Possible Effects of Licensed Warehousing System on Hazelnut Producers’ Incomes in Türkiye

Abstract

Hazelnut producers in Türkiye tend to sell hazelnuts immediately after harvest. However, since hazelnut prices are very low at harvest time, this situation negatively affects producer incomes. This study aims to reveal the effects of the licensed warehouses established in Türkiye and the government’s support for encouraging licensed warehouses on the incomes of hazelnut producers. In the study, the profitability coefficient was calculated using 14-year time series data of hazelnut prices. The study result showed that storing hazelnuts in licensed warehouses without any support and exemption contributed 10% to producer incomes. It was also determined that producer incomes would increase by 22% as a result of the support and exemption policies implemented by the government for hazelnut production. It was concluded that keeping hazelnuts in the licensed warehouse and selling them in the following months positively affects producer incomes even without support and exemptions. For this reason, instead of selling hazelnuts immediately, producers are recommended to keep their products in licensed warehouses and sell them in the following months. The support system should be continued in a planned manner until the licensed warehousing system in Türkiye reaches a level where it can function on its own.

1. Introduction

Hazelnut is a strategic product for the Turkish economy. Türkiye, to date, is so far the leading hazelnut producer and exporter in the world. According to [1], total hazelnut production in the world in 2022 is 1,195,732 tonnes. Türkiye ranked first with 765,000 tonnes and a 63.98% share, Italy ranked second with 98,670 tonnes and an 8.25% share, Azerbaijan ranked third with 72,105 tonnes and 6.03% share, the United States ranked fourth with 70,310 tonnes and a 5.88% share, and it was followed by Chile with 62,557 tonnes and a 5.23% share [1]. Hazelnut production provides employment for many people, and approximately 2 billion 349 million dollars of income was provided to the Turkish economy from hazelnut exports in 2023 as well. In Türkiye, 97.22% of hazelnut production is in the coastal part of the Black Sea Region, while the rest is produced in the interior parts. The most intensive hazelnut production is in Ordu (30.59%), Samsun (17.31%), Sakarya (12.70%), Giresun (11.09%), and Düzce (10.25%), respectively. These provinces are followed by Zonguldak, Trabzon, Bartın, Kocaeli, and Kastamonu [2] (Figure 1).

In Türkiye, hazelnuts are intensively marketed by the producers, especially in the period of a few months after harvest, which creates a price risk for the product. Hazelnut producers generally sell their products at the low post-harvest price level due to financing and storage problems and earn a low income. It is of great importance that hazelnut is stored on the market in the quantity and quality demanded to maintain the appropriate level of prices in the hazelnut market and to maintain the quality of food. However, the structures in which producers store hazelnuts generally do not reflect the ideal warehouse characteristics. The licensed warehousing system ensures that hazelnut is stored under safe and standardised conditions. In Türkiye, licensed warehousing is a tool used for the storage and stock management of agricultural products. It is regulated by the Licensed Warehousing Law that entered into force in 2005. According to the law, a licensed warehouse is a facility that provides services for storing standardizable basic and processed agricultural products such as grains, pulses, cotton, tobacco, hazelnuts, oilseeds, vegetable oils, sugar, etc., in healthy conditions and for commercial purposes [3]. The difference between licensed warehousing and other storage systems is that it is only valid for agricultural products that can be stored for a long time and can be standardised. However, licensed warehouses are secure facilities inspected by the Ministry of Agriculture and Forestry, where products are stored at certain standards and quality control is carried out. Licensed warehousing takes the necessary measures to prevent quality loss while storing the products, insures the products, and ensures that the product is used as collateral through various financial instruments (electronic warehouse receipt). In addition, the Ministry of Agriculture and Forestry aims to facilitate the transition of producers to the licensed warehousing system by offering various support programmes to encourage licensed warehousing.

