Virtual water trade: An empirical application, for Turkey, on agricultural products

Water is one of the most important natural resources, likely to be scarce in a global extent. Studies made indicate that Turkey encounter an intense water problem in the future. For this reason, it is very important to save water and ensure water safety in Turkey as well as in a global extent. In this case, virtual water is considered as an alternative water source and virtual water trade is becoming important. Based on this importance of the issue, in addition, due to the fact that the highest water use in Turkey is in the agricultural sector, it is essential that the virtual water trade carried out in agricultural products be examined. In this context, the aim of this thesis study is to draw attention to the water problem and to analyze the virtual water trade, carried out with agricultural products, in Turkey. In the study, the effects of Agricultural Production Index, Turkey GDP/World GDP, Real Exchange Rate, Irrigated Area, Temperature, Precipitation variables on virtual water trade balance (virtual water export amount/virtual water import amount) were revealed econometrically and statistically. In this context, the relationship between aforementioned variables and the virtual water trade balance was examined by applying the method of ARDL limit test. It was determined that only the effect of the GDP variable, among the variables in the model created in the study, on the dependent variable was not statistically significant and was excluded in the model. It was observed that a positively directed unit change in the variables of temperature and irrigated area, among the other variables, would have a positive effect on the virtual water trade balance. Furthermore, an avoidant relationship was found between the variables of precipitation, agricultural production index and real exchange rate and virtual water trade balance. Keywords: Water Problem, Political Economy of Water, Condition of Water Resources, Virtual Water Trade, Water Footprint