Agricultural Economics
H. Amirnejad; S.A. Hosseini-Yekani; S.M. Mojaverian; F. Kashiri Kolaei; M. Taslimi
Abstract
Introduction: The resistive economy, in the sense of managing the current situation in the country, minimizes the risks. In other words, establishment of the necessary institution in Iranian economy by using a set of policies, laws, and executive measures in such a way to minimize its risk against harmful ...
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Introduction: The resistive economy, in the sense of managing the current situation in the country, minimizes the risks. In other words, establishment of the necessary institution in Iranian economy by using a set of policies, laws, and executive measures in such a way to minimize its risk against harmful shocks and disturbances, especially foreign and international ones, would provide the ground for the country to achieve sustainable economic progress. One of the most important methods in this regard, in creating the infrastructure of a resistive economy, is development of the agricultural sector. In fact, due to the distinctive features of the agricultural sector, this sector can be considered as the driving force of the economy within the framework of the resistive economy. To achieve such an economy, the challenges and potentials facing this sector must be identified while determining optimal investment for the basic sectors. Due to the capabilities of agricultural production in Mazandaran province, in this study, for identifying the problems and opportunities in the subsectors of agriculture and horticulture, a type of SWOT analysis was used in which relative weights are calculated through a linear mathematical programming model. Finally, by using the QSPM approach, prioritization strategies were developed for each subsector. Material and Methods: In the SWOT analysis, the AHP approach was used to extract the pairwise comparisons of internal and external factors from the opinions of the interviewed experts in the subsectors of agriculture and horticulture. SWOT analysis has been used to determine strengths, weaknesses, opportunities, threats, and the combination of linear programming. Therefore, AHP approach is used to calculate the weight for criteria and alternatives at each level. In this research, a two-step linear programming method has been used to calculate the priority vector. In the first step, according to the pairwise comparison matrix, a formulation that provides a consistency limit is used. In the second step, according to the compatibility limits obtained in the previous step, for calculating marginal weights of the criteria, another linear programming model is used. After calculating the relative weights of each of the components of strengths, weaknesses, opportunities and threats, as well as determining some strategies, using expert opinions, the QSPM approach has been used to prioritize strategies. For this purpose, the attractiveness coefficients of each strategy were extracted according to the Swot components and by multiplying the attractiveness coefficients by the relative weights, the total score for each Swot component was calculated for each strategy and finally with the total score of the Swot components, a total score for each strategy was calculated. Finally, Excel and GAMS software were used to estimate the results. Results and Discussion: According to the results of SWOT analysis in the agriculture and horticulture sector, among the important strengths in Mazandaran province, this subsector can be ranked first in the production of various products, variety of climatic conditions and suitable water resources, the existence of fertile and suitable lands and variety of products. In contrast to the above strengths, weaknesses such as traditional and small units of exploitation, lack of guaranteed purchase and non-payment of debts on time by the government and cooperatives, low irrigation efficiency and low productivity of inputs (land, labor, etc.), lack of proper marketing system and the weak role of the government are some of important challenges in the subsectors of agriculture and horticulture in Mazandaran province. The opportunities facing the subsectors of agriculture and horticulture include the existence of ports and export terminals, existence of suitable fields for the construction of processing industries, improvement and establishment of fruit and vegetable terminals, and the existence of agricultural sub-graduates. The most important factors that threaten the activity of subsectors of agriculture and horticulture are related to the problems of financing and bank interest rates, land-use change and land trade, excessive import of agricultural and horticultural products, and small number of related processing industries. The results of prioritizing strategies through the QSPM approach also showed that according to aggressive strategies, in the subsectors of agriculture and horticulture, strategies like "Increased aggressive racial reform research ", "Establishment of fruit and vegetable export terminals" and "Development of processing industries", in the subsector of livestock strategies like "Export development and entry into global markets", "Product and market development", "Establishment of facilities for export to the Caspian littoral states" and "Improvement of livestock breeds to increase production" , and in the subsector of fisheries "Aquaculture Development", "Development of Fisheries Industry", "Private and public sector support and investment" and "Establishment of facilities for export to international markets" are among strategies for strengthening the economy of the province and the country that can be considered. Conclusion: According to the results of this study, it is suggested that more attention in terms of capital support, and regional policies should be given to the subsectors of agriculture and horticulture in this situation. Also, appropriate measures should be taken to increase the productivity of the agricultural sector in line with the resistance economy. It is also suggested that solutions such as guaranteed purchase, providing facilities for small and job-creating projects, use of agricultural researchers and graduates for improving and implementing of racial reform research, support and development of processing industry of agricultural products, market development and increasing exports of agricultural products, should be used.
