THE IMPACT OF ENVIRONMENTAL POLICIES ON THE GROWTH OF IRAN'S AGRICULTURAL SECTOR (BY PROVINCE)

Abstract

This study examines the effects of environmental policies on the growth of Iran’s agricultural sector by analyzing the dynamic relationships between economic variables (inflation, labor force, and infrastructure credits), environmental variables (pesticide consumption, emissions of CO2 and SO2, and energy consumption), and physical variables (temperature and precipitation). The study's innovative aspect is its use of a dynamic approach to evaluate both short- and long-term effects and to analyze regional differences based on climatic groups, thereby providing strategies for sustainable policymaking. The research employs a quantitative approach and the ARDL econometric method. The study population comprises 31 provinces of Iran from 2007 to 2022. Data were collected from official sources, including the Statistical Center of Iran and relevant ministries. Variables were entered into the model in logarithmic form. We used unit root tests (ADF and PP) to test for stationarity, the bounds test for cointegration, and the error correction model (ECM) to analyze the speed of adjustment. The analysis was conducted using EViews software, with provinces categorized into climatic groups (hot and dry, temperate, humid, and cold). The results indicate that in the long run, inflation (-0.2567), pesticide consumption (-0.1789), and CO2 emissions (-0.0934) have significant negative effects on agricultural value-added. In contrast, the labor force (0.3456), infrastructure credits (0.2234), and electricity consumption (0.1456) have positive effects. The ECM coefficient (-0.5789) indicates a 57.9% adjustment of any disequilibrium per period, with a return to long-run equilibrium in approximately 1.73 years. Regional analysis shows that hot and dry areas are more sensitive to changes in environmental variables. Environmental policies that reduce chemical inputs and pollutants can promote sustainable agricultural growth. However, their implementation requires gradual, region-specific approaches supported by technological investments. In the long term, such policies can balance agricultural production with environmental preservation, thereby enhancing Iran’s food security.