Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

Abstract

This study aims to analyze the drivers behind price changes in agricultural products in Türkiye from 2002 to 2021, considering the impacts of three crises of different causes which are the global food crisis, the Russia–Türkiye aircraft crisis, and the COVID-19 pandemic. The potential factors are categorized into four subgroups: governmental effects, agricultural inputs, macroeconomic indicators, and climatic conditions. The selected agricultural goods for price change measurement include wheat and maize representing subsistence goods, and olive oil and cotton as marketing goods. The autoregressive distributed lag (ARDL) model is applied to observe both the short- and long-term impacts of the variables on price developments. The results suggest that government effectiveness, regulatory quality, nitrogen use, water price, money supply, exchange rate, and GDP under the related categories are the most effective factors in price changes. Among the variables under the category of climatic conditions, significant values are obtained only in the analysis of the temperature impact on olive oil. The analysis also reveals the variable impact of crises on the prices of the chosen products, depending on the goods involved. The maize and wheat analyses yield particularly noteworthy results. In the long run, nitrogen use demonstrates a substantial positive impact, registering at 29% for wheat and 19.47% for maize, respectively. Conversely, GDP exhibits a significant negative impact, with 26.15% and 20.08%. Short-term observations reveal that a unit increase in the governmental effect leads to a reduction in inflation for these products by 17.01% and 21.42%. However, changes in regulatory quality result in an increase in inflation by 25.45% and 20.77% for these products, respectively.