Assessment of Indirect Production Function and Budget Constraint in Khorasan Provinces' Cotton Production

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An Indirect Tarns-log Production Function was employed to estimate the demand functions for such inputs as: fertilizer, seed, pesticide, water recourse and machinery as subject to budget constraint and while using data related to cotton producers in the three provinces of North Khorasan, Khorasane Razavi, and South Khorasan in 2007-8. Lagrange Coefficients with relation to cotton producers in the three provinces are 1.08, 1.13 and 1.23 respectively, indicating that cotton producers are facing budget constraints. Also, results indicate that the economic sizes for these provinces are decreasing and recorded as 0.918, 0.916 and 0.813, respectively.

Keywords: Budget constrains, Indirect Production Function, Input demand, Cotton, Khorasan.

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