Investigating the Price Effects of Agricultural Products with Sustainable Agriculture Approach

Subject Areas : Sustainable production technologies

Jalal Bazarafshan ¹ , Seyed Nematullah Mousavi ² , Bahauddin Najafi ³

1 - Phd. student, Department of Agriculture, Faculty of Agriculture, Morovdasht Islamic Azad University, Morovdasht, Iran
2 - Assistant Professor, Department of Agriculture, Faculty of Agriculture, Islamic Azad University, Marodasht Branch, Marodasht, Iran
3 - Professor, Department of Agriculture, Faculty of Agriculture, Shiraz University, Shiraz, Iran

Received: 2025-01-19 Accepted : 2025-06-15 Published : 2025-06-21

Keywords: Agriculture, Currency, Oil, Social Dissatisfaction, Business Cycles, Markov Switching Regime Change Model,

Abstract :

Objective: In this study, we seek to investigate the effects of agricultural product prices despite currency fluctuations, oil shock and embargo on social dissatisfaction and business cycles of the country in recession and boom regimes

Material and methods: For this purpose, the effect of study variables during the period of 1991 to 2020 is investigated by using the rotation model and Markov switching regime change.

Results: The estimation results of the Markov model for periods of recession and prosperity show; One percent increase in the price of agricultural products, currency fluctuations, inflation and sanctions during the recession, respectively; 54%, 14%, 17%, 12%, the production gap increases during recession and in the second model respectively; 25%, 21%, 15%, 16%, the quality of regulation decreases and social dissatisfaction increases. Also, the length of the recession period compared to the boom period is 18 years versus 12 years in the business cycle model and 19 years versus 11 years of prosperity in the social dissatisfaction model

Conclusion: Therefore, it can be seen that the rate of survival during Iran's recession has a high probability, and all these factors increase the risk of investing in Iran and lead to an increase in business cycles and social dissatisfaction.

References:

Allo, A. G., Satriawan, E., and Arsyad, L. 2018. The Impact Of Rising Food Prices On Farmers’welfare In Indonesia. Journal of Indonesian Economy and Business 33(3), 193-2015.
Arman, S. A. 2014. Asymmetric Effects of Oil Shocks on Business Cycles in Iran's Economy. Quarterly Journal of Quantitative Economics 10(4), 113-146. doi:10.22055/jqe.2014.11626
Bakhshi, P., Raheli, H., and Ghahremanzadeh, M. 2016. The Impact of Oil Revenue Shocks and Exchange Rate Volatility on the Growth of the Agricultural Sector in Iran. Agricultural Economics Research 8(31), 101-122. Retrieved from https://jae.marvdasht.iau.ir/article_2075_9a23df24dda7ebccd0381948add548e6.pdf
Fulton, M. E., and Reynolds, T. 2015. The political economy of food price volatility: the case of Vietnam and rice. American Journal of Agricultural Economics 97(4), 1206-1226.
Haghighat, J., and Pasbani Mirak, F. 2016. The effects of oil price and the exchange rate shocks on price of agricultural Commodities in Iran. Journal of Economic Research (Tahghighat- E- Eghtesadi) 51(1), 71-90. doi:10.22059/jte.2016.57597
Hashimova, K. 2017. The effect of oil price fluctuations on the exchange rate of the national currency of Azerbaijan: Assessment of the years 2014-2017. Baku, Azerbaijan: Center for Economic and Social Development (CESD), CESD Press.
Kapusuzoglu, A., Liang, X., and Ceylan, N. 2018. Macroeconomic impacts of global food price shocks on the economy of Turkey. Agricultural Economics-Zemedelska Ekonomika 64(11).
Lu, Y., Yang, L., and Liu, L. 2019. Volatility spillovers between crude oil and agricultural commodity markets since the financial crisis. Sustainability 11(2), 396.
Naderipoor, H., Nabieyan, S., and Jalaee, A. 2018. Studying the Effect of Business Cycle on Production, Employment, and Investment in Agricultural Sector of Iran. Macroeconomics Research Letter 12(24), 73-94 (In Persian). doi:10.22080/iejm.2018.1938
Noroozi, H., hosseini, S. S., and Ansari, V. 2020. The effect of government support policies on investment in the agricultural sector of Iran. Journal Of Agricultural Economics Research 12(1(45) ), 45-68. (In Persian) SID. https://sid.ir/paper/392174/en.
Ricci, E. C., Peri, M., and Baldi, L. 2019. The effects of agricultural price instability on vertical price transmission: A study of the wheat chain in Italy. Agriculture 9(2), 36.
Saif Elahi, N., Emami, A., Zadari, H., and Tavek, A. 2016. Investigating and comparing the effect of asymmetry of oil price impulses on economic growth (selected oil exporting and importing countries using the GMM method) Financial Economics 11(38), 47-62.
Tang, L., and Sun, S. 2022. Fiscal incentives, financial support for agriculture, and urban-rural inequality. International Review of Financial Analysis 80, 102057.
Xie, H., and Wang, B. 2017. An empirical analysis of the impact of agricultural product price fluctuations on China’s grain yield. Sustainability 9(6), 906.
Zafeiriou, E., Arabatzis, G., Karanikola, P., Tampakis, S., and Tsiantikoudis, S. 2018. Agricultural commodities and crude oil prices: An empirical investigation of their relationship. Sustainability 10(4), 1199.