Abdolkarim Hosseinpoor

Nowadays one of the challenges of the agricultural sector is the method of financing and liquidity requirements for fixed investment and working capital in this sector. This study extends these researches in another dimension of the role of financial markets regarding the nature of its relationship with the development of modern agriculture as a leading economic sector. And this study aims to identify and determine the relationship between financial markets by financial development and value-added in agricultural sector. This study examines the effects of financial deepening and financial repression on the agricultural sector in Iran over the period 1971 to 2013 by using Johansen method. The results show that financial repression and increasing the exchange rate has a negative impact and financial depth, and the practice of financial intermediaries have a significant positive impact on the agricultural sector. It is recommended that the government and banks help to increase agricultural output through credit expansion to the private sector and reduction of funds rate in agriculture.