The Influence of Price Support Policy on Cotton Acreage Development in Golestan province

Document Type : Research Paper

Authors

1 Agricultural Economics, Scientific Board Member of Agriculture and Natural Resources Research Center of Golestan province

2 Master of Agricultural Economics, Tehran Payam-e-Noor University

Abstract

This study has conducted in order to investigate the impact of supportive price policy on the development of cotton acreage in Golestan province. For this purpose, time series data, ARDL and ECM models were used. Based on the results, although the impact of the increase of cotton relative price on its acreage in the short and long-term time horizons was significantly positive, but it is not substantial. So motivating farmers to increase cotton acreage requires a significant increase in its price compared with the price of wheat due to the cost load, making it will not be possible for the government practically. Therefore, relying solely on price policy supports in current form is not remedial and non-price supports for the realization of increasing cotton acreage and production is necessary. Based on the results, the impact of rice acreage on changes in cotton acreage in this province is negative as expected but this impact was not significant. The results also indicate that the prevalence of Canola acreage in Golestan province from the mid-seventy decade, did not affect the cotton acreage and it was not a competitor product. According to the adjustment coefficient (-0.64) in error correction model, if appropiative support price and non-price policies to be adopted, cotton acreage will return to its equilibrium amount in the short term. 

Keywords

References

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Iranian Journal of Cotton Researches
Volume 3, Issue 2
March 2016
Pages 27-39

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