Investigating the effect of supportive policies on cotton acreage in Golestan Province

From the past cotton has been introduced as one of the basic and strategic goods in Iran. Golestan province, during the past years has provided a large part of the nation's cotton requirement and has become one of the main poles of cultivation of this product. In this paper, the effects of support policies on Golestan's cotton supply has been investigated by using variable of producer support estimate of cotton to competing products and estimating irrigated and dryland acreage response equations through Nerlove's partial adjustment model. The results shows that the positive effect of producer support estimate of cotton to its competing products on cotton acreage has been significant in both irrigated and dryland models. Supply elasticity’s of this variable in the irrigated model is 0.12 in short run and 0.27 in long run. In dryland model, this elasticity is 0.16 and 0.26 respectively in short run and long run. According to the results, in addition to increasing the relative profitability of cotton compared to its competitors and reducing non-programing import, rising price and non-price supports of cotton like guaranteed prices in order to motivate farmers to increase the supply of this product is suggested.