefore, any shock to their imports back into balance will return.
Conclusion: Based on the findings of this study, domestic grains are not substitutes for imported grains and thus we cannot rely on imports at least in the short run. Policies that make domestic grains more expensive will result in increasing the share of imports. Reduction of tariffs is recognized as an effective tool for trade liberalization. To support domestic production, the government should seek policies that cause imports to decrease. Tariff barriers can lead to this end; however, the policy needs to be taken together with protectionist policies. In contrast, reduction of tariffs for these products may be imposed if the purpose is primarily to capture domestic demand. Because of the complementary relationship between domestic and imported rice as well as high cost of production, imports of these products is one of the fastest and most common ways to capture the domestic demand, however, the government should support domestic producers by relevant policies such as guaranteed prices and by providing their basic needs at the international level.
N. Ashktorab; Gh. Layani; Gh.R. Soltani
Abstract
Introduction: The area under cultivation and yield of crops are affected by various factors, some of which are controllable and some others are uncontrollable. Controllable factors are divided into two types of price and non-price factors. Among the price factors, prices of agricultural products and ...
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Introduction: The area under cultivation and yield of crops are affected by various factors, some of which are controllable and some others are uncontrollable. Controllable factors are divided into two types of price and non-price factors. Among the price factors, prices of agricultural products and inputs play an important role in expanding the cultivation area. Uncontrollable factors also have great effects on increasing the cultivation area of agricultural products. Two of the most important factors that affect yield are weather and climate conditions. The agricultural sector that is one of the sectors that is most vulnerable to climate changes has often been used for political debates and research projects. In the agricultural sector, cereal and especially maize, have a special place in the world both in production and in the area under cultivation. Therefore, given the importance of this product, investigating the effects of climate changes on cultivation area and yield of maize needs careful examination.
Material and Method: Panel data in econometrics has many advantages over using cross-sectional data and time series. The Hausman test is used to determine the fixed and random effects in the panel data. Also panel data unit root tests will be necessary. In this study, several price and non-price factors are considered:
(1) Cit = f(Wit, RPit-1, Rit, Tit, Cit-1)
where Cit: maize cultivation area in province i in year t
Wit : wheat irrigated area and dry area in province i in year t
RPit-1: relative imposed price of maize and wheat in t-1.
Rit : rainfall in province i in year t
Tit : temperature in province i in year t
Cit-1: maize cultivation area in province i in year t-1
(2) Cit = α1 Wit + α2 RPit-1+ α3Rit+ α4 Tit+ α5 Cit-1+ uit
In addition, in this study the Ricardian model was used to examine the impact of climate change on maize yield.
(3)
: Yield per hectare of maize in province i in year t
: Temperature in province i in year t
: Rainfall in province i in year t
: Latitude and height above sea level, respectively.
The data used in this study were for the provinces of Fars, Khuzestan, Kerman, Kermanshah and Elam for the period 1993-2011.
Results and Discussion: According to Table 1, all variables are significant at the one percent level of confidence. Therefore, all of the variables are stationary.
Table 1- Results of stationary test for variables
variables Levin-Lin & chow stat. Pesaran& Shin stat. Stationary state
Cultivation area of maize 2.51*** ***1.13 I(0)
Cultivation area of Irrigated wheat 2.45*** 2.89*** I(0)
Cultivation area of Dry wheat 5.02*** 3.76*** I(0)
rainfall 8.74*** 6.09*** I(0)
Temperature 5.78*** 3.40*** I(0)
Relative imposed price of maize to wheat 2.74*** 1.36*** I(0)
Source: Research calculations
Based on the results shown in Table 2, all variables are significant. The highest and the lowest estimated coefficient is for the relative imposed price of maize to wheat (6.68) and cultivation area of dry wheat (0.01).
Table2- Results of the factors affecting the maize cultivation area in selected provinces
Variables coefficient Standard deviation T-statistics
Constant -2.49* 1.23 -2.03
Imposed price ratio with a lag 6.68*** 1.32 5.06
Cultivation area of Irrigated wheat -0.42* 0.22 -1.88
Cultivation area of Dry wheat -0.01* 0.006 -1.98
Cultivation area of maize with a lag 0.66*** 0.06 10.28
Rainfall 0.17*** 0.06 2.86
R-squared 0.97 Durbin-Watson stat 1.84
Adjusted R-squared 0.96 F-statistic 184.5
Source: Research calculations
Table 3 indicates the results of the Ricardian model by using the panel data method. R2 in this model is equal to 86 % and it shows that %86 of the variation of maize yield is explained by variables. According to the results,the rainfall altitude, the rainfall height above sea, the square of rainfall and latitude have significant effects on maize yield.
Table 3- Results of climatic factors on maize yield in selected provinces
Variables coefficient Standard deviation T-statistics
Constant 12.73*** 2.55 4.99
Temperature -0.11 0.20 -0.52
Rainfall 0.002*** 0.0002 7.32
Height above sea level -0.0004*** 0.0001 -3.51
Square of temperature 0.001 0.005 0.17
Square of rainfall -2.62*** 2.45 -10.71
Latitude -0.07*** 0.02 -3.05
R-squared 0.86 Durbin-Watson stat 1.59
Adjusted R-squared 0.81 F-statistic 5.15
Source: Research calculations
Conclusions: In this study, the factors affecting maize cultivation area and yield as a plant that uses a lot of water in Fars, Khuzestan, Kerman, Kermanshah and Elam provinces were investigated. The results showed that non-price factors such as rainfall and temperature have a significant impact on the cultivation area of maize. Due to the emphasis placed on the policy of self-sufficiency in wheat, irrigated and dry cultivation area of wheat and imposed price of wheat, mentioned by Garshasbi et al., have a significant impact on the cultivation area of maize in the selected provinces. The results indicated that according to specific climatic conditions in these provinces, irrigated wheat can be a proper alternative product for maize. Due to Vaseghi and Esmaeili, climate changes could have adverse effects on maize yield and can lead to a reduction of maize cultivation area. Due to the inevitability of global warming, further investigation of this issue is very important.
Keywords: Maize, Rainfall, Temperature, Yield, Cultivation area, Ricardian model, Panel data method
