Economic Impact of EU Membership on Agriculture in Turkey Hiroshi Kameyama*, Erol H. Cakmak**, and Yong Shou Lu* *Faculty of Agriculture, Kagawa University **Department of Economics, Middle East Technical University, Turkey Introduction This study aims to evaluate the impact of EU membership of Turkey on agriculture using a regional agricultural sector model for Turkey. Further liberalization of trade in agriculture is expected to become top priority in Turkey. Apart from bilateral trade agreements and ongoing WTO negotiations, Turkey is also a candidate to join the EU. The membership will imply full liberalization of agricultural trade with one of the top traders in the world, and also with her major trading partner. The fiscal impact of the implemented agricultural policies was one of the reasons which eventually paved the way to a structural adjustment program by the end of Question 1)The magnitude and the distribution of the costs and benefits of the past agricultural policies, and the recent agricultural policy reforms. 2)The food (agricultural products) demand- supply model used in the impact assessment. METHOD This study is one common economic application of nonlinear programming which involves price endogenous nonlinear model of Agriculture in Turkey for 50- commodities in 4 Turkey regions, which is called Agricultural Sector Model (ASM) as well. As the second progress, Positive Mathematical Programming (PMP) is incorporated to make smooth calibration[2,3]. Calibration is performed for activity level of crops acre and livestock. SCENARIOS BP : Base Period, three years average of Out-EU : without membership in 2005 In-EU1 : with membership of EU In-EU2 : with membership of EU and compensated payment depend on negotiation. Exogenous parameter value: the increment of population 1.5%, income 1.5% annually. Technical innovation, irrigation area increase 210,000 ha (GAP 150,000 ha), exchange rate 1999 USD1=TL Cotton Soybean0080 Sun flower Olive Table 1 Deficiency Payment in Base Period US $ per ton References [1] Erol H. Cakmak and Haluk Kasnakoglu (2002) Assessment of Agricultural Policy, Report of the Par-Paa Project draft, Ankara. [2] Howitt, E. Richard (1995) Positive mathematical programming. American Journal of Agricultural Economics 2. 77: [3] Torben Wiborg, Bruce A. McCarl, Svend Rasmussen, and Uwe A. Schneider (2005) Aggregation and Calibration of Agricultural Sector Models Through Crop Mix Restrictions and Marginal Profit Adjustments, Paper prepared for presentation at the PMP, Extensions and Alternative Methods Organized Session of the XIth EAAE Congress (European Association of Agricultural Economists). BPOut-EUIn-EU1In-EU2 m. $. Total Surplus74,66487,17888,88488,629 Producer Surplus26,57930,05825,39125,323 Consumer Surplus48,08557,12063,49363,306 % Total PS CS Results and Discussions Producer surplus decrease and Consumer surplus increase. Agricultural policy in Turkey has strong tendency as income transfer for winning election. So for farmers it has been the main unstable factors. It takes time by harmonizing the policy instrument by adjusting to EU framework. Table 2 General Results of TASM-EU Scenarios Million US dollar, % DATA State Static Bureau, State Planning Agency, Directorate of Village Services, and FAO and World bank data for cross checking. Output of crops section includes i) yield, ii) animal consumption, iii) byproduct (feeding crops, forage, wheat straws, etc). Input resources are land, labor hours, tractor hours, fertilizers and seeds. Land are classified into rain fed land, irrigated land, forest land and meadows.