turkish agriculture sector

Transkript

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TURKISH AGRICULTURE SECTOR
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SEPTEMBER 2010
2
SEPTEMBER 2010
2010, Egeli & Co.
©
All rights are reserved.
The document and content may not be
reproduced, downloaded, disseminated, published,
or transferred in any form or by any means,
except with the prior written permission of
Egeli & Co. Finansal Yatırımlar A.S.
Authors
Atilla Yesilada, Murat Ucer, İbrahim Aksoy
Referee Report
Prof. Erol H. Cakmak
Contributors
Tan Egeli, Murat Cilingir, Elif Pehlivanli
Abdi Ipekci Cad. No. 40/10 Nisantasi 34367, Istanbul
Tel: +90 212 343 06 26 Fax: +90 212 343 06 27
www.egelico.com
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1.
PREAMBLE ............................................................................................................................................. 6
2.
BIOGRAPHIES ....................................................................................................................................... 8
3.
EXECUTIVE SUMMARY ......................................................................................................................... 12
A.
MACRO-REVIEW .................................................................................................................................. 17
A.1.
A.2.
A.3.
A.4.
A.5.
B.
STRUCTURAL COMPOUNDS OF THE TURKISH AGRICULTURE ............................................................... 27
B.1.
B.2.
B.3.
B.4.
B.5.
B.6.
B.7.
C.
SHARE OF AGRICULTURE IN PRODUCTION: RECENT UPDATES AND TRENDS..............................................17
PRODUCTIVITY IN AGRICULTURE .........................................................................................................18
LABOR FORCE AND LAND USED FOR AGRICULTURE ................................................................................19
AGRICULTURAL MAP OF TURKEY: PRODUCTS ON REGIONAL BASIS ..........................................................21
IMPORT AND EXPORT .........................................................................................................................23
DISTRIBUTION OF LANDS ...................................................................................................................27
USE OF TECHNOLOGY, MECHANIZATION AND INFORMATION...................................................................28
ARABLE LANDS..................................................................................................................................30
INTEGRATION OF AGRICULTURAL LANDS..............................................................................................30
DRY AND IRRIGATED FARMING............................................................................................................31
LIVESTOCK AND FISHERIES ................................................................................................................32
AGRICULTURAL SUPPORT SYSTEM .......................................................................................................34
MAJOR PRODUCTS............................................................................................................................... 41
C.1.
VEGETABLE PRODUCTION...................................................................................................................41
C.1.1.
Grains and Other Vegetable Products..............................................................................................41
C.1.2.
Industrial Crops ...........................................................................................................................44
C.1.3.
Vegetables and Fruits ...................................................................................................................45
C.2.
SMALL AND GREAT CATTLE BREEDING, POULTRY SECTORS .....................................................................47
C.3.
FISHERIES........................................................................................................................................51
D.
SPECIAL FILES: RELATIONS WITH FOOD INDUSTRY, GAP, EU AND WTO ............................................ 55
D.1.
FOOD INDUSTRY ...............................................................................................................................55
D.1.1.
General Assessment .....................................................................................................................55
D.1.2.
Demand Analysis .........................................................................................................................56
D.1.3.
Supply Analysis............................................................................................................................57
D.1.4.
Risks ..........................................................................................................................................57
D.1.5.
Business Branches in the Ascendant in Food Industry .......................................................................58
D.2.
GAP (SOUTHEAST ANATOLIA PROJECT): ONE-LEG GIANT .......................................................................59
D.2.1.
Benefits of GAP in Agriculture ........................................................................................................61
D.2.2.
Agricultural Potential of GAP ..........................................................................................................61
D.2.3.
Industrial Products in GAP .............................................................................................................62
D.3.
TURKEY AND EU’S COMMON AGRICULTURAL POLICY...............................................................................63
D.3.1.
Brief History ................................................................................................................................63
D.3.2.
Today of CAP ...............................................................................................................................64
D.3.3.
Future of CAP ..............................................................................................................................66
D.3.4.
Turkish Agricultural Policy and CAP: Harmonization and Conflicts ......................................................66
D.3.5.
Cost Analysis, Winners and Losers..................................................................................................69
D.4.
