THE STUDY OF FACTORS AFFECTING PRODUCTIVITY IN THE AGRICULTURE SECTOR OF IRAN

Production growth through the promotion of productivity is one of the main goals of countries. According to the countryʹs fifth development plan; it is predicted that 33.3 percent of annual economic growth will be provided by improving productivity. Therefore, identifying factors promoting productivity is very important. This paper examined the causal relationship among productivity in the agriculture sector and some economic variables in Iran by applying the econometric techniques. The study explains the concepts and indicators of productivity and describes its role in promoting economic growth. In this study we developed a new approach to define productivity and determine factors affecting it in agriculture sector of Iran. We divided economy to two sector; agricultural sector and non-agricultural sector covering the entire Iran’s economy. We employed agricultural economics and welfare economics’ concepts and methods such as; production possibilities frontier, mathematical planning and social welfare function and also global efficiency to specify factors affecting productivity in agricultural activities. On the other hand, we considered empirical studies about concepts and indices of productivity and finally stipulated some suitable models and estimated all models applying a time series of variables covering 1959-2007 periods; and chose two the best models with well econometric characteristics. The results indicated that productivity (value added and its growth) in agricultural sector of Iran, significantly depends on relative prices of agricultural goods, quantity and quality of resources, and technical progress on production methods specially management styles. Finally coefficients of the model were estimated, the main hypotheses were examined and solutions for improving productivity are presented.