Investigating the Welfare Effects of Rice Pricing Polices in Iran

Rice is considered as one of the most important agricultural products and strategic goods in the most countries around the world including Iran, which seems it is necessary to be supported, therefore, several support policies in the country is used for rice production. In this regard, this study using time series data to estimates the supply and demand functions of rice for investigating the welfare effects of rice pricing policies in Iran. The results of this study show that, the guaranteed price set by the government was 65 percent lower than the market equilibrium price in 2012 (75000 Rials), that cause the loss of 134 trillion Rials to producers and 156 trillion Rials benefits for the consumers. Therefore, it is suggested to increasing the production of rice; determine the guaranteed price at the appropriate level and higher than the equilibrium price of rice increasing the production of this crop.