Effects of energy subsidies on production costs and finished price of cotton crop (Case study: Golestan Province)

Document Type : Research Paper

Authors

1 M.Sc. Graduate, Dept. Agricultural Economics, Gorgan University of Agricultural Sciences & Natural Resources, and Agriculture in Development Planning Applied Science Behshahr, Iran

2 Assistant Prof., Dept. of Agricultural Economics, Faculty of Agricultural Management, Gorgan University of Agricultural Sciences & Natural Resources, Iran.

3 Professor, Dept. og Agricultural Economics, Faculty of Economics & Agricultural Development College of Agriculture & Natural Resources University of Tehran, Karaj, Iran.

4 Coach and former Managing Fund Careers Ministry of Labor and Social

Abstract

The cotton is unique plant in terms importance of food, medicine and industrial uses. Because of the considerable exchange technology and property income, employment and relative advantage of cotton, it is considered as a strategic and important crop to the national economy. During past two decades, trade and pricing policies on production, cultivated area and export of cotton has been more effective than any other regional crops. This study was carried out to determine the effects of removing energy subsidies policy on costs of cotton and its production, contribution of agricultural inputs costs and energy carriers and final price of the cotton in Golestan province. During a time-scaled, data was collected from production cost database of agricultural products and 20 questionnaires completed by scholars and experts using the Delphi approach. The costs of production, agricultural inputs, and final price of cotton were calculated by using modified industrial cost accounting techniques into three adjusting subsidies scenario "before policy accomplishment" (, price of gasoline and electricity in 165 and 20 Rials, respectively), "during the policy accomplishment "(the current situation with the price of gasoline in 1500, 3500 and electricity in 140 Rials) and" after policy implementation "(final price of energy carriers, the price of gasoline and electricity in 550 7900 Rials, respectively. The results showed that the cost of cotton production was increased during (1&2) and after implementation of the policy as 5, 12 and 23 percent, respectively, due to increasing gasoline. In terms increasing electricity price, cotton production was increased during and after implementation of the policy as 42 and 185 percent, respectively. Therefore, causing implementation of the policy, final price of cotton production will be increased from 7130 to 8190 Rials (complete removal of gasoline subsidies) and 13200 Rials (complete removal of electricity subsidies). Thus, it is recommended that removal of subsidies was done as gradually and warily program.

Keywords

References

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Iranian Journal of Cotton Researches
Volume 1, Issue 2 - Serial Number 2
December 2014
Pages 29-41

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