PRODUCTION AND SUPPORTIVE POLICES IN IRAN (CASE STUDY OF WHEAT, RICE AND BARLEY)

With regard to the importance of agricultural products (in particular cereals) and government policies towards encouraging increased production as well as motivating towards self-sufficiency, it seems necessary to discuss such issues. This article focuses on the relation between self-sufficiency and production of basic agricultural products (wheat, barley, rice) and the two supportive policies of the government (guaranteed price and insurance of agricultural products) during the years 1988-2008. The stationary and cointegration tests are two ways to confirm that there is a direct relation between self-sufficiency and production of wheat rice with insurance and guaranteed price. This direct relation indicates the success of the policy in attaining the intended objectives through production motivation and risk minimization in wheat rice production process. However, there is no such relation confirmed for barley.