Comparative Advantage and Market Distortions: A Policy Analysis Matrix for Iraqi Wheat Crop Production

Wheat is the most crop have been subsidized by the government in Iraq, through subsidizing the input of the production (seed, pesticide, and machines), as well as, subsidize the output of the production through purchasing it from the producers at a high price compared to the world market price. The study aims to assess the competitive advantage of wheat production in Iraq through some of the measures derived from the policy analysis matrix. This study according to secondary data has published by Iraqi Ministry of Planning/Central Organization of Statistics and Information Technology 2018, for wheat production costs of cultivation season in Iraqi provinces 2017. The results of the study indicated that the coefficients measures show, there is a government subsidy for wheat output and that means, producers receive prices higher than international prices with the existence of this policy. While the comparative advantage indicators showed, the wheat crop in Iraq was achieved private profits due to government intervention in the inputs and outputs of production, nor competitive advantage in social prices. Where the policy reflection indexes/market distortions analysis shows, that the government policy for wheat production 2017 subsidized the producers on the consumer cost, where the local market price for wheat is higher than the price of wheat in the world market.