F. Kashiri Kolaei; S.A. Hosseini Yekani; S.M. Mojaverian
Abstract
Introduction: Selecting suitable crops for cultivation in a non-certain environment is considered as an important management topic in the agricultural sector. Despite the multiple application of probability theory in quantifying uncertainty in the form of risk programming, validity of this theory ...
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Introduction: Selecting suitable crops for cultivation in a non-certain environment is considered as an important management topic in the agricultural sector. Despite the multiple application of probability theory in quantifying uncertainty in the form of risk programming, validity of this theory depends on the existence of frequency for uncertain variable. For events that cannot be measured by frequency, the only solution is to use subjective judgment of persons in the domain field rather than historical data. Some experts have mistakenly considered subjective judgmentl as a subjective probability and thus used the probability theory to quantify subjective judgmental. But based on existing evidence, the quantification of subjective judgment should be carried out in another theory called the uncertainty theory. In uncertainty theory, in addition to using the belief degree rather than frequency for calculating mathematical moments, the expected value of multiplicative variables will be different with their corresponding relations in the probability theory. Considering these conditions and having in mind that the agricultural sector is always faced with uncertain variables such as price of crops and weather conditions like rainfall, in this study the revenue uncertainty measures of major crops in the Goharbaran region of Sari have been calculated and compared. There are different measures for uncertainty, which in the present study variance and Tail Value at Risk (TVaR) have been used.
Materials and Methods: The first step in the application of the uncertainty theory is the elicitation of the belief degree or subjective judgments of the farmers about the crop's price and rainfall during the crop season. To elicit the uncertainty distribution of these variables based on the subjective judgments of farmers, 120 farmers were randomly selected in 2018. After eliciting the farmers' beliefs about uncertain rainfall and prices in the cdf method, it was necessary to select the number of belief degree which current practice was based on previous studies in this field. After calculating the above subjective judgments, while assuming linear, zigzag, normal and normal forms for uncertainty distribution, the parameters of each function were calculated using the least squares method. Among the forms of uncertainty distribution functions, the best form of the uncertainty distribution for each crop's price and rainfall was selected by comparing the RMSE indexes. Subsequently, by calculating a causal relationship between rainfall and crop yield, inverse uncertainty distribution of yield was also extracted. Given the inverse uncertainty distribution functions of crop price and yield, required parameters such as expected revenue, variance and TVaR of revenue at 95% confidence were calculated based on operational laws of uncertainty theory and probability theory. Eviews and Matlab software were used to estimate the yield response function and the uncertainty distribution functions, respectively.
Results and Discussion: In this study, after collecting the belief degree of farmers in the studied area about different levels of price and rainfall, three groups of comprehensive beliefs about prices and rainfall were determined by goodness of fit test. Then, according to the relationship between crop yield and rainfall, the inverse function uncertainty distribution is also calculated. With the uncertainty distribution function of crops price and yield, the expected revenue, variance (standard deviation) and TVaR measure for revenue per hectare of crops were calculated and compared with the uncertainty theory as well as probability theory. Based on the results of this study, the amount of the above measures varied in different belief degree groups, which is due to differences in the uncertainty distribution parameters. Also, based on the results of this study in all groups of beliefs for all crops, the probability theory compared to the uncertainty theory has estimated the variance approximately more than 30% less, which is a significant result. In other words, applying probability theory to belief modeling will lead to erroneous and misleading results. In the case of the TVaR measure in binary multiplicative variable conditions, the use of probability theory and uncertainty theory in calculating TVaR does not yield conflicting results.
