Investigating the effect of the gap between free and official exchange rates on the import of livestock inputs (Case study: soybean meal, corn and barley)

Document Type : Original Article

Authors

APERDRI

10.30490/aead.2024.361732.1506

Abstract

One of the important concerns of policymakers in Iran is the management of changes and crises created in the foreign exchange market. Considering the effect of the exchange rate on the trade of agricultural inputs on the one hand, and the close relationship between the import of agricultural inputs and food security on the other hand, knowing the effects and relationship of the exchange rate with the trade of agricultural inputs is of particular importance for proper policy making in this sector. In this regard, the aim of the present study is to investigate the effect of the gap of free and official exchange rate on the import volume of livestock inputs using the Markov switching approach during the years 1993-2021. The results of the Markov switching model also showed that the relationship between the gap of free and official exchange rate gap and the import quantity of soybean meal, corn and barley is non-linear. estimation results of the Markov switching model also showed that the effect of the gap between the free and official exchange rates on the import volume of corn, barley, and soybean meal is positive and significant, and with the increase in the gap between the free and official exchange rates, the demand for corn, barley, and soybean meal imports also increases. Therefore, it is suggested to reduce the free and official exchange rate by applying appropriate policies, timely purchase of inputs from global markets and review of the business process of livestock and poultry institutions

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Main Subjects

Agricultural Economics and Development

Articles in Press, Accepted Manuscript
Available Online from 29 May 2024

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