Agricultural Economics
M. Rezvani; M. Pendar; S.S. Hosseini; H. Rafiee
Abstract
Introduction
The economy of countries are always exposed to shocks, including the Covid-19 pandemic, which causes many problems. The Covid-19 pandemic had various effects and consequences in different sectors, including the agricultural sector. The decline in income and production, coupled with the ...
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Introduction
The economy of countries are always exposed to shocks, including the Covid-19 pandemic, which causes many problems. The Covid-19 pandemic had various effects and consequences in different sectors, including the agricultural sector. The decline in income and production, coupled with the loss of customers due to health quarantines and border closures, severely impacted farmers businesses and created many problems for activists of various sectors of the agriculture. One of the most important effects of the Covid-19 pandemic is the decline in global economic growth. This has led to increased unemployment, decreased purchasing power among the population, and consequently, a decrease in demand. According to the impact of the covid-19 pandemic on food demand resulting from disruptions in the supply chain and income shocks, this research aims to investigate the existence of a structural break in the preferences of Iranian consumers for livestock products (red meat, chicken, eggs, and milk) using the Quadratic Almost Ideal Demand System (QAIDS) and the switching regression framework developed by Ohtani & Katayama (1986) during the period from Spring 2015 to Winter 2022.
Materials and Methods
Nonparametric and parametric approaches are utilized to investigate structural break in consumer preferences. This research employs parametric approaches and the Quadratic Almost Ideal Demand System to assess the structural break. The switching regression framework proposed by Ohtani and Katayama (1986) is utilized to model structural changes in preferences. In fact, a time transition function is incorporated into the demand system. Based on the characteristics of demand in the literature of structural changes, the Bewley likelihood-ratio test is applied to select an appropriate model. To evaluate the structural break and calculate the price and income elasticities, the price and per capita consumption data of livestock products are required, and in this research, seasonal time series data for the period of spring 2015 to winter 2022 have been used. The information related to the price of livestock products was obtained from the Joint Stock Company of the Support of Livestock Affairs. To obtain the per capita consumption, first, the information on the amount of production of red meat, chicken, milk, and egg are received from the joint stock company for livestock affairs. Then, by summing the amount of production and the amount of import of red meat, chicken, milk and eggs and deducting the amount of export from the said amount and dividing it by the population of the country, the amount of consumption per capita are calculated. The amount of export and import of red meat, chicken, milk and eggs is taken from the export and import report of the Ministry of Agriculture (Jihad), which is published monthly.
Results and Discussion
To estimate the system equations, one equation was removed, and the remaining equations were solved and estimated based on the removed equation. Accordingly, the equation related to milk was removed and the QAIDS with 33 parameters and three equations including those related to red meat, chicken and egg were estimated using the maximum likelihood estimator non-linearly. The results show the Based on the statistics of log-likelihood and DW the existence of a sudden structural break as a result of the Covid-19 pandemic. Comparing the Bewley likelihood-ratio test statistics calculated for an Non-Restricted QAIDS (with structural break) and a Restricted QAIDS (without structural break) with a critical χ^2 value with degrees of freedom of nine at the probability level of 5% indicates that the Non-Restricted QAIDS is selected as the appropriate functional form. Also, the results show that after the Covid-19 epidemic, the own price elasticity of red meat and chicken has increased significantly. Considering the high elasticity of the price of red meat, chicken and eggs after the Covid-19 epidemic, it is suggested that the government utilize price tools such as electronic coupon system to support consumers.
Conclusion
Due to the high cross-elasticity coefficients of demand for red meat, chicken and eggs after the Covid-19 pandemic, it can be expected that a change in the price of one of the red meat, chicken and egg products will significantly change the demand for the other product. Therefore, in case of a price increase in one of the products, it is suggested to consider special discounts for other products to support the consumers.
