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Before Privatization There was Its Impact: Sugar Factories in Turkey.
1Department of Agricultural Economics, Ankara University, Ankara, Turkey.
Review of Industrial Organization
|January 30, 2023
Summary
Privatization of sugar factories in Turkey led to a significant decrease in sugar beet acreage. This policy
Area of Science:
- Agricultural Economics
- Public Policy Analysis
Background:
- Privatization policies can have significant economic impacts on agricultural markets.
- Understanding the effects of privatization on crop production is crucial for policy-making.
Purpose of the Study:
- To estimate the impact of sugar factory privatization on sugar beet cultivation in Turkey.
- To analyze farmer responses to privatization announcements and policy changes.
Main Methods:
- Econometric analysis of sugar beet acreage data.
- Comparison of farms in areas affected by privatization versus those unaffected.
Main Results:
- Sugar beet acreage declined by over 15% following the 2018 privatization of sugar factories.
- Farmers reduced contracted acreage after the privatization announcement, prior to asset transfer.
- Negative impacts on production persisted in areas of privatized factories but vanished when privatization was canceled.
Conclusions:
- Privatization policies can influence agricultural markets even before the official transfer of assets.
- Farmer behavior and market dynamics are sensitive to policy announcements and uncertainty.
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