The unification of the exchange rate in practice is the non-allocation of foreign exchange to the sectors whose import was done with the foreign exchange quotas cheaper than the free market ones. Imports of agricultural products are usually a priority for this quota; and with the elimination of quotas, the balanced exchange rate increases in the country. In this study, by designing a computable general equilibrium (CGE) model and using the social accounting matrix in 2011, the effect of a 30 percent increase in the exchange rate on the value added of agricultural sub-sectors was investigated. The equalization of the exchange rate, in practice, is the non-allocation of currency to priority sectors such as agriculture, whose imports are made with a cheaper quota than the free market; and removing such quotas will increase the exchange rate in the country. In this study, by designing a computable General Equilibrium (CGE) model and using the social accounting matrix of 2011, the effect of a 30 percent increase in the exchange rate on the value added of agricultural sub-sectors was investigated with two simulation scenarios. The first scenario was based on an increase in the exchange rate in competitive conditions without restrictions on supply and foreign trade, and the results of this scenario indicated an increase in the general index of prices and nominal GDP; in addition, without restrictions on production and supply, an increase in the exchange rate would lead to an increase in the combined price of production factors, value added and exports of agricultural sub-sectors while resulting in an increase in demand for agricultural production factors. The study results of the second scenario based on increasing the exchange rate and simultaneously controlling agricultural and export prices indicated a decrease in the value added of agricultural activities. Considering the increase in the price of agricultural inputs following the increase in the exchange rate, in order to prepare and regulate the market as well as reduce the producer's risk, it is suggested maintain a suitable reserve of imported inputs, especially animal feed, fertilizers, pesticides, and drugs in the country; in addition, considering the difference in production risk and income of various agricultural activities and products in relation to exchange rate changes, it is necessary in the first place to rank agricultural products by examining their impacts on the exchange rate changes, based on the degree of necessity and the degree of impact of each product and then, to explain and formulate the supportive policies for these products. |
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