The Impact of Agricultural Commodity Price Increases on Agricultural Employment in Turkey

Abstract

Agricultural commodity prices experienced higher increases beginning in the second half of the 2000s. The rises were fueled by numerous factors, high energy prices, weak dollar, investment fund activity, the combination of adverse weather conditions, the diversion of some food commodities to the production of biofuels, and government policies such as, including export bans and prohibitive taxes brought global stocks of many food commodities down to low levels. Extreme price spike and volatility in agricultural commodity prices creates negative effects on macroeconomic instability, posing a threat to food security in many countries. In Turkey, agricultural employment rate, which has been decreasing since the mid-90s, unexpectedly rose between 2006-2009, and it is continuing to increase. In this context this paper analyzes that is there any relation between agricultural employment, and international agricultural commodity price increases in Turkey by using VAR method. Results show that there is a relationship between agricultural commodity prices and agricultural employment. Also we have empirical evidence about the relation between agricultural and non-agricultural employment. It is indicated that agricultural employment effects on non- agricultural employment but the opposite effect is not valid.