Agricultural Economics
S.M.J. Esfahani; E. Barikani
Abstract
IntroductionMany governments provide subsidies to members of the agricultural supply chain to ensure food security, maintain economic stability, and uphold the social benefits associated with the agriculture sector. The conflicting goals of food security and environmental protection have become a major ...
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IntroductionMany governments provide subsidies to members of the agricultural supply chain to ensure food security, maintain economic stability, and uphold the social benefits associated with the agriculture sector. The conflicting goals of food security and environmental protection have become a major problem, especially in developing countries. On the one hand, the government aims to boost food production by offering agricultural subsidies. On the other hand, the excessive use of chemical inputs due to these subsidies has raised concerns about environmental pollution. Therefore, one of the most significant global challenges is to balance agricultural production to meet the increasing demand of the growing population while maintaining the quality of the environment. Any changes in government support policies for the agricultural sector can lead to fluctuations in input and product prices, directly impacting farmers' profits. As a result, these changes can influence cultivation patterns and the use of agricultural inputs, ultimately affecting the environment. Therefore, before implementing any policy changes, it is crucial to assess both the economic and environmental impacts and make informed decisions based on these considerations.Materials and MethodsThis study uses positive mathematical programming (PMP) on the environmental impact of chemical fertilizers’ subsidies change and transfer subsidies to crops in Zarandieh city of Markazi province. The necessary information was collected through the statistical sources of the Ministry of Agricultural Jihad for the crop year 2023 for the three crops including irrigated wheat, irrigated barley, and silage corn, which occupies more than 85 percent of the cultivated area of this region. At the first stage, the amount of greenhouse gas (GHG) emissions by each product was calculated, and then the environmental impact of different subsidy policies was investigated. To calculate the greenhouse gas emissions, the emission coefficient of each of the inputs that have been cited in various studies was used. To model and analyze the data, positive mathematical programming with the cost function approach was used. Excel and GAMS software has been used to run the models.Results and DiscussionThe results of the study showed that the highest amount of greenhouse gas emissions is related to corn silage, and electricity, diesel, and chemical fertilizers have the largest share of the greenhouse gas emissions. The simulation results for the region’s cultivation patterns, considering scenarios where only chemical fertilizers—N-fertilizer, P-fertilizer, and K-fertilizer—were used separately and together with increases of 25%, 50%, 75%, and 100%, indicate that as input prices rise, both the cultivated area and farmers' income decrease. Additionally, increasing the price of P-fertilizer has a greater potential to reduce environmental impact compared to raising the price of other chemical fertilizers.To assess the environmental impact of reallocating subsidies from chemical inputs to agricultural products, a scenario was simulated in which the price of chemical inputs increased by 100%, while product prices rose by 5% and 10%, respectively. The model results revealed that the lowest environmental impact per hectare of crop production occurs when chemical fertilizer prices increase by 100% and product prices rise by 5%.Based on these findings, reallocating subsidies to agricultural products rather than production inputs appears to yield more favorable environmental outcomes. In other words, when the subsidy is allocated to the product instead of chemical inputs, the environmental impact of crop production in this area would be reduced and the amount of emissions per hectare of farm or million Tomans of gross profit would be less compared to other situations.ConclusionIt is necessary to support the agricultural sector to boost food production but these supports should be done with the least environmental impact. According to the findings of this study, if subsidies are given to agricultural products instead of inputs, greenhouse gas emissions will be reduced while maintaining the area of crops and the amount of gross profit of farmers. The policy of setting a guaranteed price for basic agricultural products in Iran can be a suitable tool to realize this. In other words, transferring the credits allocated for purchasing chemical fertilizers to the guaranteed purchase of agricultural products will be an effective step in reducing the emission of greenhouse gases and their impact, as well as maintaining the country's food security.
Agricultural Economics
N. Heidari Zahiri; H. Amirnejad; S. Shirzadi Laskookalayeh
Abstract
Introduction:Water scarcity, improper management of water resources, excessive application of chemical inputs, and lack of proper cultivation patterns are present in agriculture. Lack of attention to these cases will inflict irreparable damage on the agricultural sector. Accordingly, attention to sustainable ...
