The evaluating necessity of government support for wheat producers in Fars province: The application of the concepts of economies of scale

In this study, 2013-14 cross sectional data were collected through questionnaires from 201 irrigated wheat producers in Fasa applying multistage random cluster sampling to investigate the relationship between inputs and determine the returns to scale. The results translog cost function indicated that own-price elasticities of demand are negative for all inputs.Also based on the absolute values of the own-price elasticities and cross elasticities demand coefficients revealed by implementing the policy on input prices the producers do not have the ability to reaction against these policies Therefore, it is suggested to accomplish implementing the policies with more cautious and exact planning. Finally, with increasing returns to scale characteristics of wheat production in Fars province, in the present circumstances it is possible the average cost of production is reduced by increasing the scale of production and farmers to improve profitability will contribute to more economical the production process. Therefore, in such circumstances, it seems necessary government support for producers.