Simulating the impact of import tariff changes of meat and livestock inputs on meat supply and demand in Mashhad city, Iran

Document Type : Research Paper

Authors

1 Department of Agricultural Economics, Faculty of Agriculture, University of Kurdistan, Sanandaj, Iran

2 Department of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad, Mashhad, Iran

Abstract

Introduction: Animal products are the main source of energy and protein, and are the main part of the human diet. However, the consumption of red meat in Iran is not in good condition compared to its consumption in developed countries. One of the reasons for this issue is the sharp increase in the price of red meat in recent years, and the low income level of people in society. Among the most important reasons for the increase in the price of red meat is the high price of livestock feed, such as corn and soybean meal, and the lack of their production in the country. Given the instability of domestic production and the country's high dependence on imported livestock and poultry feed, the impossibility of self-sufficiency in red meat production, and, consequently, the inability to meet consumer demand through domestic production, the importance of international trade in red meat and livestock inputs is becoming more and more apparent. However, the import tariff rate of meat and livestock inputs has fluctuated a lot in recent decades, which has led to the fluctuation of the prices of these inputs in the market. For this reason, it is very necessary to investigate the effect of import tariffs on the price and supply and demand of meat to determine the optimal tariff to increase the welfare of producers and consumers of agricultural products.
Materials and methods: In this study, the effect of changes in the import tariff of veal and livestock inputs, including corn and soybean meal, on the price, domestic production, and demand of veal and chicken meat in Mashhad city, Iran, has been investigated using the system dynamics method and sensitivity analysis. For this purpose, first, the causal loops diagram is designed with Vensim DSS software, then by formulating the model, the stock and flow diagram is drawn and simulated. Also, the behavioral reproduction test has been used to validate the model. It should be noted that these causal loops were extracted based on the opinions of meat industry experts and previous related studies.
Results and discussion: The results of the behavioral reproduction test indicated the accuracy and validity of the designed model. The simulation results for 10 years (from March 2017 to March 2027) showed that reducing the veal import tariff from 10 to 4% reduced the retail price of veal by 1.40% and increased consumer demand for this product by 3.86%. Also, by reducing the import tariff of livestock corn as one of the inputs for the production of veal and chicken meat from 5 to 0%, the supply of veal will increase by 3.59% and the supply of chicken meat will increase by 9.02%. Also, due to the decrease in the price of these products, consumer demand for veal and chicken meat increased by 5.38 and 3.66%, respectively. Moreover, with the increase in soybean meal import tariff from 10 to 20%, the supply of chicken meat will decrease by 10.77% and the demand for it will also decrease by 6.96%. In this way, consumers replace chicken meat with veal in their consumption basket, and their demand for veal increases by 5.49%.
Conclusions: Based on the results, if the goal of the policy is to change the consumption pattern towards more consumption of red meat, it is better to consider the policy of reducing the import tariff of meat and corn. As the findings show, imposing a higher import tariff on veal does not help much to increase domestic production. At the same time, reducing the import tariff of veal and increasing its import significantly increases the consumer demand for this product and brings the per capita consumption of red meat closer to its standard level in the country. Also, the results showed that reducing the corn import tariff to zero can significantly increase the demand for veal and, at the same time, help reduce the price of chicken meat. Finally, it seems that imposing a 20% import tariff for soybean meal is appropriate. Although this tariff increases the price of chicken meat (22.27%) and decreases its demand (6.96%), it is economically justified considering that it increases the demand for red meat consumption.

Keywords

Main Subjects

References

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Animal Production Research
Volume 14, Issue 2
June 2025
Pages 75-92

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