Do Agricultural Input Components Respond Differently to Exchange Rate and Oil Price Shocks? Evidence from Türkiye

Abstract

Objective: In this study, we examine the effects of exchange rate and Brent crude oil price changes on three important agricultural input components in Türkiye, namely energy and lubricants, fertilizer and soil improvers, and animal feed.Materials and Methods: Separate Autoregressive Distributed Lag (ARDL) models were estimated for each category of inputs using monthly data from January 2020 to April 2026.Results: The results reveal significant heterogeneity in the transmission of macroeconomic shocks across agricultural inputs. In the long run, only a relationship was found between prices of energy and lubricant. The estimated long-run elasticity in relation to the currency rate was 1.05, and the comparable elasticity in relation to Brent crude oil prices was 0.29. The absence of evidence for long-run cointegration for fertilizer or animal feed prices suggests that domestic market conditions and state interventions play a more important role in influencing their price dynamics.Conclusion: These results indicate that aggregating agricultural input costs into one index may conceal significant differences in cost formation across different input categories. The results provide useful data for agricultural policy in that strategies targeted at stabilizing production costs should discriminate between energy related inputs and other significant agricultural inputs.