Agricultural Economics
A. Fatahi Ardakani; F. Sakhi; Y. Bostan; M. Rezvani
Abstract
Introduction Various studies have shown that changes in rainfall due to climate change can affect the stability of food supply and in fact climate change by increasing the prevalence and severity of drought or flood, crop yields, food access and also effect food prices. According to the FAO, Iran's ...
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Introduction Various studies have shown that changes in rainfall due to climate change can affect the stability of food supply and in fact climate change by increasing the prevalence and severity of drought or flood, crop yields, food access and also effect food prices. According to the FAO, Iran's food security rank is 82 out of 125 countries in the world, and one of the reasons for this rank is the excessive waste of agricultural products in Iran. As a result, citing a wide range of previous studies, it has been documented that the impact of climate change on food security for countries that are more dependent on agriculture is largely negative and has significant effects. Therefore, in present study, citing theoretical foundations and foreign and domestic studies conducted in the field of food security especially in Iran, factors such as food prices, climate change, household income, exchange rate and targeted subsidy policy as factors affecting selected food security and their effect on food security of urban households in Iran were studied.Materials and Methods In this study, it was our goal to find the effects of food price variables, climate change, household income, exchange rate and targeted subsidy policy on food availability by estimating single equations of the food security index.In this study, based on the subject literature and available information, the self-explanatory model with wide intervals (ARDL) and the error correction model (ECM) introduced by boys and colleagues have been used to examine integration and estimate short-term and long-term relationships between variables. Data required for the present study, regarding the open market exchange rate and food prices (food and beverages) from official statistics based on the annual reports of the Central Bank of the Islamic Republic of Iran and the necessary information to calculate the food security index of households and average household income from detailed results Expenditure and income of urban households of the Statistics Center of Iran, for the period 1398-1399 has been extracted.Results and Discussion The results showed that in the long run, a one percent increase in food prices reduces the food security index of Iranian urban households by 21 percent. As expected, the coefficient of variable climate change has a negative and significant effect on the food security index, and with its increase, the production of food and agricultural products decreases, and as a result, the food security index decreases. The growth rate of free market exchange rate with a negative sign at the level of one percent is significant. Since the agricultural industry in Iran is an industry highly dependent on imports. As a result, the increase in the exchange rate increases the price of agricultural products and affects food security. Annual household income has a positive and significant effect on household food security index. By increasing household income and assuming its appropriate distribution in society, it can be concluded that urban households are faced with increased purchasing power and ability to meet their food needs, and this variable has a positive effect on energy status and food security. The virtual variable of the years of implementation of the law on targeted subsidies is also significant at the level of 10% with a negative sign. The results show that in the long run, the implementation of this law has reduced the activity of farmers due to rising prices of agricultural inputs and energy carriers, this issue leads to a decrease in domestic food production and thus increases their prices and ultimately reduces food security of households. The estimated coefficient of ecm (-1) is equal to the negative value of 0.42 and is statistically significant at 1% probability level. The value of this coefficient indicates that each year 0.42% of the imbalance of one period of food security of urban households in Iran in the next period is adjusted.Conclusion Given the negative effect of food price index and exchange rate on food security of urban households, the application of appropriate exchange rate policies can be very effective in reducing inflation, especially food price inflation, which threatens the country's food security. With increasing investment, domestic food production is approaching self-sufficiency in this sector, in which case food prices will be subject to domestic supply and demand, and to some extent will be protected from exchange rate fluctuations and food imports, and this will create food security and prosperity. The economy in the country will help a lot. Given the negative effect of targeted subsidies, a review of the implementation of targeted subsidies policy to establish food security for households is proposed. To reduce the negative effects of climate change on food security, selective strategies must focus on addressing the adverse effects of climate change and food insecurity. Educating and strengthening public belief in climate change and water crisis, formulating long-term and short-term plans and policies for water resources management under climate change conditions with the participation of all relevant organizations and moving towards modern methods can be effective in reducing the effects of climate change.
