Analysis of Pricing Policy in Cotton Market in IRAN

  Agricultural price policies affect on product stimulation and return of agricultural sector. Among crop production in IRAN, cotton production rank sixth crop base on area cultivation. Agricultural price policies for cotton production implement after Islamic revolution victory. This government intervention affects on price formation and relation between world and domestic price of cotton and cause the protection or tax on cotton producers. In this study relation between domestic price of cotton and world price was investigate by econometrics method. The impact of the policies on producer price distortion computed by nominal rate of protection. The result indicate that there is a positive and longrun relation between FOB and world price of cotton. Also there is no relation found between domestic and world price. During in this study, direct nominal protection rate is positive, and indirect nominal protection rate is negetive, total nominal protection rate is positive in many years and negetive in others.     JEL Classification: E64-M31