Effects of Eliminating the Water Subsidy on Production of Ornamental Flowers

Continue the policy of subsidizing input of production could be one factor contributing to the low efficiency of input and thus prevent the development of the country. In this study, positive mathematical programming approach according to maximum entropy was used to evaluate effects of eliminating the water subsidy on the production of ornamental flowers. Data were collected by from beneficiaries of ornamental flowers of Mahalat city, during crop year 2013-2014. The results showed that the policy of increasing prices of water lead to decline in production and benefit. The maximum decrease in production is related to wallflower, Lilium and is Gerber respectively. The results showed that the flowers of Lilium and Gerber have higher economic performance compared to other types of produced flowers and the most production decrease is related to Shabbo.

JEL Classification: H24 ,Q 48

Keywords:
Subsidy, Liberalization, Water, Positive Mathematical Programming, Ornamental