Exploring Systematic Yield Risk and Its Strengthening Factors for Apple Product in Iran: Application of Spatial Autoregressive Models

مجله اقتصاد و توسعه کشاورزی

Article 3, Volume 27, Issue 4, January 2014, Pages 288-299   

Document Type: Research Article

DOI: 10.22067/jead2.v1391i5.23070

Authors

H. Salami^* ; M. Nemati

Department of Agricultural Economics, Faculty of Economic and Agricultural Development, University of Tehran

Abstract

The presence of yield systematic risk in agricultural sector is one of the main reasons for facing this sector with huge damages and is one of the restricting factors in developing agricultural insurance in Iran. This study explores the presence of systematic yield risk and the extent and severity of yield spatial dependence for apple production in Iran. To this end, the apple production regions were grouped into two climatic regions based on their thermal regimes. In the second step, systematic yield risk was explored using the first order spatial autoregressive (FAR) model in each of the two climatic regions.Finally, the effects of climatic variables on the yield of apple have been estimated using more general spatial autoregressive models. Results indicate that apple production regions can be classified into two mountainous and plain regions. Apple yields are correlated across space in each of the two regions. Frost in the first region and drought in the second region is accounted for the presence of systematic yield risk in apple production in Iran. Results from more general models revealed that one year lag of drought, the occurrence of frost in March, average of temperature in June and July, total annual precipitation, and variation of precipitation are important climate variables that affect apple yield in Iran.

Keywords

Systematic risk; Spatial Autoregressive Models; Apple; Climatic variables; Iran