The Effect of Agricultural Investment on Food Price Index in Iran

In this paper we study، in first place، the trends of investment in agricultural sector and food price index in Iran during 1986 – 2011 period and then، we determine the effects of such investment on food price index by using Auto Regressive Distributed Lags (ARDL) and bound testing approach. The results revealed that food price index had negative relationship with investment in agriculture، food production and degree of economic openness. Also، food price index had positive relationship with per capita income، exchange rate and population. Therefore، to reduce food price index، increase in agriculture investment was recommended.