Conclusion: The purpose of this study was to compare the results of applying probability theory for modeling belief degree rather than uncertainty theory in order to illustrate the necessity of using uncertainty theory in belief degree modeling. Studying the effect of probability theory in modeling the belief degree also suggests that the application of probability theory in the presence of two uncertain variables has no significant effect on expected values and TVaR but has a significant effect on variance size. Based on the results of the present study, assuming the binary multiplicative variable, in calculating higher mathematical moments such as variance, the results of probability theory and uncertainty theory make a considerable difference. This demonstrates the need to promote the uncertainty theory in belief degree modeling. In other words, basic training in the belief degree modeling method should be considered.
S.M. Ghaffari Esmaeili; A. Akbari; F. Kashiri Kolaei
Abstract
Introduction: Climate change is one of the most important issues that affect different sectors of the economy. Climate change affects precipitation and temperature and by disrupting optimal growth conditions will reduce crop yields and thus exert influence on food security and the spread of poverty in ...
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Introduction: Climate change is one of the most important issues that affect different sectors of the economy. Climate change affects precipitation and temperature and by disrupting optimal growth conditions will reduce crop yields and thus exert influence on food security and the spread of poverty in agricultural societies as a consequence. Production sectors, labor income and institutional income are affected by changing climate, and sectors that are more interactive with the agricultural. Specific features of the agricultural sector such as the dependence on climate variables have made this sector the focal point of climate change. Based on this, the present study examines the effect of climate change on economic growth of agriculture in Iran in the form of a dynamic computable general equilibrium model (DCGE).
Materials and Methods: In this research, DCGE has been used to investigate the effects of climate change (e.g. reduction of rainfall) on macroeconomic variables in Iran's agricultural sector. In order to implement the DCGE model, the social accounting matrix of 2011 has been used. The social accounting matrix represents the circular flow of funds between sectors, factors and institutions in a market economy. The social accounting matrix, which is a square matrix, is set up to equal the sum of rows and columns. The columns represent the receipts (revenue) and the rows represent the payments. Therefore, according to this definition, the total revenue of all accounts must be equal to the total expenditures of all accounts. In other words, the income of each economy is equal to the total cost of that economy. Since the social accounting matrix is a descriptive tool for illustrating the details of the structure of a country's economy, it will also be considered as a tool for general equilibrium analysis as it provides information on the relationship between production sectors and the external world as well as the relationship between income and consumption.
It should be noted that in the current study, the model was solved in the form of GAMS software. In order to estimate the results, it is necessary to go through two steps. At first, the model parameters are estimated to the value of the model decision variables then the solution would be equal to real values which are called calibration. Subsequently, by changing the variables related to climate change the model decision changes over the years are examined. In other words, by using the DCGE model, we studied the effects of climate change on important variables in the agricultural sector.
Results and Discussion: The results of this study about the effect of precipitation on the productivity of the agricultural sector indicate that one percent change in rainfall will reduce the productivity of agriculture by 0.79 percent. Based on the results of previous studies, by 2030 rainfall in Iran will be reduced by 9%, which means rainfall will decrease by an average of 0.3% per year. Thus, the productivity of agricultural sector will decreases by an average of 0.237% per year. Accordingly, the effect of changes in agricultural productivity (technological coefficient of Cobb-Douglas function), as a result of climate change, was measured on the macroeconomic variables of the agricultural sector including production, consumption, investment, exports and import. Results show that climate change decreases the production, consumption, investment and exports, and increases the imports by 2030.
Conclusion: The results of this study indicate that considering the amount of rainfall reduction in the 20-year horizon by 2030, the amount of production, consumption, investment and export of agricultural sector will decrease by 4.469, 5.025, 4.462 and 13.770 percent respectively, but imports in this sector will increase by 5.504 percent. Given the impacts of climate change on the macroeconomic variables in the agricultural sector, it is imperative that the government take appropriate measures to support this sector while confronting unfavorable climate. Considering role of capital in agriculture, results of this study indicate that due to the consequences of climate change in the assumed period the investment process of agricultural sector has a smaller share than other sectors. Therefore, in these circumstances, policies such as fixing the price of agricultural commodities, increasing the granting of loans by banks and other policies should be undertaken to encourage the private sector to invest in this sector.
