How Sustainable Is Türkiye's Food Import? A Linearized Almost Ideal Demand System Estimation for Food Import Elasticities

Abstract

This study examines the import demand for four key agricultural commodities—cereals, meat, sugar, and vegetable oils—in Türkiye, using a Linear Almost Ideal Demand System (AIDS) model. Spanning the period from 1986 to 2020, the analysis focuses on these commodities as they constitute over 90% of Türkiye's food import budget. The results reveal significant long-run own-price elasticities, with vegetable oils and cereals being particularly sensitive to price changes, whereas the impact of price on meat and sugar imports is negligible. The study also highlights the limited role of income and exchange rates on import demand, except for sugar where the exchange rate has a significant but small positive effect. Short-run estimates indicate a heightened responsiveness of budget allocations for cereals and vegetable oils to price fluctuations, suggesting a persistent element in food import patterns over time. The findings underscore the essential nature of these commodities, with low own-price elasticity for cereals and vegetable oils, reflecting their status as necessities. In contrast, short-run elasticity results suggest that cereal imports may be viewed as a luxury, with the potential for domestic production to substitute imports. The study concludes that Türkiye's food security is increasingly vulnerable to global price fluctuations, particularly for vegetable oils, and calls for policies that stabilize exchange rates and inflation while enhancing domestic agricultural productivity to mitigate this risk.