The Relationship Between Agricultural Commodity Exchanges and Agricultural Sector Growth

Commodity exchanges can provide producers with greater profits and enhance market stability by standardizing products, reducing the role of intermediaries, and providing risk management tools. In addition, by facilitating access to finance and reducing transaction costs, commodity exchanges can strengthen farmers' incentives to increase production. Despite the importance of commodity exchanges, limited studies have examined their impact specifically on agricultural production growth. Most domestic research has addressed general aspects of financial development or value addition. This study is quantitative and based on time series analysis. Data related to the growth of agricultural production (including barley, wheat, saffron, crude oil, oilseeds, and dates) during the years 2011 to 2023 were collected from the National Statistics Portal, the Ministry of Agricultural Jihad, and the website of the Iranian Commodity Exchange. Data analysis was performed using partial least squares methods, vector autoregressive model, variance analysis, vector error correction model, and structural stability tests in EViews version 11 software. The findings demonstrate the potential of commodity exchanges as a tool to reduce price risks, increase market transparency, and strengthen producer incentives. Commodity exchange sustainably strengthens agricultural production, such that about 15 percent of the changes in production growth in the long term are explained by the commodity exchange. It is suggested that policymakers develop commodity exchange infrastructure and design training programs for farmers to increase their participation. Keywords: Food security, agricultural commodity exchange, agricultural products, production growth, sustainable development.