There are studies in the literature about the functioning of the system on licensed warehousing [4,5,6,7,8,9,10,11,12,13], factors affecting the use of licensed warehouses by producers [14,15,16,17,18,19,20,21,22,23], and capacity optimisation in licensed warehouses [24,25]. On the other hand, there are few studies on the effect of licensed warehousing systems on producer incomes [26,27,28]. These studies are mostly related to cereals (wheat, barley, and maize). There is no study on hazelnuts, which are strategic products for Türkiye. Unlike other studies, the long-term effects of storing hazelnuts in licensed warehouses on producer incomes were addressed for the first time. In addition, as a result of the interview with the licensed warehouse in Giresun province, which is the only hazelnut warehouse in Türkiye, it was determined that hazelnut producers do not prefer licensed warehouses because they do not have information about licensed warehouses and government supports. Therefore, the results of the study are expected to be useful for hazelnut producers and policymakers. A licensed warehousing system provides financial support to producers and protects them against market fluctuations. However, hazelnut producers in Türkiye have a tendency to sell hazelnuts immediately after harvesting [29]. During the hazelnut harvest period, hazelnut prices are low due to excess supply (supply shocks). However, if the producers can store hazelnuts in good condition, they will be able to sell hazelnuts at higher prices during periods of reduced supply. This situation is necessary to ensure the financial sustainability of hazelnut producers. This can only be achieved through licensed warehousing. In this study, the difference between the incomes of producers who sell hazelnuts immediately and those selling their products in the following months by storing them in licensed warehouses was investigated, and the results were presented in proportional terms. In addition, there are many state supports in the licensed warehousing system in Türkiye. Calculations were made in two different scenarios, with and without taking into account the state supports. A preliminary study was previously conducted in our unit where the economic benefit of the licensed warehousing system was measured at the producer level. The study concluded that keeping products in licensed warehousing provides additional income to producers [28]. This study was conducted to reveal the longer-term effects of the licensed warehousing system and government incentives in a more comprehensive manner. The study aimed to spread the price risk over years by conducting a longer-term analysis.

2. Materials and Methods

The main data of the study consists of hazelnut price time series data for 14 seasons belonging to the 2009/2010–2022/2023 production periods. These data were obtained from the Turkish Statistical Institute (TurkStat) internet system/database. In the study, the beginning of the hazelnut marketing season was considered as August and the end of the season as July. The number of licensed warehouses in Türkiye is 224 [30]. However, in Türkiye, there is only one licensed warehouse (17,000 tonnes capacity) for hazelnut products in Giresun province. This company is “Giresun Hazelnut Agricultural Products Lisensed Warehouse Inc., Giresun, Türkiye” [31]. The findings of the study are expected to affect all hazelnut producers in Türkiye.

2.1. Calculation of Financial Results in Licensed Warehousing

In the study, the effect of licensed warehouses on producer incomes in hazelnuts was calculated. The research is based on two different scenarios. In the first scenario, support and exemption conditions were taken into consideration, whereas in the second scenario, they are not. These scenarios are based on storing hazelnuts for 12 months instead of selling them immediately after harvest. Since the harvest period coincides with almost the same period in hazelnut-growing regions in Türkiye, there is often surplus supply. This is the period when prices are generally low. The setup of the scenarios is that the hazelnut is stored in licensed warehouses instead of being sold immediately during the harvest period and sold in the following periods when the hazelnut price reaches higher levels than the harvest price.

In the first scenario, producer incomes were calculated by including current licensed warehousing rent support (USD/ton), electronic warehouse receipt (EWR), loan interest discount support (USD), product laboratory analysis support (USD/analysis), withholding tax, and value added tax (VAT) exemption (USD) to be paid after the sale. In the second scenario, producer incomes were analysed by exempting the above support items. In both scenarios, it is assumed that producers utilise 75% of the loan at the upper limit of the loan interest discount percentage given by the government on the value of EWR. For the remaining amounts, it is assumed that they utilise loans at the market interest rate. August is taken as the harvest period of hazelnuts. In the study, the effect of licensed warehousing on the income of producers was determined using the formula (given below) of the profitability coefficient of the licensed warehousing system utilised in the study of [26].

$$\mathrm{K}={\displaystyle \frac{[\left({\mathrm{P}}_{2008}-{\mathrm{C}}_{2008}\right)+\left({\mathrm{P}}_{2009}-{\mathrm{C}}_{2009}\right)+\left({\mathrm{P}}_{2010}-{\mathrm{C}}_{2010}\right)+\left({\mathrm{P}}_{2011}-{\mathrm{C}}_{2011}\right)+\left({\mathrm{P}}_{2012}-{\mathrm{C}}_{2012}\right)]/\mathrm{Y}}{{\mathrm{P}}_{\mathrm{S}}}}$$

