Analyzing Agricultural Sustainability Indicators,Under Energy Subsidy Reduction Policy(Case Study of Qorveh Plain)

Document Type : Research Article

Authors

• H. Balali
• M. Mantashloo

Bu- Ali Sina University

https://doi.org/10.22067/jead2.v0i0.35577

Abstract

Introduction: Generally, subsidies are the amounts of government payments in order to provide all society members with minimum well-being. In several countries such as Iran, the agriculture sector is supported by different methods to achieve goals such as increasing farmers' income, supporting domestic producers and eliminating dependence on imports, preserving employment and reducing poverty. A significant part of agriculture subsidies has been allocated to energy resources, chemical fertilizers, seeds, agriculture machines, vaccines, animal toxins, the interest on bank loans, insurance fees, certain airplane services, distributing young saplings, and government guaranteed purchase of products. However, examining the subsidies system in Iran reveals that most government payments are in the agriculture sector and more specifically on energy resources. Recently, the extra low cost of energy in the agriculture sector, which has had certain government supports, has resulted in low productivity and environmental damage, and has resulted in increased demand for agricultural products due to population growth, changes in life pattern, deviation in energy cost in agricultural sector, environment destruction and influences on sustainable agriculture indicators. Moreover, among different production units, agriculture has the closest relationship with the environment. This relationship is a mutual.On the one hand, erosion and destruction of the environment along with pollution growth and shortage of water resources negatively influences the production and efficiency of agricultural products, and on the other hand, agricultural pollutants and irregular use of chemical fertilizers in this sector impose indispensable damages to the environment.This study aims to apply a partial equilibrium model in order to examine direct and indirect effects of reduction of energy subsidies on economic and environmental indicators of agricultural sustainability in the Qorveh region, situated in the West of Iran.
Materials and Methods: The statistical sample of this research includes all irrigated land of Qorveh as the studied area. A partial equilibrium model has been applied by mathematic programming approach in order to analyze the economic and environmental effects of reduction of energy subsidies for the agriculture sector in the studied area. For this purpose, through a survey, questionnaires were used in order to identify production coefficients of agriculture products and farmers' behavior during 2012-2013. Then relevant equations were used in mathematical programming framework with the aim of maximizing gross margin of agriculture activities in planning horizon by using GAMS 22.9.
Results and Discussion: The results showed that by increasing energy price in policy scenarios of ES1 to ES7 the gross margin of agriculture activities decreases. Also, the results indicate that by implementation of scenarios SE1 and SE2, most economical and environmental indicators of agricultural sustainability will be improved and increasing energy prices as the mentioned policy scenarios has the most effect on GM_ELEC , GM_GAS, and NIT_H indicators and reduces them by 10.7%, 0.97% and 1.48%, respectively. In scenarios ES3 to ES5 with respect to scenarios ES1 and ES2, there is only 7% decrease in the NIT_H index. In scenario ES6, which grows electricity cost by 2.25 times and diesel fuel cost by 1.98 times, GM_ELEC, and GM_WA have the maximum decrease, namely 12.66% and 14.47%, respectively and WA_H has reached 9010 which shows an increase of 6.47%. In scenario ES7, with the exception of WA_H, GM_ELEC and GM_GAS other indicators decreased and this shows that the closer we keep to real energy prices, the more improvement we observe in the environmental indicators.
Conclusions: Consequently, results showed that the reduction of energy subsidies leads to reductions in economic indicators of the study area, as total gross margins. Also, the results showed that by increasing energy prices toward its real value, the consumption of energy will be reduced and environmental indicators including nitrate and potash fertilizers consumption per hectare of land will be improved.

Keywords

• Agricultural Sustainability
• Energy subsidy
• Mathematical programming
• Partial Equilibrium

20.1001.1.20084722.1394.29.2.5.5

References

Ahmadi Z., and Mirzaee Khalil Abadi H. 2012. Analysis of the effects of energy prices on production agriculture using input-output. Journal of Economics and Agricultural Development, 26: 41-46. (in Persian)

2- Asgari R., Bandry A., Khalil Tahmasebi B., and Jami Ahmadi M. 2012. Agricultural sustainability evaluation using sustainability indices. First National Confernece on Management and Development of Sustainable Agriculture of Iran.

