The organic premium at risk: How exchange rate depreciation undermines Tunisia’s agro-export transition

This study provides an extended analysis building on recent ARDL work by Jeder (2020), incorporating exchange rate dynamics, testing for structural breaks, identifying indirect causal pathways, and applying multiple robustness checks. Using annual data (2000-2024), we employ an ARDL model with structural‑break corrections, supplemented by simplified causality tests (Toda-Yamamoto and frequency‑domain). Results reveal a robust long‑run relationship: a 10% expansion in certified organic area increases export value by 6.5-7.0%. Conversely, a 10%-dinar depreciation reduces exports by approximately 7%, contradicting standard price‑competitiveness theory. We identify a novel indirect channel: exchange rate depreciation affects exports primarily by disrupting organic land allocation decisions. Threshold analysis shows organic benefits intensify beyond 45,000 hectares. Findings underscore that macroeconomic stability is essential for leveraging Tunisia’s organic leadership.