The effect of water price increase on the comparative advantage of sugar beet production in Golestan province

Document Type : Scientific - Research

Authors

Department of Agricultural Economics, Gorgan University of Agricultural Sciences and Natural Resources, Gorgan, Iran

Abstract

Sugar beet is an output in the agricultural sector, but it is an input in the industrial sector for the production of sugar and other by-products. Increasing the area of sugar beet cultivation in Golestan province from 66 ha in 2014 to 4706 ha in 2020 shows the increasing desire of growers to cultivate it. For this purpose, understanding the comparative advantage of sugar beet production is one of the important aspects of planning for its development in this province. On the other hand, the increase in the price of water affects the comparative advantage of this product.  Therefore, the present study was conducted to determine the effect of increase in water price on the comparative advantage of sugar beet using three main indicators of comparative advantage, protection coefficients, and competitiveness in the form of policy analysis matrix (PAM) and through sensitivity analysis. Results showed that the Domestic Resources Cost (DRC) was equal to 0.67, the Social Cost-Benefit (SCB) was equal to 0.86, the Nominal Protection Coefficient of Crop (NPC) was equal to 0.43 and the Nominal Protection Coefficient of Input (NPI) was equal to 0.07. In general, the indicators of comparative advantage, protection coefficients and competitiveness showed the comparative advantage of sugar beet production in Golestan province. Also, the effect of increasing water price on the comparative advantage showed that increasing the water price up to 190,000 Rials per cubic meter does not cause the comparative disadvantage of this product, therefore, considering the current price of water (7000 Rials per cubic meter), the sugar beet production in Golestan province has a comparative advantage and leads to the optimal use of agricultural inputs, especially water. Therefore, it is suggested to develop the cultivation and increase of the production of this crop.

Keywords

Main Subjects

References

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Journal of Sugar Beet
Volume 38, Issue 2
October 2023
Pages 269-282

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