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Introduction:Water scarcity, improper management of water resources, excessive application of chemical inputs, and lack of proper cultivation patterns are present in agriculture. Lack of attention to these cases will inflict irreparable damage on the agricultural sector. Accordingly, attention to sustainable agriculture, conservation of water resources and prevention of improper use of chemical fertilizers are essential to reduce environmental pollution. In many cases, there is agreement on the river basin scale as a suitable spatial scale for analysis of water resources management. Tajan Basin with area of about 4187 km2 is one of the important parts of Caspian Sea Basin. The Current status of water resources in Tajan basin due to decrease in river runoff, has doubled the focus on the basin's water resources management. Materials and Methods: In this study, with the help of positive mathematical planning and maximum entropy approach in GAMS, policies to reduce the use of chemical fertilizers and water in selecting the appropriate cultivation pattern for 2017 in the Tajan basin were reviewed. Within the model, the farmer maximizes the expected utility of their stochastic income, subject to resource and non-negativity constraints. To include both market and yields uncertainty, we calculated profit covariance matrices by using national averages for prices and yields for the 2018–2009 period. The resource constraints include land, water and fertilizer. Selected irrigated crops in the region include rice, wheat, rapeseed and corn. In the present study for simulating farmers' response, reduction scenarios including 5%, 10% and 15% of available water and fertilizer are considered. There are also two environmental sustainability index that are related to amount of the used fertilizer and water. The smaller the index is, the greater sustainability is provided in crop production. Results and Discussion: Calibration of PMP pattern with maximum entropy approach showed that there is no difference between the value of target function, inputs and cultivation level in the current situation and calibration pattern. In all water reduction scenarios, the total cultivation area decreased. The results indicate that the agriculture in the basin is vulnerable due to changes in available water. The 15% decrease in water resources causes a significant decrease of 15/903% of the cultivation area. Cultivation area under fertilizer reduction scenarios has been lower in comparison with water scenarios, and so reduces the used fertilizer and increases soil conservation and water stock. In reduction scenarios of water and fertilizer, land reallocation is reduced due to less reduction in expected utility of farmers. In water scarcity conditions and lack of fertilizer, rice and wheat crops have higher economic benefits per hectare than other crops. The sustainability index for used fertilizer in all reduction scenarios of water and fertilizer is lower than the current pattern. Also the index of the used water in the PMP model is lower than the baseline in the region that decrease was 0.018%, 0.144% and 0.319% at three levels of 5%, 10% and 15%, respectively. In the scenario of 15% reduction of fertilizer, land allocation and economic benefits decreased by 13.83% and 0.034%, respectively. However used fertilizer and water index improved to 1.348% and 0.319%, respectively. Therefore, improving the water and fertilizer application index has a higher priority than reducing the expected utility in the region. Conclusion: In the current cropping pattern, farmers do not pay attention to the environmental characteristics and sustainability of the region. While with the policies of reducing the quantity and price of chemical inputs and introducing different types of sustainability indicators, it is possible to develop a cultivation model. In addition to earning the necessary profit, it enables the optimal use of fertilizer and water inputs. Changing the behavior of farmers compared to the current pattern of input consumption requires strong motivation and reasons. Therefore, water quality tests and soil decomposition in the region, as well as providing appropriate formulas for optimal use of chemical fertilizers is needed. Extension services to increase people's awareness is a good solution for optimal use of inputs and increase the level of cultivation and farmers' profits.
Agricultural Economics
H. Danshgar; M. Bagheri; M. Mardani Najafabadi
Abstract
Introduction: Climate change and increasing global warming are intensifying droughts, changes in rainfall distribution and depletion of water resources over time. Persisting hot and dry weather has intensified the phenomenon of climate change and posed serious threats to the country's water resources, ...
