Examining the Factors Affecting Iranian Government Support of Agricultural Products Market

As one of the oldest sectors of economy, agriculture has had an important role in the supply of food for people and raw materials .In this study, the factors affecting the Iranian government support of agricultural products market has been investigated for the period of 1989-2011. In this regard, using the theory of efficient redistribution and panel data of 12 selected agricultural products including wheat, barley, rice, cotton, pistachio, apples, dates, beets, eggs, milk, red and poultry meat, the rationale for government intervention in the agricultural sector has been modeled in the Panel Tobit model framework and is then estimated. The results of this study indicated that the elasticity of supply and demand, the share of total exports of agricultural goods, the real income of farmers, number of farmers, the share of total agricultural output, and concentration of production are the factors that are directly related to the amount of agriculture support, such that, with the increase in each of these variables, the amount of government support has increased. However, the results showed no significant relation between the import variables (the products which have similar domestic production) and also the number of agricultural cooperatives and organizations with the level of government support.

Examining the Factors Affecting Iranian Government Support of Agricultural Products Market Keywords:

Agricultural support policies , Efficient redistribution , Panel Tobit model