(1)

where K denotes monthly profitability coefficient of the product stored in licensed warehouses; P denotes price in a given month; C denotes sum of hazelnut storage cost and loan interest cost; PS denotes average price for the following harvest season; Y denotes number of years in the observed period (number).

$$\mathrm{C}=\left(\mathrm{V}\times \left(\mathrm{I}+\mathrm{S}\right)\right)\times \mathrm{N}$$

(2)

where V denotes value of the product; I denotes average interest rate; S denotes warehouse rent; N denotes number of months that grain is stored.

$$\mathrm{I}=\mathrm{I}\mathrm{w}\times \mathrm{T}+\mathrm{I}\mathrm{o}\times (1-\mathrm{T})$$

(3)

where Iw denotes the interest rate on a debt against warehouse receipt; T denotes the percentage of the grain value of the loan to be received for the existing warehouse receipt approved by the banks; Io denotes the total loan interest rate not covered by the loan against the warehouse receipt.

$$\mathrm{R}=\left(\mathrm{K}-1\right)\times 100\mathrm{\%}$$

(4)

where R denotes percentage of profit or loss.

In the study, both the differences in practices between countries and the legal regulations regarding licensed warehousing in Türkiye are taken into consideration. Since there is no standard interest rate spread over 12 months, the interest rates published by the Central Bank of the Republic of Türkiye for the relevant periods were used [32]. The formula was revised to cover the last 14 production periods, and financial results were obtained under Turkish conditions. In calculations without subsidies and exemptions, the relevant coefficients are included in the calculation as “0”. The purpose of averaging over many years (14 years) is to distribute and minimise climate, yield, and price risks. In this study, the formula used by [26] was revised according to the Turkish conditions and reconstructed as given below by adapting it to the legislation on licensed warehousing.

$$\mathrm{K}={\displaystyle \frac{[\left({\mathrm{P}}_{2009-2010}-{\mathrm{C}}_{2009-2010}+{\mathrm{A}}_{2009-2010}\right)+\cdots +\left({\mathrm{P}}_{2022-2023}-{\mathrm{C}}_{2022-2023}+{\mathrm{A}}_{2022-2023}\right)]/\mathrm{Y}}{{\mathrm{P}}_{\mathrm{S}}}}$$

(5)

where K denotes the monthly profitability coefficient of the product stored in licensed warehouses; P denotes price in a given month (USD/tonne); C denotes the sum of hazelnut storage cost and loan interest cost (USD); A denotes the amount of exemption from withholding tax (2%) and VAT (1%) for products stored and sold in a licensed warehouse (USD); PS denotes the average price for the following harvest season (USD/tonne); Y denotes the number of years in the observed period (14 years).

$$\mathrm{C}=\sum \mathrm{S}+\left(\sum \mathrm{P}\times \mathrm{I}\right)+L$$

(6)

where S denotes warehouse rent (USD/tonne); I denotes average interest rate (%); L denotes loading-unloading fee of the product entering and leaving the licensed warehouse (USD/tonne).

$$\mathrm{I}=(\mathrm{I}\mathrm{w}\times \mathrm{T})+(\mathrm{I}\mathrm{o}\times \left(1-\mathrm{T}\right)$$

(7)

where Iw denotes the interest rate on debt against warehouse receipt (%); T denotes the percentage of the grain value of the loan to be received for the existing warehouse receipt approved by the banks (75%); Io denotes the total loan interest rate not covered by the loan against the warehouse receipt (25%).

$$\mathrm{R}=\left(\mathrm{K}-1\right)\times 100\mathrm{\%}$$

(8)

where R denotes percentage of profit or loss (%).

2.2. Legislation Regarding Licensed Warehousing Supports

In Türkiye, the Law on Licensed Agricultural Products Warehousing entered into force after being published in the Official Gazette dated 17 February 2005 and numbered 25730 [3]. For hazelnut in the 2022/2023 production period in Türkiye, the monthly rental fee for licensed warehouses is USD 1.48/ton, and the loading and unloading fee is USD 2.75/ton. In Türkiye, warehouse rent support (USD 0.96/ton) is paid for hazelnuts for 3 years starting from 22 June 2021 [33].