3- Bagheri A. 2008. Evaluation of Ecological Sustainable Agriculture in Farming Systems Flooding. First National Confernece on Management and Development of Sustainable Agriculture of Iran: 618-624. (in Persian)

4- Bakhshi M., and Pykany Gh. 2011. Simulation of direct payment support policy in agriculture subdivision. Iranian Journal of Agricultural Economics and Development, 4: 501-511. (in Persian)

5- Bakhshi M., Pykany Gh., Hosseini S., and Iraj S. 2009. Effects of fertilizer subsidies and direct payments to crops and inputs policy. Journal of Agricultural Economics, 2: 185-207. (in Persian)

6- Balali H., Khalilian S., Ahmadian M., and Torabi Pelet Kaleh S. 2008. Analysis of Effects of Energy Subsidies Adjustment on Groundwater Balance and Exploitation. Journal of Agricultural Research, 8: 95-106. (in Persian with English abstract)

7- Berroteran Jose L., and Alfred Zinck J. 2009.Indicators of Agricultural Sustainability at the National Level.

8- Beshgh M., Tqdysy A., and Tusi R. 2012. Assessment of the sustainability of the agricultural system (Case study: the rural areas of the central city Minoodasht). Journal of Research and rural planning, 2: 113-130. (in Persian)

9- BuShehri A.M. and Wohlgenant K. 2012. Measuring the welfare effects of reducing a subsidy on a commodity using micro-models: An application to Kuwait's residential demand for electricity, Energy Economics, Elsevier, vol. 34(2), pages 419-425.

10- Cauwenbergh N., Biala K., Bielders C., Brouckaert V., Franchois L., Cidad V.G., Hermy M., Mathijs E., Muys B., Reijnders J., Sauvenier X., Valckx J., Vanclooster M., Der Veken B.V., Wauters E., Peeters A. 2007. SAFE a hierarchical framework for assessing the sustainability of agricultural systems. Agric Ecosyst Environ 120:229–242.

11- Charles B.M., Grigorios L., Schmitz A. 2010. The Effect of Increased Energy Prices on Agriculture: A Differential Supply Approach. Journal of Agricultural and Applied Economics, 42,4(November 2010):711–718.

12- Chen Z., Li H., Wong C.T.C. 1998. Environmental Planning: Analytical Network Process Model for Environmentally Conscious Construction Planning, ASCE Journal of Construction Engineering and Management, 131(1), Pp. 92-101.

13- Daan P. and Henri L.F. 2012. On the environmental impact of energy market liberalisation. OCFEB Research Memorandum 0010, ‘Environmental Policy, Economic Reform and Endogenous Technology’, Working Paper Series 5.

14- Dumanski J., Terry E., Byerlee D., Pieri Ch. 1998. Performance Indicators for Sustainable Agriculture. Rural Development Sector. The World Bank. Washington, D.C. . 115-1124.

15- Ghadiri M., Zya N., and Khrasany. 2010. Economic sustainability and its relation to spatial characteristics: a case study of rural villages Koohin city Kaboudarahang. Journal of Roosta va Towse' e, 2: 1-29. (in Persian)

16- Ghorbani M., Yazdani S., and Mir Kave. 2010. Introdction to Sustainable Agriculture.iran

17- Gomez L., Sanchez-Fernandez A.G. 2010. Empirical evaluation of agricultural sustainability using composite indicators. Ecological Economics 69 . pp. 1062–1075.

18- Hayati D., Ranjbar Z., and Karami E. 2010. Measuring Agricultural Sustainability.

19- Hosseini M., Klantari KH., Naderi Mahdei K. 2007. The study of ecological sustainability of smallholder farming systems in Hamadan Salehabad. Iranian Journal of Agriculture Science, 2: 91-98. (in Persian)

20- Ingels C., Campbell D., George M.R., Bradford E. 1997. What is sustainable agriculture? www.sarep.ucdavis.edu/concept.htm.

