Document Type : Research Paper
Extended Abstract
Introduction
Among agricultural products, the production and supply of grain demand, both directly and indirectly, play an important role in the food security of the people. Shortages of these products or fluctuations in their quantity can reduce people's social welfare. Considering the importance of grains in the consumption basket of Iranian households and livestock inputs, this study investigates the demand for imported grains during the period 2003-2023. Major cereals include wheat, corn, rice, and barley. Barley and corn indirectly (as the main source of protein production) hold the first place in meeting the nutritional needs in Iran. Iran’s economy is heavily reliant on imports for the supply of these agricultural products, and a significant portion of domestic consumption for these items is met through imports.
Materials and Methods
The data used in this research were obtained from the Statistics Center and the Customs Organization of the Islamic Republic of Iran. This research focuses on four major grains of the country, namely wheat, corn, rice, and barley, which rank first among other grains in terms of import volume. To analyze consumer behavior in economics, various demand functions are utilized. One demand system that holds a special place in economics is the Almost Ideal Demand System (AIDS). Using the Almost Ideal Demand System model for imported grains in Iran, this study estimates the budget share and calculates price and income elasticities.
Results and Discussion
The results show that in some years, the budget share allocated to the import of the four major grain groups has differed, with corn having the largest share and barley the smallest. The elasticity estimation results indicate that the self-price elasticities of wheat, corn, rice, and barley are negative, which is the expected sign. This indicates inelastic demand for these groups. The cross-price elasticities between wheat and corn, as well as between wheat and rice, have been consistently positive throughout the study period. This finding suggests a relative substitution role for these commodities in the import budget system. For rice and barley, the cross-price elasticities have been negatived in some years, which is mainly due to the high-budget share allocated to rice during those years.
Conclusion
Iran is one of the largest importers of grains, especially wheat and corn, in the world. The increasing population growth and low grain yields have created the context for increased demand. Accordingly, in this article, the demand function for grain imports, as well as the compensated (Hicksian) and uncompensated (Marshallian) elasticities for them, were calculated. The overall results of the grain import demand analysis showed that in all cases, the absolute value of Marshallian own-price elasticities is greater than the Hicksian own-price elasticities. This suggests that the reaction to changes in grain prices is greater when expenditures are not compensated. The results also showed that wheat and corn fall into the category of semi-necessary goods, rice into the category of luxury goods, and barley into the category of necessary goods.
Based on the research findings, it is recommended that grain import policymaking in Iran be based on commodity classification (essential, semi-essential, luxury) and their corresponding price elasticities. This requires a distinct approach for each commodity group with the aim of optimal management of import demand.
Acknowledgement
I would like to express my deepest gratitude and appreciation to Dr. Karbasi and Engineer Jalalian for their valuable scientific guidance and support in writing this article
The first author (ST. Mortazavinia) as the principal investigator, collected all data from various websites; wrote all versions of the manuscript and performing its revisions, and also conducted the statistical analysis of the data. The second author (A. Karbasi) as the course instructor, provided valuable guidance throughout the writing of the manuscript. The third author (S. Jalalian) contributed with advice and guidance on model estimation. All authors read and approved the manuscript.
Data sharing is applicable with a formal and justified request for the corresponding author.
The authors avoided data fabrication, falsification, plagiarism, and misconduct.
The authors declare no conflict of interest.
