Agricultural Loan and Agricultural Production Value in Turkey

Abstract

One of the major tools in agricultural finance is agricultural loans. Therefore, it is important to investigate the relationship between agricultural loans and agricultural production. In this study we aim to determine whether there is a causality relationship between the agricultural loan and agricultural production value. For this purpose we use the time series data for the years of 2005- 2018. In the study, we use Phillips-Perron unit root test to determine the stationarity levels of the variables examined. After we examine the stationary levels of time series, we perform Granger causality test to detect the causality relationship between agricultural loans and agricultural production. As a result of the Granger causality test, we determine that there is a unilateral causality relationship from the agricultural loan variable to the agricultural production value variable, that is, it can be said that agricultural loans affect the value of agricultural production. For this reason, we can state that facilitating the use of loans in the agricultural sector, and increasing the lending institutions will contribute to the increase of agricultural production value in meeting the input needs of the producers effectively.