Economic and Welfare analysis of Milk Guaranteed Purchasing Scheme

Production and consumption of milk and its sub products has always been stressed by governments. To support the production and consumption of milk in Iran, there have been taken various support policies over the time. Price subsidies to consumers, deficiency payment, input subsidies, credit subsidies, import tariffs, control of diseases and guaranteed purchase scheme are the most recent policies to be taken by government to impact on the market to further loss of milk producers. The purchase scheme has been put in action since market and prevents loss of milk producers at November 2014. To examine achievements of the scheme of the affectivity of the price at farm gate severity of implementation phase and welfare effects of the plan were investigated within 7 province of the country. Analysis based on genetic algorithms and matching techniques of the effectiveness of the scheme shows that implementation of scheme has surged milk price up to approximately 748 and 768 Rials per kilogram for the years 2014 and 2015.