Decreasing water resources, increasing government spending and currency fluctuations, main challenges of supplying wheat in Iran; What should be done?

Document Type : Research Paper

Authors

1 PhD Candidate of Agricultural Economics, Tarbiat Modares university

2 Department of Agricultural Economics, Tarbiat Modares University

3 Associate Professor of Agricultural Economics, Tarbiat Modares University

4 TARBIAT MODARES UNIVERSITY / FACULTY MEMBER

Abstract

The significant importance of wheat consumption in the Iranian food supply basket has caused the country to supply wheat with various challenges, including reducing water resources, increasing government spending and exchange rate turbulence. Accordingly, in this study, by designing a partial dynamic equilibrium model, it was attempted to answer the key question that needs to be addressed in order to cope with the challenges of supplying wheat in the coming years. Therefore, the rice and quantity components of the wheat market of the country were simulated in the approaches of supportive price and free price for the 1404 horizons. The results showed that in the horizon of 1404, reduction of wheat yield and wheat production would be expected. Nevertheless, providing farmer's annual price expectations based on inflation in a supportive approach will lead to more sustainability of production and supply of the product. On the other hand, the liberalization of wheat prices and, consequently, reduced demand for this product will bring more sustainability of the country's wheat stock. Therefore, in this study, it was suggested that in order to cope with the challenges of supplying wheat in the country, in particular the reduction of the share of government support, various policies to increase the entry of private sectors into the chain of purchase and sale of wheat be on the agenda. It was also suggested that the policy of minimizing imports of wheat by new methods, including over-land planting, would replace the import replacement policy of this product.

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References

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