Producer Support Estimate of Agricultural Sector in Iran

This main motivation for supporting policy in agricultural sector can mentioned; economic development, support employment and investment, protect domestic production, reducing dependence on overseas for achieving suitable conditions life. This research calculated Producer Support Estimate (PSE) in agricultural sector base on three exchange rates (official exchange rate, currency market, real exchange rate) that exist in Iran. Also this index, calculated base on constant prices (1997) and current prices. According to the limitation of statistical some time series (Including statistics for road transportation costs); period of data (1995-2010) is used. Results have shown that the PSE calculated during this period has several fluctuations and doesn’t have regular uptrend or downtrend. So that, PSE base on official exchange rate at current prices in 1995-2001 has rising trend, but from 2001 to 2006 has decreased. Of course the PSE has increased significantly in 2004. The reason is that allocated the maximum budget payment by government. Then PSE had uptrend, so that most PSE during the period is owned 2008. This result nearly is true for all three of the exchange rate.