Investigating the Effect of Government Price Support Policy of Agricultural Crops on Factor Productivity Growth in Iran

Agricultural sector has long been strongly supported in Iran. The main purpose is to show the relationship between price support and total factor productivity growth. This study is restricted with the lranian agricultural sector and data has been gathered in the period from 1987-88 to 1998-99. The selected crops include wheat (irrigated, rain - fed), barley (irrigated, rain -fed), rice, cotton, sugerbeet and potato. Using by pooled cross section and time series data and the suitable model, efforts have been made to answer the following questions. Is there any relation between price support and proudctivity growth in agricultural products? Is the impact of price support and the productivity growth in agricultural products the same results across different crops? The results show that the average productivity growth in irrigated crops is negative and in rain‎- fed crops is positive. Also, the statistical test demonstrates that productivity growth is positive and significant at ten percent confidence interval for only three crops, that is to say: wheat (rain-fed), barley (rain-fed) and sugerbeet.