Analysis of macroeconomic effects of agricultural incentives in Turkey

Agriculture is one of the cornerstones of the economy and plays an important role in a country's development. Therefore, the sustainability and productivity of the agricultural sector can affect overall economic health. Agriculture is a sector that plays an important role in economies as it contributes to food supply, employment and trade balance, contributes to economic growth, provides raw materials for industry, impacts rural development, and preserves biodiversity. Since the agricultural sector faces a number of economic, social and structural challenges such as low elasticity of supply and demand, there is a need for government support. In this study, the importance of agricultural subsidies for the Turkish economy is tested with Fourier-based econometric analysis methods. In order to measure the effects of agricultural support policies implemented in Turkey on the main macro-economic indicators of the Turkish economy with advanced macro-econometric methods, OECD data between 1986 and 2021 are used. Economic growth, unemployment, inflation and current account balance are included in the model as macroeconomic variables, while total agricultural support and agricultural support to producers are modeled separately as agricultural support indicators. As a result of the study, both total agricultural supports and producer supports support economic growth. However, it is found that the effect of both supports on economic growth is quite weak. Keywords: agricultural incentives, growth, fourier ARDL