The Relationship between Monetary Policies and Farmers’ Welfare to Reduce Poverty in Iran

Subject Areas : Agricultural Economics Research

الهام Pourmokhtar ¹ (دانشجوی دکتری، اقتصاد کشاورزی،دانشکده کشاورزی و منابع طبیعی، واحد علوم و تحقیقات، دانشگاه آزاد اسلامی تهران.)
رضا Moghaddasi ² (دانشیار، اقتصاد کشاورزی،دانشکده کشاورزی و منابع طبیعی، واحد علوم و تحقیقات، دانشگاه آزاد اسلامی تهران.)

Received: 2016-09-04 Accepted : 2016-12-14 Published : 2017-01-20

Keywords: Welfare, Farmers, Domestic Terms of Trade Index, Monetary Policies,

Abstract :

    Purchasing power of earned income and family consumption expenses, are among the main drivers of farmers’ welfare. One can predict any improvement in well-being of agricultural producers based on their purchasing power enhancement which, in turn, is related to domestic terms of trade index (DTOT). Present study aims at analyzing the relationship between monetary policies and farmers' welfare using vector autoregressive model for the period from 1981 to 2012.The Johansen test results confirm that DTOT index is directly and significantly affected by sector growth, inflation, interest and real exchange rates in the long term. Furthermore, the estimated error correction model recognizes a dynamic two-period lagged relationship among aforementioned variables in the short term. Reconsideration of agricultural support policies in order to neutralize the possible adverse impacts of macroeconomic variables’ changes is recommended.

References:

- صباغ کرمانی، م. و شقاقی شهری، و. (1384). عامل‎های مؤثر بر نرخ ارز واقعی در ایران (رهیافت خود رگرسیون برداری) .پژوهش­نامه اقتصادی.(5): 76-37.

- Aleem Khan, A., Q. M., Ahmed & R. M. Ashiq. )2005(. Agricultural terms of Trade in Pakistan: Issues of Profitability and Standard of Living of the Farmers.The Pakistan Development Review.Papers and Proceedings PART II Twentieth Annual General Meeting and Conference of the Pakistan Society of Development Economists Islamabad. 12: 515-537.

- Ali S., Mustafa, M. Q., & Shahbazi I. A. (2013). Agriculture Value Added and IncomeInequality in Pakistan: A time series analysis. Research Journal of Economics, Business and ICT. 2:25-33.

- Akiyarna, T. & D. Larson. (2004). Rural Development and Agricultural Growth in Indonesia, the Philippines and Thailand. Canberra: Asia Pacific Press.

- Coudouel A., J. S. Hentschel and Q.T. Wodon. (2002) Poverty Measurement and Analysis. Washington D.C.: The World Bank.

- Enders, W. (2004). Applied Econometric Time Series, John Wiley & Sons, New York.

- Gujarati, D.N. (2004). Basic Econometrics. (4 edn) New York: McGraw Hill.

- Hudaya, D. )2009). Faktor-Faktor Yang Mempengaruhi Tingkat Kemiskinan DiIndonesia "the Factors Affecting Poverty in Indonesia", Thesis. Bogor: Bogor Agricultural University.

- James, T. Jane, K. & Madhur, G. (2007). Rural Investment to Accelerate Growth and Poverty Reduction in Kenya, IFPRI Discussion Paper 00723, International Food Policy Research Institute< www.ifrpri.org>.

- Jayadi. (2012). The Dynamic Analysis of Inflation Rate and Farmers’ Welfare for Rural Poverty Reduction in Indonesia, International Institute of Social Studies.

- Kirchgassner, G. & Wolters, J. (2007). Introduction to Modern Time Series Analysis, Springer Publication, New York.

- Lachaal, L & Womack, A.W. (1998). Impacts of Trade and Macroeconomic Linkages on Canadian Agriculture, American Journal of Agricultural Economics, Vol 80.

- Letsoalo, A. & Kirsten, J. (2003). Modeling the Impacts of Macroeconomic and Trade Policies on the South African Agricultural Sector. Annual Conference of the Agricultural Economic Association of South African (AEASA). October. 2- 3.

- Lütkepohl, H. (2005). New Introduction to Multiple Time Series Analysis, Springer, New York.

- Mehrgan N., & Nassabian S. (2010). Agriculture Growth and Income Inequality in Iran.America Eurasian Journal of Agricultural and Environmental Sciences. 3: 555-573

- Misbahuddin, S., Rauf, S. & Fattah, S. (2015). Strategy and Analysis on Economic Behaviour of Rice Farmer Houshold in South Sulawsi Province in Indonesia, International Journal of Research in Social Sciences.4:73-84

- Norton, G.W. and J. Alwang and W.A. & Masters. (2006). The Economics of Agricultural Development. New York: Routledge.

- Rashid, S.H. (2012). Domestic Terms of Trade for Agriculture in Pakistan and Agricultural Income Tax.Presentations made at the PSSP First Annual Conference - December 13, 14, 2012 – Planning.

- Shane, M., Liefert, W., Morehart, M., Peters, M., Dillard, J., Torgerson, D., & Edmondson, W. (2009). The 2008/2009 World Economic Crisis: What it means for U.S. Agriculture. Washington: USDA Economic Research Service, E– Outlook Series WRS-0902.

- Sudaryanto, T. & Rusastra, I. W. (2006). The Agricultural Policy Strategy in Improvement of Agricultural Production and Poverty Reduction, Journal of Indonesian Agricultural Research and Development, 4: 115-122