An economic analysis of the relationship between agricultural credit and rural poverty in Iran: Bayesian approach

Subject Areas : پژوهش‌های اقتصاد روستا

Tahereh Ahani ¹ , Ahmad Ali Rezaee ² , Mohammad Bakhshoodeh ³

1 - کارشناس ارشد مهندسی اقتصاد کشاورزی، دانشگاه شیراز
2 - کارشناس ارشد علوم اقتصادی، دانشگاه اصفهان
3 - استاد بخش اقتصاد کشاورزی، دانشگاه شیراز

Received: 2014-11-06 Accepted : 2015-01-20 Published : 2015-01-20

Keywords: Funding, Agricultural growth, Bayesian Vector Autoregressive Approach,

Abstract :

Quantity and quality of resources allocated to the agricultural sector, the amount of employed capital and the level of knowledge and technical equipment of producers are factors affecting on growth of this sector and reduction rural poverty. One of the main problems in agriculture is lack of capital so funding can be considered as a way of capital accumulation and thus reduces rural poverty. Therefore, in this study we examined the relationship between allocated funding to agriculture and rural poverty. Then, by definition of scenarios, we test whether the change in the volume of allocated credit to agricultural sector will have impact on rural poverty? To verify the above objectives, we used econometric model Bayesian Vector Autoregressive and  also Simulation of defined scenarios, reducing allocation funding to zero, getting funding  in the actual amount and increase of  allocated funding to twice of initial value in  Bayesian model. Therefore, all calculations and mathematical operations in this research performed by Eviews7 and Matlab6 and using time series data from for 1980 to 2012, Iran. The main findings of this study show that allocated funding to agricultural sector has a positive effect on income growth and poverty reduction in this sector. The positive effect will have increasing trend with increasing of at least credit amount to double of current amount. Also results show that income growth in the agricultural sector has positive effects on volume of credit granted to this sector.