Abstract
Wheat is the most crop have been subsidized by the government in Iraq, through subsidizing the input of the production (seed, pesticide, and machines), as well as, subsidize the output of the production through purchasing it from the producers at a high price compared to the world market price. The study aims to assess the competitive advantage of wheat production in Iraq through some of the measures derived from the policy analysis matrix. This study according to secondary data has published by Iraqi Ministry of Planning/Central Organization of Statistics and Information Technology 2018, for wheat production costs of cultivation season in Iraqi provinces 2017. The results of the study indicated that the coefficients measures show, there is a government subsidy for wheat output and that means, producers receive prices higher than international prices with the existence of this policy. While the comparative advantage indicators showed, the wheat crop in Iraq was achieved private profits due to government intervention in the inputs and outputs of production, nor competitive advantage in social prices. Where the policy reflection indexes/market distortions analysis shows, that the government policy for wheat production 2017 subsidized the producers on the consumer cost, where the local market price for wheat is higher than the price of wheat in the world market.
Highlights
1.1 BackgroundWheat is one of the most important crops, which occupies an important economic position in many countries because it contains many nutrients, especially the carbohydrates
The policy analysis matrix is defined as a mathematical framework that helps divide the commodity system into its basic components, namely, private profitability estimated at private prices, where the private prices is the price in world marked, social profitability estimated at social prices, where the social price is the price in Iraqi marked, and the difference between the two measures of profitability
This means that the price protected for wheat is greater than the world market price sold, for 163% for the total sample, which indicates that there is a government subsidy for wheat output and that means, producers receive prices higher than international prices with the existence of this policy
Summary
Wheat is one of the most important crops, which occupies an important economic position in many countries because it contains many nutrients, especially the carbohydrates. It is a strategic feature in the international economic relations, and most developing countries, including Iraq, are trying to reach self-sufficiency and thereby ensure national food security. Wheat is the first crop in Iraq in terms of government subsidy. The government provides various kinds of subsidies for wheat production and markets, such as subsidies on production inputs through subsidies on seed prices, pesticides, land, pumps and agricultural machinery, and low-interest loans. Despite all government subsidies for the wheat crop, crop production cost is high and provides only a small profit margin and is a disincentive to domestic production of wheat
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