Analysis of the impact of agricultural credits on agricultural mechanization in Türkiye

Abstract

Agricultural mechanization is one of the high-cost important inputs used in agricultural production. Thanks to agricultural mechanization, time and manpower are saved greatly in the agricultural production process. Agricultural loans, one of the most important agricultural financing instruments, are considered necessary for agricultural enterprises to invest in agricultural mechanization. This study, which adopts a quantitative research method approach, aimed to analyze the impact of agricultural loans on agricultural mechanization in Türkiye using time series analysis. Within the scope of the purpose, annual data covering the period 1981-2022 were gathered from data sources related to loans and agricultural mechanization. A log-log model was constructed with loans as the independent variable and agricultural mechanization as the dependent variable, and ARDL bounds testing method was applied in the estimation of the model. According to the findings obtained from the estimation of the model, there was a long-term, positive, and statistically significant co-integration relationship between loans and agricultural mechanization variables. A 1% increase in the loan balance was found to increase agricultural mechanization by approximately 0.035%. On the other hand, the short-term relationship between the variables was found to be negative and statistically significant. Short-term deviations from the long-term equilibrium caused by shocks were shown to vanish by approximately 86% after 1 period. In this context, it is clear that the adaptation process between the variables is very rapid.