The Nexus of Agricultural Credit and Agricultural Gross Domestic Product (GDP) in Terms of European Union Rural Area Typology in Turkey

Abstract

In this research, the relationship between agricultural GDP and agricultural credits provided between the years 2004-2017 in Turkey was analyzed by panel data analysis. Panel Unit Root Test, Panel Cointegration Test and Panel Granger Causality Analysis were used as the analysis method. The study was evaluated in three regions according to EU Rural Area Classification in Turkey. These regions are defined as urban area, intermediate and dominant rural areas. According to the findings, long-term cointegration was observed among the variables in all three regions. According to the causality analysis results, while the two-way causality was observed between the variables in urban and intermediate rural areas, no causal relationship was observed in the dominant rural area. Considering the six provinces (Artvin, Bayburt, Bingöl, Çankırı, Gümüşhane, Tunceli) that make up the dominant rural region, it is known that it consists of a low income level, a relatively smaller average land size and a subsistence structure. Therefore, the lack of a relationship between agricultural credit and agricultural GDP can be considered as an expected result in the region where agricultural production is not intense for investment and economic value acquisition. In this framework, it is necessary to revise the agricultural credits and their utilization opportunities according to the local/regional dynamics and to construct the opportunities to be used in production processes by spreading to a wider base.