Econometric Analysis of The Wheat Costs Functions for Farms in the Northern Region in Iraq

Abstract

The wheat crop is one of the most important cereal crops that occupies a distinct economic position and has an essential value in building human life. It is characterized as the first strategic crop, whether at the global or local level. The production of wheat in Iraq is described at its high costs despite the great support by the Iraqi government for the prices of production requirements, and this is due to the failure to achieve production volumes and suitable areas close to the optimal volumes, with the lowest production costs and the greatest possible profit. The research aimed to study the reality of wheat production costs by estimating cost functions in the short and long terms using random sampling methods for cross-sectional field data for the agricultural season (2020-2021), and then determining the optimal size of production and farm for a sample of wheat farmers in the two governorates. Kirkuk and Salah Aldin in northern Iraq. The number of observations of the sample reached (145) farmers distributed over the governorates, amounting to (72, 73) farmers in Kirkuk and Salah Aldin, respectively. The results showed that the statistical estimates to determine the optimal volume of production in the short term for wheat farms (10-20), (21-35) and (36-50) donums in the northern governorates of Iraq, according to the functional cubic formula, amounted to (10.3, 26.13, 40.37). tons, respectively, and that the optimal size of the farm in the long term that can be exploited by wheat farmers in the northern governorates, which minimizes costs and maximizes profit, is (116) donums. Based on the results, the study recommended the necessity to support farmers by subsidizing the prices of production requirements, especially seeds, as well as chemical fertilizers of both types, urea and compound, and providing them before the start of the planting date, which contributes significantly to reducing production costs and raising the productivity of wheat area.