THE EFFECT OF VULNERABLE ASSETS ON HARVESTING LABOR PAYMENT REGIME IN TURKISH AGRICULTURE


Demir İ. , Köse E. G.

e-ICEESS'20, Balıkesir, Turkey, 12 - 13 December 2020, pp.93

  • Publication Type: Conference Paper / Summary Text
  • City: Balıkesir
  • Country: Turkey
  • Page Numbers: pp.93

Abstract

Turkey produces some three hundred agricultural produces utilizing half of its land area. According to Turkish Statistical Institute, 20% of labor force in Turkey are employed in agriculture. Among the tasks of agricultural production, harvesting, particularly, is labor-intensive for many crops. This gives a rise to crucial contracting, monitoring, payment and productivity issues regarding harvesting labor. Harvesting workers are basically paid based on lump-sum daily wages, piece-rate (performance based) wages, salaries, sharecropping, tournament wages, and fixed pays. The determinants of these pay regimes have not been studied in the context of Turkish agriculture. This study is to fill this gap and analyze the determinants of pay regime within a multinomial logistic regression model estimation. The unit of analysis of the study is agricultural produces. The study argues that piece-rate harvesting pay is not profitable for all agricultural produces. For example, trees in tree nut production such as pistachios and hazelnuts, present ‘vulnerable asset’ nature that farmers see the trees as investment to be protected for future yield. Forcing harvesting labor to collect more in a given time either through harsh monitoring or through piece-rate payment may damage the agricultural asset and even lower the crop. Therefore, although harvesting labor would have been more productive if paid by piece-rate, a daily lump-sum pay would be more profitable in the long run. We determined payment regime and laborintensitivity of harvesting of agricultural produces based on literature and expert opinions. Expert opinions have been collected from sampled agriculture offices of relevant crops. We categorized crops for vulnerable asset status based on literature and expert opinion and formed dummy variables accordingly. We ran a multinomial logistic regression estimation in order to analyze the probability of a certain pay regime relative to piece-rate pay regime. We found a significant relationship between vulnerable asset nature of the cultivar or crop and probability of payment regime against piece-rate payment regime. Specifically, harvesting labor for agricultural crops that present vulnerability is more likely to be paid daily lump-sum wages relative to piecerate payment.