Producers and producer organisations benefiting from the additional rent support are provided with transportation support not exceeding USD 1.37/ton for hazelnuts delivered to the warehouse, provided that they document their hazelnut products in licensed warehouses. Since there is no relationship between transport support and storage cost, transport support is not included in the analysis. In addition, the “weighing fee”, which was collected from producers until 2017, was not taken into account in the analyses as it was included in the licensed warehouse rental fee for 2018 with the relevant decision of the Ministry [34].

For the analyses to be carried out by authorised classifiers before the delivery of the products to be stored in the licensed warehouse, an analysis fee support is provided, not exceeding USD 1.37 per vehicle [35]. Due to the wide range of capacities of vehicles, the average vehicle size was assumed to be 15 tonnes, and an average analysis fee of USD 0.09 per tonne was taken into account in the calculations based on the interviews with licensed warehouses.

Producers who deliver their products to licensed warehouses in return for EWRs receive a 100% discount on the interest rates of loans to be extended up to 75% of the promissory note amount with a maximum maturity of 9 months, in line with their production capacity [35]. These rates and periods were used in the analysis. In addition, as a result of the interviews with banks, it was determined that the interest rates of the loans extended against EWRs are close to commercial loan interest rates. For this reason, commercial loan interest rates were calculated as monthly averages in interest calculations other than this rate and duration [32]. Hazelnut prices were compiled from the Turkish Statistical Institute (TurkStat), and the prices received by producers in Türkiye for the last 14 years were used every month [36].

Earnings arising from the exchange of EWRs given to the producer for the product delivered to the licensed warehouse are exempt from income/corporate tax until 31 December 2028. In addition, VAT arising from the exchange of EWRs will not be collected. Producers who sell their products through EWRs will not be charged a 2% withholding tax until 31 December 2028 [35]. The withholding tax (2%) and VAT (1%) exemption amount for the products stored and sold in the licensed warehouse is calculated in USD for the period in which the product is sold and included in the analysis.

The profitability coefficient of stored products (K) shows the relationship between hazelnut prices in the months after harvest and the average hazelnut price at harvest time under the conditions of currently licensed warehousing rent support, EWR loan interest discount support, product laboratory analysis support, withholding tax, and VAT exemption to be paid after the sale in the 14-year period. Recommending storage instead of sale at harvest time, the coefficient K should be greater than “1”. If this coefficient is less than 1, storage cannot be recommended because it brings losses. In addition, the percentage of profit or loss (R) of storing hazelnuts in a licensed warehouse as a financing strategy instead of selling the product at harvest time was also calculated.

3. Results and Discussion

When the monthly average hazelnut prices in Türkiye for the period 2009–2023 are analysed, significant fluctuations were observed. In the last fourteen years, the largest price increase according to the harvest period was realised in July of the 2018/2019 marketing season (64.63%), June of the 2013/2014 marketing season (59.72%), and June of the 2014/2015 marketing season (56.22%). In these marketing periods, it was observed that hazelnut prices were higher in the months close to harvest. The 2015/2016 and 2017/2018 marketing seasons in the last 14 years are typically the seasons when hazelnut prices remain low compared to the harvest season. Hazelnut prices decreased by 13.79% and 42.16% at the end of the 2015/2016 season and by 0.63% and 20.59% in the 2017/2018 season compared to the harvest period. Hazelnut prices started to rise again with the 2020/2021 season. Hazelnut prices fluctuated, especially in the 2021/2022 and 2022/2023 seasons, but did not reach the peaks of previous periods (

Table 1. Developments in hazelnut prices in Türkiye by months (USD/tonne).

