Before Privatization There was Its Impact: Sugar Factories in Turkey

This paper estimates the effect of a sugar-factory privatization policy on sugar beet acreages in Turkey. It finds that sugar beet acreages decreased by more than 15% due to the 2018 privatization of several sugar factories. Farmers decreased their contracted acreages in the middle of 2018, after the privatization announcement but before the actual transfer of the institutions. Production continued to decrease in the following years for the farms that were in the “catchment area” of the privatized factory group. However, for the farms that were in the area of the factories in which privatization was subsequently canceled, the negative effect of the announcement vanished. The results show that privatization policies can significantly affect markets even before the transfer of the institutions to the private sector.