Regional Impacts of Alternative Price Policies for Turkey's Dairy Sector

Authors: FAHRİ YAVUZ, SİBEL TAN, CARL R. ZULAUF

Abstract: Regional impacts of agricultural policies have emerged as a key concern in Turkey for both domestic reasons and because of Turkey's desire to join the European Union. This study uses a spatial equilibrium model to analyze the regional impacts of 2 alternative dairy support policies that are currently being considered: a price premium policy and a target price/deficiency payment policy. Both policies are found to exacerbate the post-1980 trend toward a greater share of milk produced in the more prosperous western regions of Turkey. Regional disparity in milk production increases more under the target price policy than under the price premium policy.

Keywords: Spatial equilibrium model, price premium, target price, Turkish dairy industry

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