Weather or not? The role of international sanctions and climate on food prices in Iran

Abstract

IntroductionThe scarcity of resources have affected food production, which has challenged the ability of Iran to provide adequate food for the population. Iterative and mounting sanctions on Iran by the international community have seriously eroded Iran's access to agricultural technology and resources to support a growing population. Limited moisture availability also affects Iran's agricultural production. The aim of this study was to analyze the influence of inflation, international sanctions, weather disturbances, and domestic crop production on the price of rice, wheat and lentils from 2010 to 2021 in Iran.MethodData were obtained from the statistical yearbooks of the Ministry of Agriculture in Iran, Statistical Center of Iran, and the Central Bank of Iran. We analyzed econometric measures of food prices, including CPI, food inflation, subsidy reform plan and sanctions to estimate economic relationships. After deflating the food prices through CPI and detrending the time series to resolve the non-linear issue, we used monthly Climate Hazards group Infrared Precipitation with Stations (CHIRPS) precipitation data to analyze the influence of weather disturbances on food prices.Results and discussionThe price of goods not only provides an important indicator of the balance between agricultural production and market demand, but also has strong impacts on food affordability and food security. This novel study used a combination of economic and climate factors to analyze the food prices in Iran. Our statistical modeling framework found that the monthly precipitation on domestic food prices, and ultimately food access, in the country is much less important than the international sanctions, lowering Iran's productive capability and negatively impacting its food security.