The effects of agricultural liberalization on sectoral water use: A CGE Model for Turkey

The aim of this study is to construct a water-CGE model for Turkey in order to examine the effects of a reduction in agricultural tariff rates on Turkey’s international trade and on agricultural water use. With agricultural trade liberalization Turkey becomes a net importer of the agricultural products. The agricultural production declines resulting in a reduction in the agricultural water use. The same simulation is considered with an increase in agricultural productivity. The trade distortions resulted from tariff reductions are compensated. Water use in fruit sector increases while in other agricultural sectors it declines although the production and net exports in all agricultural sectors increase.Publisher's Versio

Su kaynakları yönetiminin ekonomik analizi : Türkiye için bir hesaplanabilir genel denge modellemesi

Water-related issues are gaining importance at both national and global level. Water resources are becoming insufficient in meeting the rising needs. As resources are distributed unevenly throughout the world, supply and demand correspondence is difficult to meet. The analysis of water related issues should be addressed within a comprehensive framework. CGE models offer this possibility. This study aims to construct a CGE model for Turkey which includes water as a factor of production. It relates water issues with another troublesome debate that is important for Turkey: trade liberalization in agriculture. Turkey as a member of WTO and a candidate country for the EU has to consider the effects of a further liberalization in agriculture on its economy. In this study a trade liberalization scenario and a water-policy scenario have been discussed. Additional simulations are conducted in the case of a productivity increase in agriculture. Results show that, trade liberalization in agriculture leads to an increase in GDP and income levels, but had a negative impact on the trade balance in agricultural products. Applying a “selective water tax” will result in a decrease in production and consumption in water-intensive sectors, as well as in the private income. For the first simulation, productivity increase in agriculture leads to a further increase in both GDP level and incomes, and it compensates the trade distortions resulting from the tariff reduction. In water simulation, private income increases with productivity increase and depletion in production and consumption of agricultural products reversed. Moreover, the net exports in agriculture improve significantly.Ph.D. - Doctoral Progra