ESTIMATION OF THE FACTORS AFEECTING ALLOTMENTS OF INVESTMENT OF MODERN IRRIGATION METHODS IN IRAQ

Abstract

Technology progress is considered one of the basic pillars for the acceleration of social and economic growth in different countries. Advanced technology is a common cause of many economic development activities including the agricultural development. In studying the irrigation technology during the studied period, we noticed that the number of modern irrigation sets in Iraq was (12769) units, and Basra province was the first with a total of (3407) sets. Average annual growth of investment allotment for the period 1993 – 2002, which represent half of the studied period, was (-3.49) percent, and below zero, as well, for the period 2002 – 2012. Gross domestic product (GDP) for both periods of udy were (10.81) for the first period and (14.24) for the second period. Annual average growth of the plant production for the period 1993-2002 had a positive sign and reached the maximum of (9.33), while it was (-11.12) for the second period of the study. Other data proved that the highest percentage of contribution of the plant production to the agricultural production in general was in 2001 with an average of (80.7%), while the lowest percentage was (47.5%). In order to recognize the main factors affecting the investment allotments for the new irrigation technology, investment function was estimated which expresses the relationship between investment allotments, as a dependent variable and each of the GDP and plant production, in fixed prices, as independent variables. By using the ordinary least square method (OLS), a linear form is found to be the best form to express this relationship due to its success in statistical, economical and standard tests. The GDP was the most effective factor in investment allotment. It is been found that one unit change will produce a change of about 139.8, considering other factors as constants. The independent variables were able to explain 71% of the changes in the dependent variable, and F test expressed the significance of the model. The research concluded that the decrease in investment allotment on irrigation technology during the studied period lead to weak agricultural investment in general. The increase in the GDP did not play its role to increase the total investment in this kind of investment. The study recommend to eliminate the restrictions on agricultural investment and release sufficient finance for such agricultural investment.