Saffron Agronomy and Technology

Saffron Agronomy and Technology

Evaluating the welfare benefits of regional trade of saffron in Iran

Document Type : Research Paper

Authors
Alireza Alipour 1
Zahra Ghodrati Shatoori 2
Ali Yousefi 1
1 Assistant Professor, Department of Rural Development, College of Agriculture, Isfahan University of Technology, Isfahan, Iran.
2 MSc, Department of Rural Development, College of Agriculture, Isfahan University of Technology, Isfahan, Iran.
10.22048/jsat.2025.482205.1546
Abstract
Saffron is considered one of the most valuable commercial products in the world. Considering the commercial value of saffron, the domestic and foreign trade in Iran has always had a significant boom and expansion. Therefore, it is very important to evaluate the welfare benefits of the domestic trade, especially in competitive conditions. Therefore, in the present study, the welfare benefits of regional saffron trade in Iran were evaluated. For this purpose, with mathematical modeling, the components of Iran's saffron market were evaluated in competitive conditions compared to the existing conditions in the base year of 2022. Based on this, at first, the parameters of saffron supply and demand functions were estimated by the provinces of the country using the maximum entropy method. Next, the components of the saffron market among different provinces were simulated in the form of a spatial equilibrium. The results showed that in competitive conditions, the average price changes and the amount of supply and demand of saffron in the country will not change significantly. Therefore, the current conditions of the saffron market are very close to perfect competition market. Nevertheless, in competitive conditions, the price of each product unit in Razavi Khorasan, South Khorasan, and North Khorasan provinces increases relatively more than in other provinces. The increase in the price of saffron in these conditions in the three provinces of Khorasan leads to a decrease of about 4 to 6 percent in the demand for this product. The decrease in demand in competitive conditions also happens in several other provinces. Finally, the results of this research showed that in the competitive conditions of saffron trade, the increase in social welfare is mainly aimed at the suppliers of Razavi Khorasan, South Khorasan, and North Khorasan provinces. At the same time, the average social benefits of the whole society, looking at the sum of welfare surpluses of suppliers and demanders, do not change significantly compared to the basic conditions. On this basis, based on the obtained results, the application of various support policies was discussed to increase the welfare benefits of the beneficiaries of the saffron market.
Keywords
Social welfare
regional trade
spatial equilibrium
maximum entropy
competitive conditions

Subjects

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