The impact of government Support policies of rice supply in Iran

Rice is one of the most important crops and is considered as strategic commodity in many countries of the world, thus it seems necessary to be supported. Guaranteed purchase of crops is the most important policies of the agricultural sector in our country that has been approved in 1999. The government is obliged to support the production of basic agricultural crops by guarantying the purchase of crops including wheat, rice, barley and … every year. So this study investigates the impacts of government policies, such as import, the guaranteed price of rice and Domestic Resource Cost (DRC) on the supply of rice in the period of 1990-2013. The results show that guaranteed prices of rice with a lag has a significant positive effect on the supply of rice with elasticity of 0.2. Rice import also has a negative impact on rice supply and the elasticity this variable is equal to -0.7. DRC index as an indicator of government support for the production of the crops also had a negative impact on rice supply.