	2009/2010	2010/2011	2011/2012	2012/2013	2013/2014	2014/2015	2015/2016
August	2555.39	2650.46	2900.98	2514.22	2716.52	4341.44	5267.86
September	2720.12	2592.49	3246.54	2350.15	2741.49	4978.27	4196.20
October	2769.92	2693.06	3656.11	2340.95	2818.65	5712.24	4205.39
November	2695.91	2672.21	3747.68	2380.35	2858.91	6097.85	4541.52
December	2647.53	2683.15	3808.81	2579.97	2784.47	5971.15	4538.54
January	2857.49	2793.12	3850.05	2602.25	2832.87	5995.68	3787.89
February	2856.08	2975.68	3957.53	2587.68	2856.16	6203.10	3604.63
March	3016.40	3054.61	3698.09	2523.25	2754.99	6296.83	3423.55
April	3024.45	3160.42	3522.79	2538.31	3144.58	6230.78	3330.11
May	2964.55	3036.78	3433.59	2523.62	4036.72	6534.05	3136.75
June	2935.77	3061.45	3138.64	2554.75	4338.94	6782.27	3126.51
July	2922.58	2975.62	2869.99	2615.93	4262.10	6171.59	3022.77
	2016/2017	2017/2018	2018/2019	2019/2020	2020/2021	2021/2022	2022/2023
August	3435.87	2559.45	1837.63	2928.11	2877.75	2632.23	2752.99
September	4347.83	2543.22	1793.66	2762.22	2847.71	2763.20	2814.32
October	4005.94	2460.23	2077.01	2755.62	2849.93	2599.58	2771.40
November	3528.75	2320.16	2389.51	2859.77	2920.04	2230.30	2749.73
December	3149.97	2326.06	2512.19	2918.99	2758.69	1796.21	3161.99
January	2902.36	2346.03	2514.25	3002.62	2899.66	2107.36	3312.80
February	3066.15	2403.38	2810.69	3216.16	3069.69	2356.63	3321.94
March	2940.58	2409.25	2890.51	3142.01	2735.89	2301.31	2907.33
April	2808.01	2385.28	2813.92	3022.46	2610.66	2267.84	3226.57
May	2758.24	2170.30	2717.60	3230.75	2492.13	2217.75	3092.35
June	2725.21	2093.68	2871.68	3350.06	2426.52	2100.83	2760.52
July	2643.36	2032.43	3025.29	3104.61	2447.48	2143.50	2646.21

Source: Author’ own calculations based on [36].

). These changes are due to productivity differences in hazelnut production, climatic conditions, and supply-demand fluctuations in global markets.

In the first scenario created for hazelnut products, storage and interest costs were taken into account, and the incomes to be obtained by the producers under the relevant support and exemption conditions were revealed (

Table 2. Financial results in the presence of support and exemption conditions for hazelnut product (USD/tonne).

	2009/2010	2010/2011	2011/2012	2012/2013	2013/2014	2014/2015	2015/2016	2016/2017
September	136.98	−117.31	388.71	−182.81	80.62	702.4	−873.69	875.14
October	137.78	−149.84	865.63	−197.1	112.29	1550.87	−929.31	670.02
November	90.8	−165.21	881.9	−175.74	191.42	1817.29	−716.84	388.05
December	67.02	−5.86	1061.21	6.13	155.23	1839.54	−672.66	188.87
January	203.09	168.93	1020.21	−2.23	410.07	1910.70	−1306.08	124.16
February	272.73	391.74	940.17	−17.3	389.7	2405.48	−1539.14	219.03
March	461.38	437.05	777.86	−38.58	286.52	2687.33	−1821.20	82.66
April	372.48	415.52	581.9	−48.01	537.63	2625.46	−2020.71	−68.35
May	392.45	376.73	504.05	−52	1348.37	2803.07	−2183.51	−215.73
June	396.68	419.17	218.63	54.94	1687.87	3135.49	−2166.29	−320.01
July	288.7	395.1	−89.21	139.42	1558.88	2394.42	−2266.39	−411.55
	2017/2018	2018/2019	2019/2020	2020/2021	2021/2022	2022/2023	K	R
September	−78.26	132.76	−152.84	41.61	277.87	1660.10	1.02	2.26
October	−37.07	231.16	−131.34	171.96	292.55	1619.29	1.04	4.24
November	−50.69	358.77	−60.4	273.48	230.48	1564.13	1.05	5.12
December	−72.98	474.99	43.91	2.99	270.39	1968.48	1.09	9.15
January	−111.85	506.06	160.23	14.21	513.04	2123.26	1.13	12.91
February	−65.53	733.3	432.27	44.37	773.13	2118.74	1.17	17.23
March	−6.46	919.35	481.51	−79.43	864.12	1709.05	1.14	13.91
April	63.34	957	575.22	−25.08	786.22	2060.70	1.18	17.96
May	−6.31	938.9	779.88	−103.49	852	1923.27	1.19	18.63
June	−24.66	913.39	794.2	−108.96	847.27	2002.35	1.21	20.81
July	−73.61	1012.45	564.8	−95.79	860.45	1956.00	1.22	22.09

Source: Author’ own calculation.