F. Kashiri Kolaei; S. A. Hosseini Yekani; S. M. Mojaverian
Abstract
Introduction: Market power is an important factor affecting welfare. Existence of market power on the purchase side reduces supplier welfare. However, existence of market power on the sales side reduces supplier welfare. Some believe that the agricultural market structure is a monopoly. In fact, most ...
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Introduction: Market power is an important factor affecting welfare. Existence of market power on the purchase side reduces supplier welfare. However, existence of market power on the sales side reduces supplier welfare. Some believe that the agricultural market structure is a monopoly. In fact, most of the agricultural products can be purchased by small firms and then delivered to consumers because they are perishable and need certain storage conditions. Thus, a monopoly condition is created in the market. In Iran, pistachios are amongst the agricultural products that can be important for investigating the market structure and for its effects on social welfare. This is due to the fact that the price of pistachios has fluctuated sharply because of many reasons such as the existence of major buyers such as the Rafsanjan Pistachios Producers Cooperative. Monopolistic firms determine the price that causes problems such as losing trade, creating extra profits for the seller and reducing consumer surplus. However, effective implementation of policies requires identification of market structure. In this context, in the present study for investigating the effects of Iran pistachios market structure on social welfare, the spatial equilibrium model was used which is based on maximizing net social payoff (NSP) and is able to consider the variety of market powers in suppliers and consumers.
Materials and Methods: One of the noteworthy features of the spatial equilibrium model is that it is able to examine the price equilibrium in each of the market power degrees. In this study, the conjectural variations parameter was used to consider the market power in the model. This index represents the reaction of firms to change the behavior of a particular firm. The final equations of Iran pistachios spatial equilibrium model can be seen in the following equations:
Max NSP = -
s.t - +
+
j
, , xfj,k, ti,j ≥0
Where NSP is the net social payoff, i and j respectively represent the pistachios supplier and consumer provinces and f represents the method of export of pistachios including by road, sea, air or railway. Vfjk is the yield per Kg of pistachios exports in different ways from the j-th province to the k-th country, Sfj is the pistachios exports capacity of the various ways from the j-th province, Xfjk represents the pistachios exports from the j-th province using the f-th way to the k-th country and mk is the imported pistachios of each country from Iran. Moreover, rij represents conjectural variation, and respectively represent pistachios supply and demand in the provinces j and i, and represent the total shipped pistachios from the i-th province to the j-th province and shipped pistachios for domestic consumption of j-th province, respectively. and respectively represent the demand and supply curve equations according to and . It should be noted that in the perfect competition market rij is equal to -1 while in a monopoly market it is equal to 0. In this study, the 2010 data were used for the calculation of the parameters. Also, for welfare investigating, the surplus of consumers and suppliers were calculated by the following equations:
Consumer surplus : CSj=
Producer surplus: PSi=
Results and Discussion: According to the results of this study, pistachios market structure is far from perfect competition in Iran and creating the perfect competition conditions leads to nearly a double increase in consumers’ welfare and a reduction in the suppliers’ welfare about 0.13%. In general, switching the Iran pistachios market structure has significant effects on domestic consumers but pistachios suppliers are less affected because they export more pistachios to foreign countries. Most of the changes in consumers’ welfare are made in the provinces that are mostly consumers of pistachios and have low or no pistachios production (such as Golestan, Hamedan, Ardebil, Chaharmahal and Bakhtiari, Kordestan and Markazi). In contrast, the lowest welfare changes are associated with the major pistachios supplier (such as Kerman, Yazd, Hormozgan and Sistan and Baluchestan).
Conclusion: Since pistachios are mainly exported and in fact the price of pistachios in the domestic market is higher than the price of Iranian pistachios in foreign markets, a significant increase in the price of pistachios has negative effects on domestic sales and consumers welfare. Since one of the main reasons for the high price of pistachios in Iran is related to market power and the existing monopoly, it is essential to establish certain policies to combat this monopoly. Pistachios exchange can be noted among the policies that are effective in changing the market structure. Also, creating conditions for the entry of new firms into the pistachios market is effective in reducing monopoly in it.
Keywords: Market Structure, Welfare, Spatial Equilibrium Model, Pistachios