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Introduction: Climate change and increasing global warming are intensifying droughts, changes in rainfall distribution and depletion of water resources over time. Persisting hot and dry weather has intensified the phenomenon of climate change and posed serious threats to the country's water resources, resulting in the inability to meet the needs like drinking, environmental, industrial and agricultural ones. The fifth report of the Climate Change Board also shows that the phenomenon of climate change in many parts of the world has had a negative impact on agricultural production; but the application of appropriate and timely adaptive scenarios against climate change can reduce the negative effects of this phenomenon on the agricultural crops yield. Bushehr province is mostly exposed to climate change and drought because of its geographical location. According to the National Meteorological Center, the area affected by drought in this province during the ten-year period ending in March 2019, was 83%. Up to 80% of the plains of the province have a negative groundwater level. This problem is more severe in some plains of the province, including Bushkan plain, the water level of this plain has decreased by 1.31 meters annually. This plain is considered as the agricultural hub of province and Dashtestan city. Thus the study of the effects of climate change on the hydrological and agricultural situation of the Bushkan plain and the analysis of the effectiveness of adaptive scenarios to reduce the negative effects of this phenomenon is very important.Materials and Methods: In this study, in order to create optimistic and pessimistic scenarios of climate change, the LARS-WG microscale model was used. Then, in order to investigate the effects of climate change on the hydrological status of Bushkan plain, water needs of agricultural crops and crops yield, simulated climate change scenarios and adaptive scenarios include improve irrigation efficiency and deficit irrigation were entered into WEAP model and its agro-agricultural model, MABIA. For the purpose of investigating the adaptation of agricultural production systems to changes in available water and yield as well as to measure the effectiveness of adaptive scenarios, a positive economic planning model was used. For economic model, statistics and information related to the cultivation area, production costs, prices and yields of crops in different areas of Bushkan plain were obtained through the Jihad Agricultural Organization and also completed 100 questionnaires from farmers in the area. Random sampling method was used to calculate the sample size.Results and Discussion: By applying two scenarios, optimistic A1B and pessimistic A2, in general, it can be concluded that the most changes in precipitation were in autumn and winter and the most temperature changes were at least in autumn and spring. Also, applying a pessimistic scenario will cause more drastic changes than an optimistic scenario. The results of MABIA model show that by applying both climatic scenarios, the average water requirement of all agricultural products increases during the simulation period compared to the base period.Increasing water demand and decreasing available water have caused water stress and as a result reduced the yield of various agricultural products in Bushkan plain. The results show that the average crop yields decreases, but the highest reduction of yield in both scenarios is related to wheat crop. The results of PMP model indicates that the application of optimistic and pessimistic scenarios will reduce the area under cultivation of this plain by 42% and 55%, respectively. On the other hand, among different crops, the area under cultivation of crops such as wheat, barley and watermelon has declined more sharply. However, the application of adaptive scenarios to improve irrigation efficiency and under-irrigation somewhat offsets the effects of climate change. In optimistic climate change, adaptive scenarios to improve irrigation efficiency and use of deficit irrigation method will improve the area under cultivation of agricultural products by 6 and 4 percent, and in pessimistic climate change by 3.8 and 2.3%.Comparison of the results of applying adaptive scenario shows that despite the less effect of deficit irrigation on improving the area under crops, the increase in profit in this scenario is more than the improvement of irrigation efficiency and the reason is the costs of improving irrigation efficiency compared to the deficit irrigation scenario.Conclusion and Recommendations: Principles of resource management and low productivity have led to declining groundwater levels and as a result the ban on the exploitation of more groundwater in the plains of Bushehr province, including the Bushkan plain. Accordingly, in this study, the consequences of climate change on the hydrological and agricultural situation in the Bushkan plain of Bushehr province as well as the effectiveness of adaptive scenarios were investigated .Finally, based on the results of the present study, it is suggested that farmers use scenarios such as deficit irrigation methods and improve irrigation efficiency to prevent water loss and reduce the yield of these crops. However, since the results showed that using deficit irrigation method will improve agricultural profits more than improving irrigation efficiency, therefore, using deficit irrigation method has priority over improving irrigation efficiency. Also due to the low impact of climate change on water demand and canola yield, canola is suggested to local farmers as an alternative crop for wheat and barley crops.
M.M. Mozaffari; A. Parhizkari; M. Hoseini Khodadadi; R. Parhizkari
Abstract
Introduction: Greenhouse gases absorb the radiation reflected from the earth surface which would otherwise be sent back into space. The composition and mixture of these gases make life on earth possible. In recent years, human activity has affected both the composition and mixture of the atmosphere, ...
