The Impact of Foreign Trade on Agricultural Added Value Growth (A Case Study: D-8 Group)

Agricultural value-added growth is important for alleviation of poverty, improvement of food security and growth the other sectors of an economy. To achieve rapid growth in agriculture sector, the effective factors on growth must be identified. In recent years, economists have emphasized on the impact of foreign trade on growth. This study examines the effect of international trade on agricultural growth of D8 countries. The results of this research can be used to establish common trade and agricultural policies within the group. The used data of this study for D8’s agriculture sector in the period 1983-2007 mainly obtained from the FAO and the World Bank. The results emphasize on the positive and significant impact of human and physical capital on D8’s agricultural added-value growth. Also, it is found that import significantly improves added value. Despite the expected, export has not significant impact on agricultural growth. Given the results if this study, it is recommended that agricultural import is used as a channel for transferring technology, increasing competitiveness, providing complementary goods and achieving inputs by the D8 countries. It is better to reduce dependence on import in long term.