). As a result of the analysis, it is observed that while significant gains are obtained in some years with the effect of support mechanisms in the hazelnut sector, serious losses are experienced in some years. This fluctuation reveals the effects of both market conditions and government intervention instruments on the hazelnut sector. Serious ups and downs were observed in the hazelnut sector in the 2009/2010–2016/2017 season. For example, in the September 2009/2010 season, the financial results recorded a positive value of USD 136.98/tonne, while a negative value of USD −117.31/tonne was recorded in the September 2010/2011 season. Similar situations are observed in other marketing seasons.

Financial results were generally more stable and positive in the 2017/2018–2022/2023 marketing season. Especially the 2018/2019 season was a period of significant recovery in the hazelnut sector, with significant gains of USD 231.16/tonne in October, USD 358.77/tonne in November, and USD 474.99/tonne in December. These gains continued until the 2022/2023 season, reaching USD 2123.26/tonne in January.

Support and exemption policies applied for hazelnut production have significant effects on producer incomes. This effect is seen from the changes in the K coefficient and R ratio. K and R mean the same thing. The K coefficient shows the effect of government subsidies on producer income. The continuous increase in the K coefficient in the 2022/2023 season (from 1.02 in September to 1.22 in July) shows that government supports have an impact on producer incomes. At the same time, it shows that producers can increase their income by storing in licensed warehouses thanks to these supports. Another result is that the increase in the K coefficient reflects the financial sustainability of hazelnut producers. This shows that the support will strengthen the financial situation of the producers in the long run. In periods when the K coefficient was low (for example, in some months of the 2020/2021 season), it was observed that the supports were insufficient. This may lead to reductions in producer incomes. In particular, decreases in national market prices may adversely affect the financial situation of producers (Table 2).

The study shows that the strategy of storing hazelnut products in licensed warehouses with government subsidies and financing them by using EWRs as collateral for short-term loans has positive financial results for producers instead of selling products at harvest time. According to the average of the last 14 years, the coefficient of K is 1.02 and R is 2.26 percent in September, the month immediately after the harvest. Accordingly, keeping the product in the licensed warehouse for 1 month after the harvest and selling the product at the end of September is 2.26% more profitable for the producer than selling at harvest (when all costs, supports, and interest are taken into account). Prices generally start to rise after harvest. According to the fourteen-year average, the highest profit rate compared to sales at harvest was realised in July. Selling in July is 22.09% more profitable than selling at harvest, and producers are recommended to sell in this month. June (R = 20.81%) and May (R = 18.63%) are other favourable months for sales (Table 2). In the study of [26] on wheat and maize products, it was found that the strategy of using licensed warehouses and postponing the sale of grain until after harvest is a profitable strategy for producers. He found that producers can increase their profits by 2 to 18 percent by postponing the sale of wheat. In the case of maize, the results obtained are different. In the strategy of postponing the sale of maize and selling it later, a 7% loss and a 12% increase were determined. In the study, it was stated that the most profitable months for wheat sales were February and March, while the most profitable month for maize sales was July. In the study of [27] for wheat and barley, it was found that the profit increased between 2.28% and 7.22% in wheat and between 2.26% and 8.28% in barley under support and exemption conditions. These findings are in parallel with the results of this study.

In the second scenario created for hazelnut, producer incomes were analysed by taking the storage and interest costs into consideration, but the current licensed warehousing rent support, EWR loan interest discount support, product laboratory analysis support, withholding tax, and VAT exemption to be paid after the sale (

Table 3. Financial results in the absence of support and exemption conditions for hazelnut product (USD/tonne).

