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Local Impact of Mining on Wheat Production Efficiency in Iran

Abdi Khaniki, Melika | 2025

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 58800 (44)
  4. University: Sharif University of Technology
  5. Department: Management and Economics
  6. Advisor(s): Vesal, Mohammad
  7. Abstract:
  8. In October 2022, the Ministry of Industry, Mine, and Trade announced the auctioning of 5,000 mines within a three-month period, an announcement that triggered significant reactions among environmental activists. Opponents argued that such an intense industrial expansion exceeds the ecological capacity of Iran’s environment. This study aims to demonstrate the impact of establishing active metal mines on wheat production efficiency as an ecosystem-dependent economic activity. To this end, mining-related data were obtained from issued exploitation permits, and agricultural expenditure and wheat production data were sourced from the “Survey of Production Costs of Major Crops.” The causal identification strategy relies on a difference-in-differences approach over the period 1999–2018. The results indicate that the average yield of rainfed wheat in villages located within a 5-kilometer radius of a mine decreased by 9.95 percent. For irrigated farming, however, the results differ and no significant reduction is observed. Moreover, mining activity appears to reduce the likelihood of irrigated wheat cultivation. This may stem from increased competition for water resources between agriculture and mining, though this hypothesis requires further investigation, including an examination of water-price changes. Additionally, the probability of using wells for irrigation—compared to other water sources—increases, suggesting an adaptive response by farmers to the new conditions near mines. No significant effects are found for other agricultural inputs such as farm size or labor use
  9. Keywords:
  10. Agricultural Productivity ; Mining Industry ; Natural Resource Based Economic ; Environment ; Nonrenewable Perishable Resources ; Extraction ; Polluting Industries

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