TURKEY AND WORLD TRADE ORGANIZATION ........................................................................................72
D.4.1.
GATT and WTO ............................................................................................................................73
D.4.2.
Political Position of Turkey before WTO ...........................................................................................73
D.4.3.
Uruguay and Doha Rounds ............................................................................................................74
E.
FINANCING OF AGRICULTURAL INVESTMENTS: EXPERIENCE OF TURKEY AND WORLD....................... 77
E.1.
POSITION IN TURKEY .........................................................................................................................77
E.2.
MICRO-CREDIT REVOLUTION IN THE WORLD ........................................................................................78
E.3.
COMMODITIES FUTURES AND AGRICULTURAL REAL ESTATE INVESTMENT TRUSTS ....................................80
E.4.
AGRICULTURAL INVESTMENT FUNDS: HISTORY AND FEATURES..............................................................81
E.5.
CASE ANALYSIS ON AGRICULTURAL INVESTMENT FUNDS .......................................................................83
E.5.1.
First Case Analysis: SEAF ..............................................................................................................83
E.5.2.
Second Case Analysis: Agricultural Investment Funds in the USA .......................................................84
E.5.3.
E.5.3 Third Case Analysis: Actis AAAF-owned by CDD Group plc.........................................................85
E.6.
TURKEY AND AGRICULTURAL INVESTMENT FUNDS.................................................................................85
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1. PREAMBLE
Egeli & Co., devoted itself to generating values for its investors since 2002 - its incorporation -, and being an
independent and boutique investment and portfolio management group, offers portfolio management, investment
management, risk management and investment consulting services to domestic and foreign institutional investors,
family corporations and private individual portfolios by means of creative financial products, investment themes and
platforms, which it has developed in the country and abroad.
Our group, still serving in the field of investment under the portfolio management, share certificates and fixed income
securities, decided to focus on the themes of real property, energy, infrastructure and special case investment,
particularly agriculture so as to create value in the long run for its investors and to provide continuous positive income.
Egeli & Co. Portfoy Yonetimi A.S., an affiliate of Egeli & Co. group, obtained permission for incorporation from the
Capital Market Board of the Prime Ministry of the Republic of Turkey, would become the first and the only portfolio
management company focused on “real asset” investments, after it obtains Portfolio Management and Investment
Consulting Certificates.
Egeli &Co., made up the principle of contributing to the development in our country of the agricultural sector, of top
priority among the global real asset portfolios, with its approach of “Sustainable Responsible Investments” (“SRI”) while
making its investments, targets to pioneer in the studies for increase of the agricultural added value and
institutionalization in the agriculture.
In this respect;
•
shifting the institutional and individual investments to the agricultural sector to form a sustainable and highly
competitive agricultural sector;
•
development of domestic development capacity and increase of the business opportunities by agricultural
activities being of crucial importance for our national economy;
•
optimization of the rural environmental conditions;
•
implementation of mechanisms - including risk management –, which enable effective utilization of the sources;
•
training the labor force required for continuity of quality in the agriculture;
•
carrying out agricultural production, effectively using the scientific approach and the technology
are the primary objectives of the group.
Our Report “Agricultural Sector in Turkey”, which we led with the aforesaid understanding and approach, is offered as a
product of best efforts of our investment team as well as Istanbul analytics team consisting of Atilla Yesilada, Murat
Ucer and Ibrahim Aksoy for evaluation by our business world and representatives of the sector.
Egeli & Co., starting with a vision to become a leader in all the subjects of activity, would increasingly and continuously
support the studies for development of agriculture of our country and increase its share in the economy.
We kindly extend our sincere thanks to, particularly, Istanbulanalytics team; distinguished Prof. Erol Cakmak for his
referee report and his valuable comments on this report; and everybody who contributed to preparation of this valuable
study, which we believe to be a guide for the activities for development of our country’s agriculture and to you to give
us feedbacks directing our future studies.
September 2010, Istanbul
TAN EGELİ
Chairman of the Board of Directors
Egeli & Co. Finansal Yatırımlar A.S.
