Analysis of Effect of Trade Liberalization on the Growth of the Agricultural Sub Sectors

Document Type : Research Article



In the study, the effect of trade liberalization on the growing agricultural sub sectors of Iran was examined during the period 1992-2010. For this purpose, indices of ratio of export to GDP and ratio of import to GDP were calculated as indices of trade liberalization for each agricultural sub sectors including agronomy-horticulture, animal husbandry, fisheries and forestry. The impact of trade liberalization on agricultural sub sectors growth was evaluated using Solow growth model and fixed effects method. Based on the results, the coefficient of share of exports from GDP is obtained very small and non-significant, but the coefficient of share of import from GDP is obtained quite significant and larger from exports coefficients. Its reason is the high volume of imports compared to the exports of agricultural products. Based on the results of the study, the growth of the agricultural sub-sectors is under the influence of trade liberalization in products import further, and this impact is negative. Thus, supporting government policies in this sector should be higher, because farmers constitute the relatively poor cortex. Among these support policies can noted to creating appropriate infrastructure for increase domestic production with lower cost as the entry of new and appropriate technologies, suitable guaranteed price policy for domestic producers and protect from they against foreign competition.