Study on Trade Restrictiveness of Agricultural Policies in Iran

In this paper the trade restrictiveness of agricultural policies in Iran was measured by the TRIindex for the nine major agricultural products including wheat, rice, barely, maize, soybean,meat (beef meat), soybean oil, sugar and banana over the period 1981 to 2007. The main resultsindicate that there is no trend in above index and high volatility especially in 2006 and 2007years due to considerable increases in tariff of sugar, rice, meat and oil. Based on calculated advaloremequivalents (AVEs) of non-tariff barriers (NTBs), these barriers have a significantcontribution to the level of trade restrictiveness measured by the TRI index. Thus, neglectingthe restrictiveness of NTBs identify can be very misleading. Moreover, two sets of protectedproducts: First, Over-protected products (rice, oil, sugar and banana) which their actual tariffsare higher than their optimum ones. Second, Under-protected products (wheat, barely, maize,soybean and beef meat) which their actual tariffs are lower than their optimum ones. Due tothis, we found that most products are heavily protected and trade policies in agriculture sectorhave the prohibitive role on welfare and import. This can lead to the decrease in domesticwelfare level as well as country’s trade volume with trading partners. Thus, it is necessary toadjust Iran’s agricultural trade tariff regime in order to bridge the gap between the currentstructure of protection and optimum import duties.