Effect of Government's Support Policies on Agricultural Products (Case study: East Azerbaijan Province)

Supporting agricultural products with some rates of comparative advantage is an important step for non-oil exports development of Iran. The purpose of this study is to identify the agricultural products of East Azarbaijan with comparative advantages by policy analysis matrix (PAM). The effects of exchange rates and global prices on the comparative advantage of the cases are examined. The dry farmed wheat (DFW), dry farmed barely (DFB), and irrigated barely did not show any rates of comparative advantages; while, cucumbers, and tomatoes exposed the highest rates of comparative advantages. The sensitivity analyses of comparative advantage indices with respect to the exchange rates(ER) demonstrate the positive correlation; where, DFW, and DFB had highest response rates; and the cucumbers had the lowest response for ER changes. Sensitivity analyses of comparative advantages with respect to global prices showed the deletion of comparative advantages with 25% declines in global prices of irrigated wheat, and locating the potatoes on breakeven point. Sensitivity analyses of tradable inputs costs confirmed that by increasing the ratio of incomes to tradable input costs decrease the response of domestic resource costs indices as compared with tradable input costs changes.