The Investigation of Comparative Advantage and Supporting Policies of Raisin, Qazvin, Iran

Document Type : Research Article

Authors

R. Joolaie ¹

M. Kazem Nejad ²

¹ Agricultural Economics Department, Gorgan University of Agricultural Sciences and Natural Resources, Iran

² Agricultural planning Economic & Rural Development Research Institute, Tehran, Iran

https://doi.org/10.22067/jead2.v1390i1.8876

Abstract

Abstract
Comparative advantage is an economic term which is used to compare potential and actual production capacity of a country in a given commodity with the rest of the world. Therefore, researches in this field could have a dual approach. In one hand it could demonstrate country’s production capacity in the production of commodities that are not produced yet and in the other hand it can illustrate the de facto production of a commodity in a given country. This study used Policy Analyses Matrix (PAM) and Domestic Resource Cost (DRC) for calculating the comparative advantage. For investigation support policies PAM indices were used. Amount of DRC index for raisin is 0.78 that demonstrates comparative advantage for this product. Nominal Protection Coefficient (NPC) index is 0.59 that indicates domestic policies reduced farmer's income to the level which is less than international prices. Furthermore, these policies are against production of this commodity and government received implicit tax from producers. Nominal Protection Coefficient of Input (NPCI) index shows the effect of government policies on input prices. This index is 0.72 for Qazvin rasin that shows government pay input subsidy to farmers. Effective Protection Coefficient (EPC) index is an index which shows the outcome of government policies regarding both input used by the farmers and farmers' income. This index is 0.57 for raisin that indicates government does not support this product as far as input used by the farmers and their income is concerned.
JEL: F14, Q18, Q17

Keywords

Comparative Advantage

Effective Protection Coefficient

Domestic Resource Cost

Raisin

Qazvin

20.1001.1.20084722.1390.25.1.4.4

---