The effects of reducing subsidies paid to the agricultural sector has been investigated in this paper. In this context, the Social Accounting Matrix of 1385 (78 × 78) was developed as an analytical model framework. Since the amount of subsidies paid by Iran to its agricultural sector, as expressed in terms of Total Aggregate Measure of Support (TAMS) is more than the levels set by the World Trade Organization, it must annually reduce the subsidies by 13,600 billion Rials in a course of ten years, if it starts WTO accession negotiations. Accordingly, in this study, the effects of the reduction of this amount from agricultural subsidies was examined. The results show that due to this shock, the GDP will decrease by more than 57 trillion Rials. Among the major effects of cutting agricultural subsidies, is the reduction of production and, consequently, the reduction of employment in the sector, so that the employment in the sector will fall to 86,000 people.