Comparative Advantage of Potato Production and Related Government Policies in Hamedan

In order to bring about rural-urban regional balance, the government needs to support products in which each region has comparative advantage. The main purpose of present study is to determine the impact of government policies on present situation of potato production in Hamedan and to determine its comparative advantage compare to other provinces of Iran. Policy analysis matrix is used to determine comparative advantage of potato using data collected for crop years of 2010-2012. The results show that in spite of a decrease in government’s support of the product the indirect taxes levied on the relevant inputs are smaller in Hamedan and the subsidies allocated for relevant inputs are bigger in Hamedan compared to other provinces. The indices of policy analysis matrix show improvement in profitability potato in Hamedan for period of study.