Evaluating the Effect of Removing of Gasoil Subsidy on the Cropping Pattern of Rey County

In this study, the effects of removing of gasoil subsidy on the cropping pattern of planting crops in Shahre Rey were assessed. Initial information was gathered using completing 105 questionnaires. The selected statistical sample is consisted of some Shahre Rey farmers who were working on their farms in 2009-2010. PMP model with maximum entropy (ME) was used for evaluating the policy of removing of gasoil subsidy. The effect of the gasoline subsidies elimination through changes in water prices and machinery has been studied. According to the results, along with the policy of removing subsidy for gasoil, the extent of planted areas decreases for all crops in all groups (1, 2 and 4) except wheat and cauliflower (group 3) which increases 26.639% and 5.443% respectively. Also, regarding policy of removing of gasoil subsidy, the using rate of inputs has decreased and the output in all groups (1, 2, 3 and 4) has declined amount 28.833%, 29.513%, 29.636%, and 29.143% respectively. Therefore, the results indicated that the gasoil subsidies elimination policy has not any benefit for farmers.

JEL Classification: Q28, L71, C61, C01

Keywords:
Subsidy, Cropping Plan, Positive Mathematical Programming, Maximum Entropy, Gasoil, Rey