Prioritization the Factors Affecting the Success of a Commodity in Agricultural Ring of Iran Mercantile Exchange

اقتصاد و توسعه کشاورزی

Article 2, Volume 31, Issue 1 - Serial Number 35, March 2017, Pages 27-35   

Document Type: Research Article

DOI: 10.22067/jead2.v31i1.56950

Authors

S. Ahangari¹; S.M. Mojaverian¹; S.A. Hosseini Yekani^{* 2}

¹University of Agricultural Science and Natural Resources, Sari

²University of Agricultural Science and Natural Resources, Sari.

Abstract

Introduction: The market of agricultural products has always faced with a lot of limits and structural problems in Iran. The most part of these problems are related to non development of agricultural economy of our country and also traditional and inefficient structure of the market of agricultural products. According to non-transparency of market information, its traditional structure, as well as the risk of agricultural activity, it was expected that agricultural ring of Iran Mercantile Exchange (IME) is effective in order to prevent the above mentioned obstacles; however from 2007 up to now, less than 1 percent of agricultural products arrived to this market and IME couldn’t have a leading role in the market of agricultural products. Although previous studies have examined some of the obstacles of IME development, but few researches have investigated choose of suitable products for trading across this market. In this study, it is tried to study the performance of agriculture ring of IME with focus on commodity selection criteria of such markets.
Materials and methods: In this study, two approaches of conventional taxonomy and weighted taxonomy are used in order to achieving the goals. In conventional taxonomy, component coefficients are constant and equal to one. But at the same weight taxonomy approach, data were weighted by Shannon entropy method. The required data of this study have been gathered from official websites of Statistical Center of Iran, Iranian National Standards Organization, Ministry of agriculture Jihad and Iran Mercantile Exchange. It is worth noting because of lack of access to updated data; the data of 2013 was used in this research.
Results and Discussion: Because of lack of data, 10 out of the 19 accepted commodities of IME were analyzed. The most obvious difference between the two methods of conventional and weighted taxonomy in this study is removal of pistachios in the conventional taxonomy. After obtaining the distance matrix, it was observed that pistachios have passed upper bounds and therefore, this product has been removed for the rest of the calculations. In the weighted taxonomy through Shannon entropy, none of the goods is removed. Finally, rice and maize identified as two top products on the list of most suitable commodities for trading at IME. Wheat and tea are also got the ranks of third and fourth respectively in conventional and weighted taxonomy approaches. According to the Iranian people's taste, good choice of rice as the first rank in this study was not surprising and is in line with reality. This product has an important role in satisfying the protein and calories of the world people. So, the more rice trades at IME, the more agricultural ring is successful. Corn, wheat and tea have also comparative importance across the studied agricultural commodities and expanding their trades at IME would have a major contribution in the success of agricultural ring.
Conclusions: As mentioned, rice has upper priority across the other studied commodities for trading at IME. After rice, corn, wheat and tea ranked second, third and fourth more suitable commodities. According to the results of this study, it is suggested that, factors such as the coefficient of importance and continuity in supply should consider as importance factors of commodity selection. According to the ranks of selected commodities, direct support of government could have an important role in the success of commodity in trading at IME. In order to successful entrance of agricultural commodities to IME, further support from the government is required. It is also proposed that free regional public educations are planned for small and large farmers to understand the agricultural ring of IME and its common standards and trading strategies. A package of incentive policies such as purchase guarantees in the absence of successful trading at IME and partial waivers on transporting costs to the warehouses is also proposed. Next to the contrary, it is also required to have some punishment policies so that in the absence of trading at IME for some farmers, financial supports such as loans or guaranteed purchase of those farmers would be far out of reach. Also decreasing the distance between IME and farmers through expanding the number of accepted warehouses in production areas by IME could ease the entrance of farmers to this market.

Keywords

Commodity selection; Shannon entropy; Numerical Taxonomy; Agricultural ring; Iran Mercantile Exchange

References

1- Advarbashi N. 2011. Agricultural commodity market is not spinning rims well, Livestock, agro-industry. pp.79-81.

2- Agricultural statistics. 2013. The first volume crops. Ministry of agriculture, Department of planning and economy, center for information and communication technology.

3- Agricultural statistics. 2013. Volume II. ministry of agriculture, department of planning and economy, center for information and communication technology.

4- Agricultural statistics. 2013. Volume III. horticultural crops. Ministry of agriculture, department of planning and economy, center for information and communication technology.

5- Ahmdi Kliji S. and Amjadi A. 2015. Agricultural commodity exchange in support of the agricultural sector.

6- Ali Pour H. and Ali Panah S. 2007. Expanding agricultural commodity exchange impact on economic development. agricultural economics and development, 5( 35-36): 13-32.

7- Anonymous. 2011. Report challenges and bottlenecks of agricultural stock boom. parliament research center.

8- Anonymous. 2013. Learn how's trading agricultural products. Iran mercantile exchange.

