Effects of Red Meat Price Change on Welfare of Producers and Consumers in Iran

Red meat is a major item in Iranian food basket and its price change is expected to have substantial effect on consumers, income. Therefore, it is necessary to identify factors affecting meat market. In the present study, supply and demand functions of meat for period 1982-2012 with ARDL model were estimated. Then, the impacts of 5%, 10% and 20% price increases on welfare of producers and consumers for period of 2002- 2012 were evaluated. The results showed that the effect of increase in red meat prices in three senarios had negative impact on welfare of producers and consumers. Therefore, it is recommended to subsidize production inputs, especially feed to avoid excessive increase in prices.