Optimization of orange export subsidy and its effect on welfare of producer of this product in Iran

Document Type : Research Paper

Authors

• Seyed-Ali Hosseini-Yekani ¹
• Fatemeh Kashiri Kolaei ²
• Tahereh Ranjbar Malekshah ³

¹ Associate Professor, Department of Agricultural Economic, Sari Agricultural Science and Natural Resources University

² Ph.D. of agricultural economics

³ Ph.D. Student in Agricultural Economics, Sari University of Agricultural Science and Natural Resources, Sari.

10.30495/jae.2022.21475.2020

Abstract

In order to develop agricultural exports and despite the importance of the production of citrus in this sector, should be provided the necessary support from the producers in the export, in order to use the production capacity of this products in Iran. In this regard, in the present study, using a mathematical programming model, the optimal level of subsidy for export of orange has been calculated and evaluated its effect on the welfare of the domestic suppliers of orange. The information required in this study was based on 2017, which has been collected in the form of documents. The results of the research indicate that the export subsidy for orange in 2017 has not been optimal and for optimization, the subsidy increases from 5,000 Rials to 7918 Rials per kg of orange exports. By paying this subsidy, the export and supply of orange increased by 73.6% and 0.41%, respectively, and demand decreased by 0.66%. Rising supply along with rising domestic prices will lead to 0.82% increase in the welfare of the orange suppliers.

Keywords

• Export subsidy
• support policies
• orange
• optimization
• Iran

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