Erol H. Cakmak

Climate change and agriculture: an integrated approach to evaluate economy-wide effects for Turkey

This paper quantifies the economic effects of climate change on Turkey. We use an integrated framework that combines an economy-wide model with a crop water requirement model to analyse the probable effects of the B1 scenario of the intergovernmental panel on climate change which is comparable to representative concentration pathway 4.5 scenario. Results suggest that the economic effects of climate change will not have serious economic effects over the period up to late 2030s, but the negative effects dominate the economy in the second half of this century. This provides Turkey an excellent opportunity to increase resilience and implement appropriate adaptation policies. The impact of climate change varies across regions. Agriculture and food production will be heavily affected. Especially irrigated production will decline as water stress increases. Significant decline in agricultural production is transmitted throughout the economy and reduces national welfare. Part of agriculture’s decline is compensated by imports, thus deteriorating Turkey’s food trade balance.

Macro-Micro Feedback Links of Irrigation Water Management in Turkey

Agricultural production is heavily dependent on water availability in Turkey, where half the crop production relies on irrigation. Irrigated agriculture consumes about 75 percent of total water used, which is about 30 percent of renewable water availability. This study analyzes the likely effects of increased competition for water resources and changes in the Turkish economy. The analysis uses an economy-wide Walrasian Computable General Equilibrium model with a detailed account of the agricultural sector. The study investigated the economy-wide effects of two external shocks, namely a permanent increase in the world prices of agricultural commodities and climate change, along with the impact of the domestic reallocation of water between agricultural and non-agricultural uses. It was also recognized that because of spatial heterogeneity of the climate, the simulated scenarios have differential impact on the agricultural production and hence on the allocation of factors of production including water. The greatest effects on major macroeconomic indicators occur in the climate change simulations. As a result of the transfer of water from rural to urban areas, overall production of all crops declines. Although production on rainfed land increases, production on irrigated land declines, most notably the production of maize and fruits. The decrease in agricultural production, coupled with the domestic price increase, is further reflected in net trade. Agricultural imports increase with a greater decline in agricultural exports.

Economic Growth in the Euro-Med Area through Trade Integration: Focus on Agriculture and Food – The case of Turkey

In this study, we analyse the effects of trade liberalization, world price increase of basic staple and productivity growth in agricultural activities on Turkey by using a dynamic CGE model calibrated to 2008 data. The simulation results suggest that Turkish economy is capable of accommodating the adverse effects of trade liberalization. There are significant welfare gains if trade liberalization is accompanied by the CAP payments in the accession scenario. Trade policy turns out to be a strong instrument to stabilize the domestic prices and avoid the adverse effects of world price increase. Productivity increase in agri-food production has prominent effects on welfare and trade.

Agriculture, trade, and climate change adaptation: a global CGE analysis for Morocco and Turkey

ABSTRACT The extent to which agricultural trade liberalisation can be an adaptation strategy in the face of climate change remains to be an open discussion in the literature. We set out to answer this question in the context of Morocco and Turkey by taking into account the impact of climate change on agricultural international markets at the global level. We use the GTAP model, combined with a newly developed global database on climate change impacts on agricultural crop sectors by 2050 as captured by yield projections. Results suggest that the more trade is liberalised, the higher global welfare gains are. However, the gains are not large enough to offset the loss from climate change impacts on agricultural productivity globally. In Morocco, agricultural trade liberalisation, on average, induces additional welfare losses. The main drivers are the deterioration in the terms of trade that offsets all the potential gains from the better allocation of economic resources due to free trade. For Turkey, trade liberalisation induces net welfare gains under all scenarios. The larger the tariff elimination scheme, the larger the net gains due to the more efficient allocation of economic resources, which partially offset the impact of declining terms of trade.