	2009/2010	2010/2011	2011/2012	2012/2013	2013/2014	2014/2015	2015/2016	2016/2017
September	86.76	−164.37	338.17	−222.91	34.87	630.90	−940.68	809.86
October	62.46	−220.42	789.30	−256.99	44.73	1435.88	−1021.61	570.11
November	−10.85	−263.87	781.76	−255.34	99.01	1660.14	−842.12	259.20
December	−58.27	−130.46	933.47	−94.79	40.74	1635.06	−831.91	38.40
January	54.40	23.68	871.02	−125.04	271.54	1664.39	−1490.15	−44.12
February	96.07	222.67	765.06	−164.91	237.65	2114.95	−1743.03	35.74
March	264.67	244.54	570.12	−210.87	111.14	2363.11	−2054.71	−129.55
April	154.64	194.62	354.51	−242.23	337.60	2269.61	−2283.84	−306.32
May	156.99	135.75	266.95	−257.07	1131.65	2449.30	−2458.07	−459.25
June	157.09	174.53	−25.90	−156.72	1459.04	2774.87	−2438.17	−574.56
July	43.44	144.13	−340.74	−73.41	1324.51	2034.71	−2545.13	−674.30
	2017/2018	2018/2019	2019/2020	2020/2021	2021/2022	2022/2023	K	R
September	−139.98	82.15	−225.95	−31.04	185.05	1547.75	0.99	−0.53
October	−141.30	165.13	−232.28	71.70	161.52	1463.57	1.00	0.21
November	−188.27	266.53	−185.75	151.95	77.61	1372.65	1.00	−0.04
December	−238.55	352.91	−107.53	−138.34	111.99	1736.90	1.03	2.86
January	−313.97	362.66	−11.16	−152.54	369.29	1854.79	1.06	5.54
February	−306.85	571.91	240.67	−149.63	608.02	1817.44	1.09	8.81
March	−282.61	733.69	271.62	−302.16	678.45	1378.61	1.04	4.48
April	−241.57	757.28	352.84	−249.86	592.92	1700.08	1.07	7.48
May	−302.49	746.38	571.41	−315.89	655.31	1559.52	1.08	7.90
June	−300.61	727.97	587.21	−318.68	658.12	1637.19	1.10	9.84
July	−340.56	816.46	350.90	−301.32	682.22	1636.62	1.11	10.88

Source: Author’ own calculation.

). As a result of the analysis, it was observed that licensed warehousing without support and exemption conditions had a lower impact on producer incomes compared to the first scenario. The K coefficient for September is 0.99, and R is −0.53%. To recommend storage instead of sale at harvest time, the K coefficient should be greater than “1”. If the profitability coefficient (K) is less than 1, storage cannot be recommended because it brings losses. This means that keeping hazelnuts in licensed warehouses for 1 month and selling the product in September causes a 1% loss for the producer compared to selling at harvest (taking into account all costs). However, after this month, the K coefficient rises above 1, and producers make a profit. In this scenario, as in the previous scenario, June and July are the most suitable months for sales compared to other months. However, producers earn almost 11 percent less income compared to Scenario 1 (Table 3). The income increases in the second scenario are not sufficient for the preference of licensed warehousing.

Hazelnut plays a critical role in Türkiye’s agricultural exports. However, revenues from hazelnut production fluctuate over time. Hazelnut prices, which were relatively high in the 2009/2010 marketing season, experienced a serious decline in the following season. For example, in the 2010/2011 season, prices decreased in almost all months (Table 1). This situation was also reflected in the financial statements. On the other hand, in the 2011/2012 season, producer incomes increased in the first 9 months starting from September. This situation shows the existence of periodical fluctuations in hazelnut prices and production conditions in Türkiye. A great increase was observed in the incomes of hazelnut producers in the 2013/2014 and 2014/2015 seasons. Especially in the 2014/2015 production season, positive financial results starting from September and almost throughout the whole year made it a very profitable season for hazelnut producers. However, in the 2015/2016 season, these gains were reversed, and the financial results were seriously unfavourable to the producers. Starting from the 2017/2018 season, a more balanced course was observed, but negative results were experienced in certain months. During the 2022/2023 season, positive results were dominant, with gains starting in September (USD 1547.75/tonne) and peaking in June and July (USD 1637.19/tonne and USD 1636.62/tonne) (Table 3).

