Optimization of Internal and External Trade of Iranian Pistachios in a Spatial Equilibrium Model Framework

Given that pistachios is one of the most important agricultural products which Iran has a comparative advantage in the production of it, and is a constituent of the main items of Iran's non-oil export basket, Optimizing its internal and external trade could have a major role in promoting the welfare of producers and consumers of agricultural products in Iran. The purpose of this study was to provide an optimal pattern for the domestic and foreign trade of pistachios so that the maximum possible net social welfare will be produced through its implementation. In order to achieve this goal, a spatial equilibrium model has been used that will determine the price of pistachios as an endogenous variable. Optimization results show that the application of the proposed pattern of spatial equilibrium model increases the welfare of producers, consumers and the total welfare of the pistachio market. Furthermore, although a part of pistachio exported in the current model should been entered the domestic trade cycle rather than exports on the base of the optimal model; implementation of the proposed model cause to increase the return per unit of export products over the current situation.

JELClassification: C02, C61, D41, F10

Keywords:
Optimization Internal Trade, External Trade, Pistachios, Spatial Equilibrium Model, Iran