Abstract
With regard to the importance of agricultural products (in particular cereals) and government policies towards
encouraging increased production as well as motivating towards self-sufficiency, it seems necessary to discuss
such issues. This article focuses on the relation between self-sufficiency and production of basic agricultural
products (wheat, barley, rice) and the two supportive policies of the government (guaranteed price and insurance
of agricultural products) during the years 1988-2008. The stationary and cointegration tests are two ways to
confirm that there is a direct relation between self-sufficiency and production of wheat & rice with insurance and
guaranteed price. This direct relation indicates the success of the policy in attaining the intended objectives
through production motivation and risk minimization in wheat & rice production process. However, there is no
such relation confirmed for barley.
