Food vs. fiber: An analysis of agricultural support policy in Turkey

Abstract

The present study evaluates the effects of agricultural policies on farm land allocation. The analysis is applied to Turkey, a country where a persistent gap between rural income and urban income has motivated governments to enact policies that support farm income. This paper evaluates two sets of policy instruments: output support, which increases farm revenue from specific crops, and input support which subsidizes particular farm inputs. It also investigates the effects of agricultural policy on farmers’ incentive to produce fiber (cotton) versus food (corn and other foods). Using farm-level data from two regions of Turkey, the analysis finds that input supports have had stronger effects on land allocation than output supports. It also shows the presence of significant substitution effects across crops, with the subsidizing of cotton having a significant negative effect on the incentive to grow food crops. This provides useful insights into the economic tradeoff between food and fiber in the design of agricultural policy, and its effects on a country’s food security.