AN ECONOMIC ANALYSIS OF THE ROLE OF AGRICULTURAL FOREIGN TRADE AND EXCHANG RATES IN THE GROWTH OF AGRICULTURAL OUTPUT IN IRAQ (1990-2020)

Abstract

The study aimed to determine the influence of agricultural imports and exports on the domestic agricultural sector in Iraq. It employed the ARDL model to examine the effect of foreign trade on agricultural production using annual time series data from 1990 to 2020. The data was initially subjected to ADF tests to determine the order of integration, with test results indicating that an ARDL model in the first difference is appropriate for further econometric analysis. The findings indicate the existence of a long-term relationship equilibrium between agricultural and domestic products and the studied variables. There was a negative relationship between agricultural imports and output in each of the periods. Over both short and long terms, a 1% increase in imports reduces agricultural output by 0.1539 and 0.478%, respectively. This finding is compatible with economic theory, as imports are regarded as one of the sources of leakage that tend to reduce domestic output. Agricultural exports positively and significantly impacted agricultural domestic products, but this were limited due to the small export volume. Exchange rates had different effects over the short and long runs, turning negative and positive, respectively. This study suggests the importance of adopting monetary policies that are more stable and compatible with the reality of agricultural production in protecting and supporting both producers and exporters.

Keywords

• agricultural exports
• agricultural imports
• exchange rates
• self-regression