Evaluating the Impact of Guaranteed Price Policy in the Barley: Using Propensity Score Matching Method (PSM)

Document Type : Research Paper

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Abstract

The law of guaranteed purchase of essential agricultural products as a protection policy has become into force with the aim of balancing production system, to avoid production waste and farmers' losses for a number of agricultural products. However, this policy was costly, but it follows every year. Thus, in the context of the article-33 of productivity increasing suggested guaranteed purchase policy instead of guaranteed price policy. In this regard, this policy has executed as sample in Kermanshah province. The purpose of this study is comparing barely price due to the implementation of this policy. One of the important challenges in assessing policy is that if the program does not implement to what level barely price will increase. To answer these questions, and pair of matching method was used. Kermanshah province observations (province executor) compared with the six major producing provinces of barley (Khorasan, Fars, Hamedan, Isfahan, Lorestan and Central) using 1394 data. The results of PSM method indicates that implementing this policy has caused barley producers in Kermanshah province could sell each kg of barely 847 Rls higher than before the implementation of price guarantee. According to the results, firstly continue the implementation of this policy and It is would suggest that this strategic action will be implemented on other agricultural products which is an incentive to increase productivity of factors of agricultural productions.

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