Calculating Aggregate Measurement of Support for Wheat and Its Causality Relationship with Agricultural Production Growth in Iran

Abstract
The main goal of this study is measuring the amount of support policies and their effects on production growth for wheat. Accordingly, in this study, AMS for wheat is calculated during 1989-2009 and the existence of causality relationship between amount of support and production growth of wheat was investigated by applying Hsiao's granger causality method. Then, long-run relationship between them was investigated by applying Error Correction Model. Result showed that supports growth have not had an effect on growth of production and its yield. Only about acreage, from support growth rate to acreage growth rate for wheat, the causality relationship between them was observed. Therefore, support policies have not could comply the main goal of support policies. So, review in support policies to more attention to increase yield and transmission of subsidies from production stage to other like that marketing, distributing and etc, is suggested.

JEL Classification: F13, Q18, Q17

Keywords:
Support Policies, AMS, Causality Relationship, Hsiao's Method, Error Correction Model