An Examination of the Relationship Between Agricultural Value Added and Agricultural Supports with Panel Simultaneous Equation Systems

Abstract

Agricultural support is a crucial way to overcome the difficulties of long agricultural production process, lack of capital and low productivity. Moreover, the fact that increasing the supply is not possible in a short while makes agricultural support more important. Different agricultural structures of countries imply different agricultural support values. This paper examines the simultaneous relations between agricultural support and agricultural value added in the six developing countries with the highest agricultural production value. Simultaneous equation systems are estimated by Two-Stage Least Squares method using annual data for the 2002-2018 period. The findings suggest that there is a simultaneous positive and statistically significant relationship between agricultural value added and agricultural supports.