Özet:

The agricultural sector constitutes an economic activity that still maintains its importance for many economies, not only cultivating the land, but also animal husbandry, forestry, and fishing. The agricultural sector is not only an important economic area but also an important employment area, especially in most of the developing countries. With the modernization and development of the agricultural sector, basic economic variables such as rural development, economic growth, etc. are also positively affected. The purpose of the study is to investigate the causal relationship between agricultural incentive payments from the central government budget and agricultural production levels through using the quarterly data for the period of 2006Q1-2019Q4 in Turkey. The causal relationship is determined through Hacker and Hatemi-J Bootstrap Causality Test (2006) and Hatemi-J (2012) Asymmetric Causality Test. The results of cointegration analysis that is carried out before causality analysis indicate that there is a long-term relationship between the agricultural incentive payments and the level of agricultural production in Turkey. According to the results of Hacker and Hatemi-J Bootstrap Causality Test (2006), one-way causality is determined from agricultural incentive payments to the level of agricultural production. On the other hand, Hatemi-J (2012) Asymmetric Causality Test results show that there is a causal relationship between positive and negative shocks in agricultural incentive payments and negative shocks at the level of agricultural production. As the results indicate, it could be asserted that agricultural incentive payments have a long-term effect on the level of agricultural production in Turkey. Especially, the fact that positive and negative shocks in agricultural incentive payments are in a causal relationship with negative shocks in the level of agricultural production reveals the necessity of policy making by determining the reasons for the decrease in this sector.

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