Regression Results for Price Dynamics and Policy Models of Hazelnut Producer Prices

Abstract

Türkiye is the world’s leading hazelnut producer, and the crop holds strategic socio-economic importance, particularly for the Black Sea Region. However, this traditional dominance is increasingly being challenged by emerging competitors such as Chile, Georgia, and Azerbaijan, which benefit from modern agricultural practices and lower production costs. This study investigates the dynamics of the Turkish hazelnut market, identifies the key determinants of real producer prices, and proposes policy recommendations for sustainable growth. Using annual data from 2005 to 2023, we conduct an econometric analysis with a Multiple Linear Regression (OLS) model employing heteroskedasticity-robust standard errors for reliability. The model examines the impact of three key variables on inflation-adjusted producer prices: the international U.S. dollar price of hazelnuts, Türkiye’s export volume, and the support purchase price set by the Turkish Grain Board (TMO). The results show that the Turkish hazelnut market is highly integrated into global markets. The international price is the most significant determinant of domestic real prices (elasticity: 0.485), followed by export volume (0.323) and the TMO support price (0.198). In addition, real producer incomes have remained stagnant over the past two decades, and a considerable gap persists between producer and consumer prices. The study concludes that short-term price interventions are insufficient for maintaining competitiveness. Instead, a strategic shift is needed, prioritizing structural reforms such as orchard rejuvenation, strengthening market institutions, and fostering value-added production and branding initiatives to enhance producer welfare and ensure the sector’s long-term sustainability.