9- Aregay H., Nizigiyimana M., Gahungu J. Nyawenda L. and Matipa R. 2005. Study of the potential for commodity exchanges and other forms of market places in eastern and southern africa. 2nd extraordinary session of the conference of ministers of trade, 21 - 24 november, arusha, united republic of tanzania.

10- Azizi J. 2006. Economic evaluation of marketing strategies of rice in guilan province. journal of agricultural sciences 4: 729-715.

11- Bakhshi A. 2015. Check feed barley price fluctuations in the Iran Mercantile Exchange by using pattern of Arima and GARCH and harmonics. Master's thesis, University of agricultural sciences and natural resources in sari.

12- Bidabadi B. 1983. Numerical taxonomy analysis. Plan and Budget Organization, Arak.

13- Brewer P. 2001. International market selection: developing a model from Australian case studies. International business review 10: pp. 155-174.

14- Chizari A. 2003. The introduction of agriculture in the Iran Mercantile Exchange. Agriculture and Development 11 (41-42): 12-42.

15- Dragomirescu L. and Postelnicu T. 1994. Specific numerical taxonomy methods in biological classification. Proceedings of the 17th course of international school of mathematics, World Scientific, London, pp 31-45.

16- Emad Zade, M. and Daliri Chulabi, H. 2007. The comparative advantage and estimate rice production in Iran. Quarterly journal economic review 4 (3): 44-23.

17- Gheisari, A. Azerbaijani. and A. Ahmadi.F. (2008). Culture poultry sciences. The Arkan danesh press.

18- Golriz H. 1995. Stock Exchange (attention to the Tehran Stock Exchange) printing, Amir Kabir Publications 8 (12):17-32.

19- Hosseini S. S., Kavoosi M. and Dorijani A. 2008. Comparative advantage and prioritize Iranian caviar export target market. Journal of Agricultural Sciences and Natural Resources 8-11.

20- Jabalameli M. 2010. The importance of agriculture in business development and market launch Mercantile Exchange Isfahan Province, secretary and head of the think tank set up markets for agricultural products.

21- Jayn TS., Sturgess C., Kopicki R. and Stiko N. 2014. Agriculture commodity exchange and the development of grain market and trade in africa: a review or recent experience 1-20.

22- Kabiri A. and Barzandeh M. 2003. The new approach in reforming the agricultural sector of the market. Economics and Development 5-24.

23- Khaksar Astaneh H., Yaghoubi M. and Kalateharabi V. 2014. Determining revealed comparative advantage and target markets for Iran's stone fruits. Journal of Agricultural Sciemce and Technology 16:253-264.

24- Kline P. 1994. An easy guide to factor analysis. London and New York.

25- Kourmanova A. and Dissenova M. 2008. A Study on Mechanisms and Potential for Agricultural Commodities Trade in Central Asia. Asian Development Bank, Almaty, Kazakhstan.

26- Mohammadi A. 2010. Application of topsis methods of linear assignment and the taxonomy of the financial evaluation. A study of economic, pp. 302-273.

27- Mojaverian M., Ahmadi S. and Aminrvan M. 2014. Prioritizing target markets of agricultural products for export.

28- Rashid, Sh. Winter-Neson, A. and Garcia, Ph. 2010. Purpose and potential for commodity exchange in African economies.

29- Ray P. 1967. Agricultural insurance, principles and organization and application to developing countries, FAO Rome 12-13.

30- Sabbagh Kermani M. and Azizi F. 2003. Analysis of the effects on the economy and the agricultural sector's commodity exchange. Agricultural and Development Economics, 11 (41-42):91-115.

31- Sarookhani B., Tavakoli Vala Zh. and Rostamzadeh A. 2012. Numerical taxonomy and its application in social research. Historical sociology 4(1): 171-194.

32- Shafi'i M., Ahmadi M. and Khodaparsti S. 2011. Rating bank hybrid model using dea and shannon entropy. Data envelopment analysis's third national conference, islamic azad university of firozkoh.

33- Shahnoushi N. and Dehghanian S. 2005. Investigate ways to improve the position of agricultural mercantile exchange. Agricultural and development economics 7 (38):33-62.

34- Shirazi, N. 2013. Investigate the causes of the failure of agricultural tires in the Iran Mercantile Exchange. Master's thesis, University of Samangan Amol nonprofit.

35- Sinai S. 2006. Economic Assessment of Agricultural Commodity Exchange's performance. Tarbiat Modarres University, College of Agriculture.

36- Soltani Gh. Zibaee M. and Kahkha A. 2008. The use of mathematical programming in agriculture. Agricultural Extension and Education Research Organization, 12-14.

37- Valibeigi H. 2002. The benefits of the commodity exchange's formation in Iran. Economic journal: Economic affairs department of internal magazine, 7 (2): 4-7.

38- www.amar.org.ir

39- www.ime.co.ir