The effects of market factors and government policies on maize marketing in Iran

Maize plays a unique role in the agricultural economic of world. It is a key stable crop which is used in a wide range of food industries and as a customary livestock feed in Iran. Also, it is one of the most widely traded commodities in terms of absolute import value and the ratio of its amount to the total production value. Most of the traded maize in Iran is used for feed and smaller amounts are for industrial and food uses. Agriculture policy reforms in Iran have generated higher disposable incomes and increase livestock production that worked to expand maize domestic consumption faster than domestic production. In order to investigate the effect of government agriculture policies on maize market and trade restriction in Iran during 1989 to 2006 period, in this paper the advanced simultaneously econometric model is used in order to study the acreage planted, domestic demand and production, import demand and marketing margin functions. The results showed that government policies were ineffective. Therefore price support policy was not efficient for the maize market regulation. Furthermore, since government intervention in the market did not result stabilization and regulation of the maize market in practice, so the support from private sector and less restriction on trade are suggested.