Recent Trends in Agriculture

The agricultural population of Iran has been a major beneficiary under the Islamic Republic. First, the government has placed special emphasis on agricultural development, and its pro-rural policies are reflected in the provision of extensive price supports and input subsidies, as well as the rural electrification and road construction. Secondly, the decline in the oil sector has inevitably resulted in a depreciation of the real exchange rate, of which the agricultural economy has been the main beneficiary. The agricultural sector has grown by 4-5 percent per year during 1981/82-92/93. Since the GDP and non-oil GDP have been stagnant, the share of agriculture in the GDP has grown from 15.2 percent in 1976 to 26.4 percent in 1992, and its share in the non-oil GDP has grown from 26.4 percent to 33.6 percent. Meanwhile, agricultural employment has remained stable at around 3.2 million. Consequently, output per person employed in agriculture has grown by 5-6 percent per year. Increased productivity has been associated with impressive increases in mechanization and fertilizer use. While national per capita income has declined sharply, there has been a large increase in the per capita income of the agricultural population. Thus, under the Islamic Republic there has been a large redistribution of income in favor of the agricultural population. One would expect that this redistribution has resulted in a more egalitarian overall income distribution.

Apart from minor alterations that resulted from land seizures by peasants, the land tenure system under the Islamic Republic was governed by the 1962-71 land reform program. Squatters eventually received ownership of land seized after the revolution, and the original owners remain to be compensated.

With population growth of 3.4 percent per year, and rising per capita food intake (a result of income redistribution), food consumption has increased by 6 percent per year and has resulted in rising food imports. However, food imports constitute 10-20 percent of total imports and are not a heavy drain on the balance of payments.

* Abstract prepared by the author

Mohmmad Gholi Majd
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