Welfare Effects of Agricultural Policies in Wheat and Bread Markets

Evaluation of agricultural policies is an important issue in agricultural economics literature. Economists evaluate policies on base of their welfare effects. The objective of this study is Outcome subsidies removing for wheat and bread and its effect on producers and consumers. The minimization of changes in welfare loss is used in this study. The results of the welfare outcomes in wheat market show that government protects consumers more than producers by using consumption subsidy and guarantee price simultaneously. The optimizations of governments’ policy in wheat market reduce governments’ cost and welfare loss by reduction in protection from consumers. The results of optimization in wheat market policies shows that government costs and loss of social participation through lowering the main consumer protection were reduced. Per capita consumption of bread and share the cost of household food costs after adopting the optimum level of policy tools will dramatically change and optimal level of policy decisions on the bread cost share of rural household is more than urban households