The Impacts of Import Tariff Policy on Domestic Rice Market in Iran

Subject Areas : Agricultural Economics Research

S.H. Mousavi ¹ (دانشجوی دکترای اقتصاد کشاورزی دانشگاه شیراز)
A. Esmaieli ² (دانشیار اقتصاد کشاورزی دانشگاه شیراز)

Received: 2015-12-18 Accepted : 2015-12-18 Published : 2011-06-22

Keywords: Iran, Consumption, Rice Market, Import tariff, spatial price equilibrium model, Production,

Abstract :

The dilemma of cheap food and self-sufficiency for the case of rice in Iran justified continuous government intervention in this market. Among all policy instruments, import tariffs have been extensively used in recent years. However the impacts of the policy on producers and consumers are quite controversial and remain as main question for researchers and policy makers. In this paper, attempts were made to develop a multi-market spatial price equilibrium model for analysis of import tariff changes on the volume of trade, prices, domestic production and consumption. Results showed that domestic production have been strongly protected by non tariff barriers but led to inefficient tariff policies in rice market. Also results showed that the effects of such policy were varied among various regions and between rural and urban areas of Iran. On the whole, increase in import tariff on rice caused a significant decrease in consumption and import volume and increase in retail, farm gate prices and domestic production of rice  

References:

1. Adelman, I. and Robinson, S. 1988. Macroeconomic Adjustmentand Income Distribution: Alternative Models Applied to TwoEconomies. Journal of Development Economics. 29:1-22.

2. Adelman, I. and Taylor, J.E. 1991. Multisector Models andStructural Adjustment: New Evidence From Mexico. Journal ofDevelopment Studies. 1: 154-163.

3. Bakhshoodeh, M. and Najafi, B. 2003. Iranian governmentintervention in the rice, wheat and cotton markets. Iranian

Agricultural Research. 22(2): 165-178. (in Persian)

4. Braverman, A. and Hammer, J. 1986a. Multimarket Analysis ofAgricultural Pricing Policies in Senegal, in Agricultural

Household Models: Extensions, Applications, and Policy, editedby I. Singh et al., Baltimore: Johns Hopkins University Press.

5. Braverman, A., Hammer, J. and Brandao, A.S. 1986b. EconomicAnalysis of Agricultural Pricing Policies in Brazil: The Wheatand Soybean Case. Discussion paper, Washington, D.C: WorldBank, Agricultural and Rural Development Department.

6. Braverman, A., Hammer, J. and Yong Ahn, C. 1986c.Multimarket Analysis of Agricultural Pricing Policies in Korea, in

Theory of Taxation for Developing Countries, edited by D.Newbery and N. Stern, New York: Oxford University Press forthe World Bank.

7. Croppenstedt, A., Bellú, L.G., Bresciani, F. and DiGiuseppe, S.2007. Agricultural Policy Impact Analysis with Multi-MarketModels: A Primer. ESA Working Paper No. 07-26.

8. Deardorff, A.V. and Stern, R.M. 1997. Measurement of NonTariffBarriers. OECD Economics Department, Working Papers,No. 179, OECD Publishing.

9. Dorosh, P. and Haggblade, S. 1997. Shifting sands: the changingcase for monetizing project food aid in Bangladesh. WordDevelopment. 12:2093-2104.

10. Dorosh, P., del Ninno, C. and Sahn D. 1995. Poverty alleviationin Mozambique: a multi-market analysis of the role of food aid.Agricultural Economics. 13: 89-99.

11. FAOSTAT. 2010. www.FAO.org.

12. Faryadras, V. and Moghadasi, R. 2004. Evaluating Iranianagricultural tariff system from 1982-2003. AgriculturalEconomics and Development. 48:1-36. (in Persian)

13. Fuller, S., Fellin, L. and Salin, V. 2003. Effect of liberalized U.S.-Mexico rice trade: A spatial, multiproduct equilibrium analysis.Agribusiness. 1: 1-17.

14. G. Gomez-Plana, A. and Devadoss, S. 2004. A spatial equilibriumanalysis of trade policy reforms on the world wheat market.Applied Economics. 36:1643–1648.

15. Goletti, F. and Rich, K. 1998. Policy simulation for agriculturaldiversification, Report prepared for the UNDP project onStrengthening Capacity Building for Rural Development in VietNam. Washington Dc: International Food Policy ResearchInstitute.

16. Goletti, F. and Rich, K. 2002. Multimarket models and policyanalysis: An application to Malawi. Washington, DC: WorldBank (Processed).

17. Harker, P. T. 1986. The core of a spatial price equilibrium game.Journal of Regional Science. 3: 369-389.

18. Hosseini, M.A. 2004. Iranian agricultural trade policy anddetermining tariff equivalent of its imports. Commerce

Researches. 8(32):1-40. (in Persian)

19. Jensen, J. and Tarr, D. 2003. Trade, exchange rate, and energypricing reform in Iran: Potentially large efficiency effects andgains to the poor. Review of Development Economics. 7:543–562.

20. Jeong, K., Garcia, P. and Bullock, D. 2003. A statistical methodof multi-market welfare analysis applied to Japanese beef policyliberalization. Journal of Policy Modeling. 25: 237–256.

21. Komijani, A., Moghadasi, R., Gilanpour, O. and Noori, K. 2001.Identification non-tariff barriers and computing tariff equivalentof them in the agricultural sector of Iran. Agricultural Economicsand Development. 35:65-77. (in Persian)

22. Lundberg, M. and Rich, K. 2002. Multimarket models and policyanalysis: An application to Madagascar. Washington, DC: WorldBank (Processed).

23. Minot, N. and Goletti, F. 1998. Export liberalization andhousehold welfare: the case of rice in Viet Nam, AmericanJournal of Agricultural Economics. 80:738-749.

24. Minot, N. and Goletti, F. 2000. Rice Market Liberalization andPoverty in Vietnam. Research Report 114, Washington, D.C.:International Food Policy Research Institute.

25. Najafi, B. 2003. Investigation of government rice policy,problems and approaches. Agricultural Economics and

Development. 8(31): 7-29. (in Persian)

26. Noori, K. 2004. Evaluating the efficiency of rice price policies inIran. Research and Construction. 61:74-81. (in Persian)

27. Noori, K. 2006. Evaluating the Iranian rice market distortions onsupply, demand and import quantities. Research andConstruction. 73:17-25. (in Persian)

28. Rahmati, D. and Zibaei, M. 2008. Impact of import tariffreduction on poverty in Iran. Agricultural Economics. 2(2):35-50.(in Persian)

29. Rutherford, T. 1995. Extension of GAMS for complementarityproblems arising in applied economic analysis. Journal ofEconomic Dynamics and Control. 19: 1299- 324.

30. Sadoulet, E. and de Janvry, A. 1995. Quantitative DevelopmentPolicy Analysis, Baltimore: Johns Hopkins University Press.Read chapters. 10-12.

31. Singh, I., Squire, L. and Strauss, J. 1986. A Survey ofAgricultural Household Models: Recent Findings and Policy

Implications. The World Bank Economic Review. Vol. 1, No. 1:149-1 79.

32. Stifel, D. and Randrianarisoa, J.C. 2006. Agricultural policy inMadagascar: A seasonal multi-market model. Journal of PolicyModeling. 28: 1023–1027.

33. Takayama, T. and Judge G.G. 1971. Spatial and Temporal Priceand Allocation Models. Amsterdam: North-Holland.