21- Iravani H., and Darban Astaneh A. 2004. Measurement, Analysis and Exploitation of the Sustainability of Farming Systems (Case Study: Wheat Production, Tehran Province). Iranian Journal of Agriculture Science, 1: 39-52. (in Persian with English abstract)

22- Karim M., and Abolhassan. 2009. Surveys of rural villagers about the challenges of sustainable development: case study Saruq district, the city of Arak. Journal of Roosta va Towse' e, 2: 155-178. (in Persian)

23- Koeijer T.J., Wossink G.A.A., Struik P.C., and Renkema J.A. 2002. Measuring agricultural sustainability in terms of efciency: the case of Dutch sugar beet growers. Journal of Environmental Management. 66. Pp. 9-17.

24- Mahdavi Damghani A., Koocheki A., Rezvani Moghaddam P., and Nassiri Mahallati M. 2005. Ecological Sustinability of a Wheat-cotton Agroecosystem in Khorassn. Iranian Journal of Field Crops Research, 1:129-142. (in Persian with English abstract)

25- Manzor D., and Haghighi I. 2011.The effects of energy price reform in Iran on environmental emissions, computable general equilibrium modeling. Journal of Environmental Studies,60: 1-12. (in Persian)

26- Motiee Langroodi H., Shmsayy M. 2009. Based on continuity and stability of Agriculture Rural Development Case Study of Zanjan Sjasrvd. Geographical Research,85: 85-104. (in Persian)

27- Nambiar K.K.M., Gupta A.P., Qinglin Fu S. Li. 2001. Biophysical, chemical and socio-economic indicators for assessing agricultural sustainability in the Chinese coastal zone. Agriculture, Ecosystems and Environment 87 . pp. 209–214.

28- Norman D., Janke R., Freyenberger S., Schurle B., and Kok H. 2000. Defining and Implementing Sustainable Agriculture. Kansas Sustainable Agriculture Series. Manhattan, Kansas: Kansas State University Agricultural Experiment Station and Cooperative Extension.

29- OECD. 2008. "Environmental Performance Of Agriculture In OECD Countries since 1990: Full List of Agri –Environmental Indicators". Available at: http://www.oecd.org/tad/env/indicators

30- Pahlevani M., Taybi K., Taheri P., and Kelate arabi V. 2012. Determine the rate of change of use of agricultural inputs by dumping prices of inputs. Journal of Economics and Agricultural Development, 4: 228-236. (in Persian)

31- Pannell J., Glenn A. 2000. A framework for the economic evaluation and selection of sustainability indicators in agriculture. Ecological Economics 33 . pp. 135–149.

32- Pourzand F., and Bakhshodeh. 2012. Evaluating agricultural sustainability of Fars province with compromise programming approach. Journal of Agricultural Economics Research, 4(1): 1-26. (in Persian)

33- Praneetvatakul S., Janekarnkij P., Potchanasin C., and Prayoonwong K. 2001. Assessing the sustainability of agriculture (A case of Mae Chaem Catchment, northern Thailand). Environment International 27 . pp. 103–109.

34- Qiu H., Zhu W., Wang Hai-bin and Cheng Xu. 2007. Analysis and Design of Agricultural Sustainability Indicators System. Agricultural Sciences in China, 6(4):pp 475-486.

35- Rasul G., Thapa G.B. 2003. Sustainability Analysis of Ecological and Conventional Agricultural Systems in Bangladesh. World Development Vol. 31, No. 10, pp. 1721–1741.

36-Vahdi M., Hosseini M., Hosseini S., and Mirdamadi M. 2009. Nazarabad city subjective viewpoints of farmers on sustainable agriculture indicators at farm household level. Iranian Journal of Agricutural Economics and Development Research, 2:123-133. (in Persian)

37- Zhen L., Routray K. 2003. Operational Indicators for Measuring Agricultural Sustainability in Developing Countries. Environmentalis 32. DOI: 10.1007/s00267-003-2881-1. Pp 34-46.