Prioritization the Factors Affecting the Success of a Commodity in Agricultural Ring of Iran Mercantile Exchange

The market of agricultural products has always faced with a lot of limits and structural problems in Iran. The most part of these problems are related to non development of agricultural economy of our country and also traditional and inefficient structure of the market of agricultural products. According to non-transparency of market information, its traditional structure, as well as the risk of agricultural activity, it was expected that agricultural ring of Iran Mercantile Exchange (IME) is effective in order to prevent the above mentioned obstacles; however from 2007 up to now, less than 1 percent of agricultural products arrived to this market and IME couldn’t have a leading role in the market of agricultural products. Although previous studies have examined some of the obstacles of IME development, but few researches have investigated choose of suitable products for trading across this market. In this study, it is tried to study the performance of agriculture ring of IME with focus on commodity selection criteria of such markets.
In this study, two approaches of conventional taxonomy and weighted taxonomy are used in order to achieving the goals. In conventional taxonomy, component coefficients are constant and equal to one. But at the same weight taxonomy approach, data were weighted by Shannon entropy method. The required data of this study have been gathered from official websites of Statistical Center of Iran, Iranian National Standards Organization, Ministry of agriculture Jihad and Iran Mercantile Exchange. It is worth noting because of lack of access to updated data; the data of 2013 was used in this research.
Because of lack of data, 10 out of the 19 accepted commodities of IME were analyzed. The most obvious difference between the two methods of conventional and weighted taxonomy in this study is removal of pistachios in the conventional taxonomy. After obtaining the distance matrix, it was observed that pistachios have passed upper bounds and therefore, this product has been removed for the rest of the calculations. In the weighted taxonomy through Shannon entropy, none of the goods is removed. Finally, rice and maize identified as two top products on the list of most suitable commodities for trading at IME. Wheat and tea are also got the ranks of third and fourth respectively in conventional and weighted taxonomy approaches. According to the Iranian people's taste, good choice of rice as the first rank in this study was not surprising and is in line with reality. This product has an important role in satisfying the protein and calories of the world people. So, the more rice trades at IME, the more agricultural ring is successful. Corn, wheat and tea have also comparative importance across the studied agricultural commodities and expanding their trades at IME would have a major contribution in the success of agricultural ring.
As mentioned, rice has upper priority across the other studied commodities for trading at IME. After rice, corn, wheat and tea ranked second, third and fourth more suitable commodities. According to the results of this study, it is suggested that, factors such as the coefficient of importance and continuity in supply should consider as importance factors of commodity selection. According to the ranks of selected commodities, direct support of government could have an important role in the success of commodity in trading at IME. In order to successful entrance of agricultural commodities to IME, further support from the government is required. It is also proposed that free regional public educations are planned for small and large farmers to understand the agricultural ring of IME and its common standards and trading strategies. A package of incentive policies such as purchase guarantees in the absence of successful trading at IME and partial waivers on transporting costs to the warehouses is also proposed. Next to the contrary, it is also required to have some punishment policies so that in the absence of trading at IME for some farmers, financial supports such as loans or guaranteed purchase of those farmers would be far out of reach. Also decreasing the distance between IME and farmers through expanding the number of accepted warehouses in production areas by IME could ease the entrance of farmers to this market.