The K and R coefficients are used to assess weighted averages of financial results over many years. It is observed that the K coefficient has been gradually increasing since the 2009/2010 marketing season, reaching 1.10 in the 2022/2023 season. This shows that the sector has a stable and profitable performance. However, we should not forget the assumption that these values are obtained by storing them in licensed warehouses. The above financial results, which are shaped according to this assumption, are not large enough for the sustainability of licensed warehousing. The fact that the coefficient K reaches the highest level of 1.10 according to the financial results obtained for 14 years shows that the contribution of storing hazelnuts without support and exemption conditions to income is 10%.

Fluctuations in the hazelnut sector can be affected by various factors such as production conditions, global market demand, climate changes, and exchange rate movements. This analysis, which excludes supports and exemptions, shows the dependence of the hazelnut sector on market conditions and how fragile it is without government intervention. Therefore, the positive impact of government support on the sector and the pressure created by fluctuations in market conditions should be taken into account (Table 3).

The course of the “K” coefficient of hazelnut product under support and exemption conditions and without support and exemption conditions according to months is given in Figure 2. The graph shows the profitability coefficient of stored products. Here, the harvest month is considered August and is shown by the dashed line parallel to the horizontal axis. Under support and exemption conditions, the level of profitability increases steadily after harvesting until February (R = 2.26% to 17.23%); after February, it shows a temporary decline. However, after April until the new harvest period, the profit from hazelnuts shows an upward trend again.

The profitability coefficient for hazelnuts without subsidies and exemptions started to increase from December after harvest compared to sales immediately after harvest (R = 2.86%). This increase continued until February (R = 8.81%). After February, there was a short-term decline in the profitability coefficient, but then it started to increase again. It reached its highest level in July (R = 10.88%) (Figure 2) (Table 3). In his study, [27] found that without support and exemption conditions for barley and wheat products, the K coefficient and thus the R ratio ranged between −18.57% and −2.93% for wheat and between −2.74% and −20.46% for barley. In the study, it was stated that when support and exemption conditions are not provided, it may lead to losses. It was also stated that this loss in income is due to the fact that the licensed warehousing system has not yet developed in Türkiye [27]. These results differ from the results of the current research. This study showed a higher effect compared to the previous study [28]. According to the results of the long-term analysis, it was concluded that producer incomes increased in both scenarios.

4. Conclusions

In this study, the income effects of producers’ selling hazelnuts immediately and selling hazelnuts by storing them in licensed warehouses in the presence and absence of government subsidies scenarios in Türkiye were revealed. In the study, positive financial results were obtained in both scenarios, with and without government support, by storing hazelnuts in licensed warehouses compared to the producers selling hazelnuts immediately after harvest. Although licensed warehousing activity in hazelnut products results in earnings when support and exemption conditions are provided for producers, it may lead to a decrease in earnings when support and exemption conditions are not provided. This decline results from the fact that the licensed warehousing system has not developed sufficiently in our country. Improving the financial results in favour of the producer with the support and exemption conditions to be applied by the state is considered very important for the licensed warehousing system to grow, develop, and become sustainable. With the development of licensed warehousing, the establishment of specialised commodity exchanges, and the widespread use of futures transactions, the formation of stable prices will be ensured, and as a result, price declines during harvest periods will be prevented.

Government support and exemption policies indirectly reduce producers’ costs and increase their incomes. However, producers may be negatively affected by market fluctuations in years when price movements are negative. Therefore, long-term planning and continuous improvement of support policies will have a more positive impact on producer incomes.

As a result of this periodic analysis of the hazelnut sector, the impact of market conditions and government interventions on the sector has been revealed. In this context, developing flexible policies for market conditions and improving the support system is of great importance for the sustainability of the hazelnut sector. The development and sustainability of the licensed warehousing system to ensure price stability depend on these flexible policies and support systems. The support system should be continued in a planned manner until the system can function on its own.

In conclusion, the hazelnut sector has the potential to grow based on its dynamics even without government support. However, it remains vulnerable to market fluctuations. Therefore, it is of great importance to develop sustainable growth strategies.

Therefore, it is suggested that future studies should focus on planning hazelnut production with linear or dynamic programming methods and conducting feasibility studies to increase the number of hazelnut licensed warehouses, which is currently one in Türkiye.