Factors Influencing Growth of Crop Production and Horticulture Subsectors in Iran

The agricultural sector is one of the most important economic sectors in Iran with about nine percent share of GDP and the major share of non-oil exports.. The share of farm and horticulture subsectors in the value added agriculture is 66.4 percent. Thus, the growth of these sub-sectors plays a decisive role in the growth of the agricultural sector. In this study, the sources of growth of crop production and horticulture subsectors using vector error correction model and annual time series data have been investigated. The results show that the effect of agricultural research and development expenditures on crop production and horticulture sub-sectors is positive and significant. Also agricultural employment coefficient is elastic in the long run. Finally, it is recommended that more expenditure allocated to agricultural research while present research policies should revised to increase efficiency.