The Granger-causality relationship between energy productivity and added-value of Iran’s agricultural sector

Abstract

Abstract:-Oil products and electricity are the main sources of energy for the agricultural sector of Iran. In the period 1989-2012, the use of this energy carrier has increased at an average rate of 35.6%, whereas the average annual growth rate of the value-added of the agricultural sector has been 3.31% over the same period and the productivity trend of energy carriers has always been on a fall so that their average annual growth rate in the agricultural sector of Iran has been -14.33%. The present study aimed to explore the effectiveness of energy productivity on the added-value of the agricultural sector. The results showed that the two variables had no causal relationship. It can thus be said that other factors are influential on the added-value of the agricultural sector and that for the productivity of energy carriers to be influential on the agricultural sector, it is necessary to examine a combination of pricing and non-pricing policies.Keywords: energy carriers, added-value, agricultural sector, Granger causality