Analysis of the effects of reforming the floor price support policy of row milk on the supply chain of dairy products

Document Type : Original Article

Authors

1 Department of Agricultural Economics, Tarbiat Modares University .

2 Department of agricultural economics, tarbiat modares of university

3 Department of agricultural economics. Tarbiar Modares University

4 Department of Agricultural Economics, Tarbiat Modares University

10.30490/aead.2023.361246.1499

Abstract

The pricing policy of the government during the supply chain of agricultural products has always been one of the challenges of the policy markets of this sector, and one of the difficult tasks of the policy markers is to choose between the set of scenarios that are feasible in the implementation of the agricultural pricing policy from the executive and legal point of view. In the current study, the scenarios of increasing the floor price support policy and their effect on raw milk at the beginning of the chain and dairy products at the end of the supply chain in 2019 were investigated. The obtained results show that according to the elasticities of the supply and demand functions of dairy products, the amount of additional welfare changes of raw milk producers and factories producing dairy products increases with an increase of 10 to 100 percent of the price support policy. increase in the support policy of the floor price reduces the welfare surplus of the consumers of dairy products. Also, social welfare surplus increase with the implementation of the floor price increases policy, so that in the case of 10% and 100% floor price policy, it is value reaches 8985 and 160537 billion rials, respectively. it is suggested that to increase the efficiency and effectiveness of the floor price support policy, the mutual effects of this policy on successive supply chains and social welfare surplus regarding agricultural products should be taken into consideration by policymakers and economists.

Keywords

Main Subjects

Agricultural Economics and Development

Articles in Press, Accepted Manuscript
Available Online from 14 August 2023

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