AN ECONOMETRIC ANALYSIS OF THE RELATIONSHIPS BETWEEN ECONOMIC GROWTH AND AGRICULTURAL CREDITS FOR PROPOOR GROWTH in TURKEY

Year 2012, Volume: 4 Issue: 2, 355 - 364, 01.12.2012

Necmiye Cömertler Şimşir

Abstract

The agricultural sector is important for Turkey for many reasons such as high rate
of rural population, a large share of employment in the agricultural sector, the
sector's contribution to the formation of national income, and production capacity
of sector. In recent years, although the share of agriculture sector in GDP and in
foreign trade has declined, the share of it in employment is still protected. The
agricultural sector is the backbone of the rural economy.
Although there is a common view that agriculture is an important sector for an
economy, there is no consensus about preference of agricultural growth in
reducing poverty as the best remedy. Some researchers advocates that primarily
this sector should bear of the importance in reducing poverty because the majority
of the poor live in rural areas and are employed in the agricultural sector. Another
view is that non-agricultural activities provide capital accumulation and thus more
rapid development. Many studies in the literature, suggest that investments in the
areas like rural infrastructure, health and education with agricultural development
in developing countries are pro-poor.
The objective of this study is to examine whether there is a relationship between
agricultural growth and economic growth in the long-term and to analyze whether
there is a relationship between agricultural credits as an agricultural support and
agricultural growth in the long term. In addition, it is aimed to investigate if the
agricultural credits is effective on the number of people employed in agriculture.
Empirical findings of the study reveals that agricultural credits has a direct effect
on agricultural income and employment, on the other hand it also shows that
agricultural credits has indirect effect on the agricultural income due to the impact
of agricultural credits on agricultural income and the impact of agricultural
income on agricultural employment.

Keywords

Pro-poor growth, agricultural credits, agricultural growth

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