Political Tariff Protection in Iran`s agriculture sector

In this paper,firstly, tariff protection trend of Iran`s agriculture sector is analysed by statistical analysis approach during the years 1985-2005. Agriculture's tariff regime is characterized by i) high average tariff ii) extremely dispersion of tariff levels across tariff lines iii) significant amount of tariff escalation and ix) deep gap between average nominal tariffs and import-weighted average tariffs. consequently, Several analytical propositions are derived that are consistent with the observed patterns of tariff protection in developing countries: i) nominal protection rates escalate with the degree of processing ii) higher average tariff protection in agriculture sector compared to developed countries` agriculture and iii) higher non-agricultural tariff protection than agricultural tariff protection. Afterwards Tariff equation of agriculture is estimated for 156 staple products and political fitted tariff and political protection indicator are estimated for these products. This political-economy analysis allows us to identify two sets of protected products: First, Over-protected products are those which their actual tariffs are higher than their Political fitted tariffs. Tariff reduction should not be Politically costly and could be more speedy. In this case tariff reduction would improve resources allocation and income distribution(poverty reduction) within the agriculture sector. Second, Under-protected products are those which their actual tariffs are lower than their Political fitted tariffs.Most of agricultural crops are included in this group. Tariff reduction in this case is Politically costly and longer adjusted period may be necessary.