The Impact of Supportive Policies and Targeted Subsidies on Urban Household's Food Security Index in Iran

This study analyzes the effect of Aggregate Measurement of supportive policies on Urban Households’ Food Security Index in Iran by applying Auto Regressive Distributed Lag (ARDL) for the period 1982 – 2012. In order to achieve this goal, Aggregate Households’ Food Security Index (AHFSI), Aggregate Measurement of Support (AMS), Inflation Rate and virtual variables for the targeted subsidy law period have been used. The results show that the Aggregate Measurement of Support has meaningful and positive effect on food security in both short-term and long-term. Also, the virtual variable for the targeted subsidy law period and inflation rate have a meaningful and negative effect on food security. Due to the fact that the targeted subsidy law has not have any positive impact on food production and consumption through the early years of its enactment, the agriculture sector in Iran, primarily requires a targeted support and accordingly calls for appropriate conditions for enactment of targeted subsidy law in order to mitigate its negative effects. Therefore, a constructive appraisal of supportive policies, with a view to developing agriculture sector, can increase the productive capacity and improve the marketing channels for agricultural products by providing security and encouraging investment in this sector; hence the improvement of food security in Iran.