The Effects of Energy Carriers' Price Surging on Welfare of Wheat Producers in Fasa City

Document Type : Research Paper

Authors

• hassan azarm
• mohammad bakhshoodeh

shiraz-shiraz university

Abstract

In the present study, the cross sectional data of 2013-14 were from 201 irrigated-wheat producers in Fasa applying multistage random cluster sampling to investigate the effects of energy carriers’ price rising on welfare producers of wheat in the region.The results showed that an increase in price of electricity has stronger impact on increasing the production costs, decreasing production and benefit, and as a result on the welfare of wheat producers than is expected to have from increasing price of gas oil. Therefore, targeted electricity subsidy should be implemented with further considerations. Moreover, to keep the producers welfare unchanged, a 100 percent increase in the price of gas oil and electricity, should be compensated with increasing wheat price to 13340 and 16223 rials per kg. Finally, with increasing returns to scale characteristics of wheat production in Fars province, the government can grant credits to provide conditions for farmers to adopt technology change for optimizing consumption of energy in order to reduce costs or maintain the welfare and as a result to increase production of wheat.

Keywords

• energy carriers
• indirect production function
• welfare producer
• irrigated wheat
• fasa city

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