The Growth of Agricultural Sector and Marginal Propensity to Trade

Economic growth and its relationship with international trade is one of the key issues in choosing trade policies. The main objective of this study is to examine the relationship between the growth of agricultural sector and trade development for selected agricultural products. The production and consumption effects of economic growth on trade was estimated by calculating the values of both marginal and average propensity to trade. It is expected that the production and consumption impact of growth on trade would be protrade, antitrade, neutral, ultra protrade and ultra-antitrade. According to the value of marginal propensity it seems, the government trade policies are unstable. The results indicate that during the first economic development program the government aim was to increase the export of Pistachio and Dates and control the import of Rice and Sugar via supporting the domestic production. In the second and third economic development programs, the production and consumption effects of agricultural growth was to decrease the trade level of all products except sugar in the second development program and pistachio and rice in third program. During the fourth and fifth programs, the production and consumption effects of agricultural growth on trade of all study products were repespectively protrad and antitrade except dates.