Econometric Analysis of Turkish Grain Board Purchasing in Turkeys Wheat Market

Abstract

In this study, the relationship between Turkish Grain Board’s (TGB) wheat purchases, which are used as a government policy tool for support of producers in Turkey, wheat production, wheat price, TGB wheat purchase price and world wheat prices were investigated. Firstly, short-term effects of other variables on TGB wheat purchasing were researched by applying the granger causality test, impulse-response and variance decomposition tests with the VAR method. According to the results of the impulse response analysis obtained from the VAR model, a positive shock in wheat production amount and TMO wheat purchasing prices increases the amount of TGB’s wheat purchase, and a positive shock in wheat prices and world prices reduces the amount of TGB’s wheat purchase. When the results of the variance decomposition are examined, it is seen that amount of TGB’s wheat purchases are mainly derived from wheat production and itself. Secondly, cointegration relationship betwen TGB’s wheat purchases and other variables are analyzed with ARDL bound test approach. According to the results of the ARDL bound test, in the long run, wheat production and TGB’s wheat purchase prices have positive and significant effect on TGB’s wheat purchase amount, while wheat prices have negative and significant effect. In the long run, world prices have a negative effect on the amount of wheat purchases, but this effect is insignificant. According to the results of the error correction model, any short-term shock’s effect disappear very quickly in the long run.