An Investigation of Comparative Advantage of Pistachio Production and Exports in Iran

Pistachio is a major agricultural export commodity in Iran. Nowadays, it ranks first among Iran’s agricultural exports. This paper focuses on the comparative advantage in pistachio production and the export market in Iran. A policy analysis matrix (PAM) framework and revealed comparative advantage (RCA) index are applied to 2000-2004 data to study Iranian government policy regarding pistachio production and export. In addition, the producer protection indices in the framework of the aforementioned matrix was calculated in order to study input and output protection policy. Results showed that Iran has a comparative advantage both in the production and export of this commodity, but the comparative advantage in pistachio production is diminishing. The RCA index showed that the comparative advantage of pistachio exports from Iran has progressed. Indices showed a high net social profitability and government protection of pistachio producers in terms of input subsidies. Then, the effects of the changing world price, exchange rate, cost of domestic factors, and cost of tradable inputs on the comparative advantage and protection indices showed that, for retaining comparative advantage in pistachio production, productivity and production costs must be both increased and decreased, respectively. In order to increase the productivity of pistachio, farmers should use scientific on-farm management and should employ modern production methods, and the government should develop research and development institutes