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Introduction: Greenhouse gases absorb the radiation reflected from the earth surface which would otherwise be sent back into space. The composition and mixture of these gases make life on earth possible. In recent years, human activity has affected both the composition and mixture of the atmosphere, modifying the climate. When climate changes, crop production is affected. There are many studies that consider the type and amount of production changes for particular crops, places and scenarios. Others attempt to expand knowledge about production changes and their impacts on economy and regional welfare. Climate change affects agriculture through direct and indirect affects i.e. temperature, and precipitation changes in the biological and physical environment. Restriction in water availability is one of the most dramatic consequences of climate change for the agricultural sector. Water availability is expected to be even more limited in the future. Scarcity of water is due to potential evapotranspiration increase. It is related to increase in air and earth surface temperatures. This phenomenon is important in low-precipitation seasons, and is even more severe in dry areas. The number of regions with loss of soil moisture is expected to increase, resulting in direct economic consequences on the production capacity. Considering the above decisions, the main objective of this paper is to integrate climate change into agricultural decision-making by using an Economic Modeling System to identify the impacts of climate change induced by greenhouse gas emissions on agricultural sector productions and available water resources in the down lands of the Taleghan Dam.
Materials and Methods: In this study, the effects of greenhouse gases on climate variables of temperature and precipitation under emission scenarios A1B, A2 and B1 were evaluated using time series data from 1981- 2008 and General Circulation Models (GCM). Then Ordinary Least Squares (OLS) was used to survey the impacts of climate variables on the selected products yield. Changes in agricultural production, farmer’s gross profit and economic value of irrigation water were analyzed and compared with the base year by the regression analysis results in the Positive Mathematical Programming (PMP) model. This methodology that was developed by Howitt (1995) to calibrate agricultural supply models has been used to link biophysical and economic information in an integrated biophysical and economic modeling framework and to assess the impacts of agricultural policies and scenarios. These models are also accepted for analyzing the impact of climate change and water resources management policies and scenarios. The PMP model used in this paper is a three-step procedure in which a non-linear cost function is calibrated to observe values of inputs usage in agricultural production. In the basic formulation, the first step is a linear program providing marginal values that are used in the second step to estimate the parameters for a non-linear cost function and a production function. In the third step, the calibrated production and cost functions are used in a non-linear optimization program. The solution to this non-linear program calibrates to observed values of production inputs and output. The required data in this paper were collected from meteorological stations and the relevant agencies in the Qazvin province. Regression functions estimated in Eviews software package and the PMP model were solved in GAMS (General Algebraic Modeling System) software.
Results and Discussion: The results obtained in this paper showed that with emissions of greenhouse gases under the studied scenarios (A1B, A2 and B1), the average annual climate variables of temperature and precipitation changes from 1.64 to 2.28 °C and from20.92 to 1.1 mm, respectively. With these change, the yield of the most selected products decreases in the down lands of Taleghan Dam. Moreover, the obtained results showed that with emissions of greenhouse gases under the scenarios A1B, A2 and B1, the total acreage of the selected products changes from 2.18 to 4.09 percent. Total used water also decreases from 1.67 to 5.18 percent. Moreover, with emissions of greenhouse gas under the above scenarios total farmer’s gross profit decreases from 1.93 to 3.72 percent. However, the economic value of water increases from 4.27 to 13.6 percent in comparison with the base year.
Conclusion: In this study finally, in order to reduce greenhouse gas emissions in the vicinity of the down lands of the Taleghan Dam, it is recommended that the government should use punitive tools (green complications) for polluting units and serve the private sectors in forestry projects in the vicinity of the industrial towns.
Keywords: Agricultural productions, Climate change, Greenhouse Gases, Positive Mathematical Programming, Taleghan Dam
A. Parhizkari; M. Sabuhi; M. Ahmadpour Borazjani; H. Badi Barzin
Abstract
Considering that agricultural sector is the largest consumer of water, presenting integrated management for water resources and formulating effective policies to increase water productivity in this sector is essential. Therefore, using economic modeling , this study simulated the farmers’ responses ...
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Considering that agricultural sector is the largest consumer of water, presenting integrated management for water resources and formulating effective policies to increase water productivity in this sector is essential. Therefore, using economic modeling , this study simulated the farmers’ responses to irrigation water pricing and rationing policies in Zabol city. To achieve the study purpose, the State Wide Agricultural Production Model and Positive Mathematical Programming were applied. The required data for the years 2010-2011 was collected by completing questionnaires and collecting data sets from the relevant agencies of Zabol city in personal attendance. The results showed that imposing irrigation water pricing and rationing policies in Zabol city leads to a reduction in the total cultivated area by 9/54 and 5/14 percent and a reduction in the water consumption by 6/23 and 7/01 percent, compared to the base year. Ultimately, irrigation water rationing policy, considering frugality of 18/9 million m3 of water, as the appropriate solution for the sustainability of water resources of Zabol city was proposed.
