Investigating the Role of Changes in Export Composition in the Growth of Agricultural Products: Analysis within an Input-Output Framework

Among the sources of production growth, export is the major component strongly influenced by government policies. This study aimed mainly at investigating the effect of export composition change (ie the commodities’ export share over times) on the growth of agricultural production using the structural decomposition analysis method. For this purpose, firstly, the growth of production was decomposed into four main factors including the effect of change in domestic final demand, the effect of change in exports, the effect of technology change and the effect of import substitution. Then, the effects of change in exports were also subjected to further decomposition to determine the effect of the export composition change on production growth in more details. This operation was performed using input-output tables of 1991 and 2001 which were deflated. According to the results, the change in exports had a positive effect on the production growth of all the agricultural sub-sectors, except for livestock and poultry products. In addition, decomposing the effect of exports showed that the growth of crops, horticulture, fish and other aquaculture products was mostly influenced by increasing their own exports. However, in the case of livestock and poultry sector, the negative effect of decline in exports of food products and beverages caused to reduce the growth of this sector. These results suggested that to increase the agricultural production, in addition to the importance of an increase in the exports of agricultural raw materials, investment in the development of food industry to process high-quality products characterized by competitiveness in the world markets might be a major driver of growth in the agricultural raw products.