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Abstract
The potential accession of Turkey to the EU, and the related adoption of the CAP by Turkey,
is expected to influence agricultural markets in both the EU and Turkey. The extent of the
accession impacts depends on the one hand on the way the CAP will be implemented in
Turkey, while on the other hand impacts are expected to be also shaped by macroeconomic
conditions (like exchange rates, GDP growth and inflation levels).
In this paper we provide a comprehensive model-based assessment of the potential impacts on
agricultural markets of a Turkish accession to the EU. We first assess the impacts under the
assumption of standard macroeconomic projections, then we analyse how a different TL/Euro
exchange rate, a doubling of the Turkish inflation rate or a doubling of the Turkish GDP
growth rate would influence the accession impacts.
Results of the Turkish EU-membership simulation show that the impacts on agricultural
markets in Turkey are significant, while effects on EU markets are rather limited. The main
impact on Turkish agriculture is a reduction of producer prices. With market prices and
produced quantities declining, and as the coupled Turkish direct payments and the input
subsidies will be replaced by lower payments of the CAP, agricultural income is expected to
be reduced especially for Turkish crop producers (except for tobacco). In contrast, accession
effects on the Turkish livestock sector are projected to be positive, mainly due to lower feed
costs. Furthermore, the demand levels of most commodities are projected to increase due to
lower prices, thus Turkish consumers are expected to gain from an accession to the EU. The
further analysis reveals that in particular a depreciation of the Turkish lira alters the results of
the accession scenario.