M. Sabuhi; A. Parhizkari
Abstract
In this study economic and welfare impacts of establishing irrigation water market in Qazvin province as well as potentiality of irrigation water transfer under stress irrigation conditions in the cities of Qazvin province were analyzed. To achieve the above objectives, Positive Mathematical Programming ...
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In this study economic and welfare impacts of establishing irrigation water market in Qazvin province as well as potentiality of irrigation water transfer under stress irrigation conditions in the cities of Qazvin province were analyzed. To achieve the above objectives, Positive Mathematical Programming model and State Wide Agricultural Production functions were used. To achieve applicable results, the production function with a constant elasticity of substitution and cost function with an exponential form were included into the Positive Mathematical Programming model was imported. The study data for the year 2011-2012 was collected by asking the relevant offices in each city of Qazvin province. The proposed model was solved in six successive stages using the GAMS software. After solving the model, amount changes in the area of irrigated crops, farmer's gross profit and labor surplus under the two conditions of “existence of water market” and “lack of water market “at the regional level were calculated. The results showed that establishing irrigation water market increases total irrigated lands for 1/2 percent, total farmer’s gross profit for 1/86 percent and total labor force employed in agriculture for 1/8 percent in the province. Ultimately, considering the supportive and constructive role of regional water markets, it is recommended to provide necessary conditions and tools to establish an optimal use of such a mechanism associated with the type of market in Qazvin province.
A. Parhizkari; M. Sabuhi; S. Ziaee
Abstract
In the recent decades, due to water shortage problems, most countries have adopted their new policies from water supply management to water demand management . The main objective of the present study is a simulation of water market in order to determine the role of market in the balance between water ...
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In the recent decades, due to water shortage problems, most countries have adopted their new policies from water supply management to water demand management . The main objective of the present study is a simulation of water market in order to determine the role of market in the balance between water supply and water demand and to analysis impacts of irrigation water sharing policies on the cropping patterns under conditions of water shortage in the Shahrood River Basin. For this purpose, positive mathematical programming (PMP) model and regional agricultural production functions were used. After the model design, irrigation water sharing policies in consistent with the legal deviations for each of the three different cases were simulated. Finally, deficit irrigations under the three scenarios 10, 20 and 30 percent were conducted. The data was adjusted based on the reference year of 2011. A part of the data was collectedby completing the questionnaires and interviews in person with farmers from the three regions western Alamut roudbar, Rajai Dasht and Eastern Alamut roudbar.The other part of data was collected by visiting the relevant offices in the city of Qazvin. To solve the proposed model, the software GAMS version of 23/9 was used. The results showed that application of irrigation water sharing policy is a suitable approach for the allocation of water resources of the Shahrood river basin. Furthermore, the results showed that establishming the water market and trading between the regions increases the economic benefits for farmers. The applied irrigation deficit from 10 to 30 percent increased the total area of irrigated crops from 9 to 37 percents.
A. Bakhshi; R. Moghaddasi; M. Daneshvar Kakhki
Abstract
AbstractManagement of water resources in Iran is faced with growing demand for water resources, a considerable increase in the costs of supplying additional water and uncontrolled exploitation of underground waters. Economists suggest water pricing to improve water use efficiency; however, government ...
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AbstractManagement of water resources in Iran is faced with growing demand for water resources, a considerable increase in the costs of supplying additional water and uncontrolled exploitation of underground waters. Economists suggest water pricing to improve water use efficiency; however, government tends to reject that advice due to political risk, economic and cultural concerns. We used a positive mathematical programming (PMP) model at farm level, to analyze the different effects caused by the implementation of water pricing and alternative polices on irrigated agriculture in the Mashhad plain (Khorasan Razavi Province). Three policy options including water pricing, water complementary input factor taxes, and output taxes were examined. The effects of alternative policies are strongly dependent on group of farmers and that would create widespread effects on farm income, water savings and cropping pattern. Water pricing and output tax policies are better suited and effective than water complementary input factor taxation but both input factor tax and output tax policy at certain rates can be alternatives to water pricing policy.
