Sources of Output Growth in Iranian Agriculture:An Input-Output Analysis



The sources of output growth of Iranian agriculture over the years 1986-2001 has been examined, using a decomposition method within the input-output (IO) framework. The three comparable IO tables of 1986, 1991, and 2001 have been employed as the main data sources. Output changes from a demand side perspective, and decomposition of the growth of output into components attributable to consumption demand, investment demand, export, import substitution, as well as intermediate input use have been accounted for. Throughout the study, the economy of Iran has been divided into 20 sectors. Since the focus of the study is to identify the sources of output growth in agricultural sector, the sector is further divided into four sub-sectors with the relative prominence of sources of growth being determined for each of the sub-sectors. Results revealed that increase in intermediate input demand, increase in investment demand as well as increase in export for final goods are respectively, the main factors contributing to the output growth in farming, livestock, hunting and fishery, and forestry sectors over the 1986-91 period. As for 1991-2001 period, household demand for final products is the main source of output growth as regards the first three sectors. This factor in joint with government consumption explains the output growth in the forestry sector over the years 1991-2001. In addition, export expansion contributes to the growth of output in all the agricultural sub-sectors except for the livestock. In total, the share of contribution to output growth from intermediate demand has declined, while that from export and consumption increasing.