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2. BIOGRAPHIES
AUTHORS
Atilla Yesilada
Born in Istanbul in 1961. Completed his secondary education in Austrian High School. Studied economy and business
administration in Eastern Illinois University in Illinois State of the United States. Completed his master degree on
economy in Santa Barbara Campus of California University. Attended Ph.D. studies on financial economy in Rennsselear
Polytechnic Institute in New York State. Served as a research associate in Jerome Levy Economics for one year and
published its articles in various scientific periodicals.
Returned to Turkey in 1990 and started his career as research manager in Global Menkul Kiymetler A.S. Served as
research manager in Global, Eczacibasi Menkul Degerler and Ege Yatirim brokerage companies. Within this period, won
more than 20 international research awards together with his team. Served as announcer in the morning programs in
CNBC-E television channel. Yesilada, subsequently presented various programs in Haberturk and Business Channel, is
still hosting a morning program “Coffee Smell” in Cem TV.
At the same time, Atilla Yesilada is still writing economy and finance articles in the periodicals Referans, Radikal, Para
and ARENA. The author, being consultant of GlobalSource in Turkey and having its principal place of business in New
York City, serves as consultant for about 90 foreign corporate customers. Furthermore, acts as an editor for English
website www.istanbulanalytics.com and Turkish finance web site www.bilgeekonomist.com. Married with one child.
Murat Ucer
Served as an economist in many international institutions such as in Institute of International Finance, Credit Suisse
and IMF and as consultant for Central Bank and Undersecretariat of Treasury in Turkey. Besides his many published
articles, he wrote a book on Turkey’s 2001 Crisis. Completed his B.A. and Ph.D. programs successively in Bosphorus
University and Boston College.
Works as an academic member in Koc University and additionally served as academic member in the past years in
Suffolk University in Boston and Bosphorus University in Istanbul.
Ucer, now working as consultant of GlobalSource in Turkey, is at the same time the founding partner of Ucer-Mizrahi
Bilgi Hizmetleri Ltd. Sti., which developed Turkey Data Monitor.
İbrahim Aksoy
İbrahim Aksoy, completed his B.A. in Economy and Sociology Departments (double major) in Bosphorus University,
served as an economist in GlobalSource Turkey.
İbrahim Aksoy, carrying out studies on agriculture and energy besides macro economy and markets, has been serving
as an economist in Ata Yatırım Menkul Kıymetler A.S since July 2010.
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REFEREE REPORT
Prof. Erol Cakmak
Born in Safranbolu in 1955. Completed his secondary education in Galatasaray High School and subsequently completed
his B.A Degree and master degree in the Department of Economy and Statistics in Middle East Technical University,
successively in 1979 and 1981. Completed his Ph.D degree in Stanford University.
Prof. Cakmak, still serving in the Department of Economy of Middle East Technical University, worked as Head of the
Department and Co-Head of the Department in the same university. Prof Cakmak, giving lectures of Micro Economy,
Research Methods, Mathematical Economy, Agricultural Economy and Industrial Economy, additionally gives lectures of
sector modeling and policy analysis as guest academic member in CIHEAM/IAMM (Mediterranean Countries Agricultural
Researches Institute) in France each year.
In recent years, researches of Prof. Cakmak, conducting two studies within the framework of the Frame Research
Program of EU Commission, focus on agricultural policy analysis, water policy and management, agriculture, activity,
agricultural sector and general balance models in EU and WTO.
CONTRIBUTORS
Tan Egeli
Received his B.A degree from Business Administration in Delaware University and master degree from Carnigie Mellon
University Tepper Business School. Egeli, started his professional career in Citibank, served in Interbank and
Bayındırbank as responsible for Capital Markets, particularly, International Capital Markets and Asset Management.
Served actively in the top management of successively Citicorp Menkul, Inter Yatırım Menkul and BSI Bayındır Menkul.
After leaving BSI Bayındır Menkul Degerler where he served as a member of the Board of Directors and Chief Executive
Officer, he incorporated Egeli Danısmanlik in 2002 and accordingly laid the foundations of Egeli & Co. Group, currently
active in the financial markets.
Egeli & Co. Group continues to grow with participation of Egeli & Co. Investment Management SA - incorporated in 2003
to offer Turkey-focused fund management services to the corporate investors resident abroad; in 2004, Egeli & Co.
Yatirim Ortakligi A.S, operating portfolio focused on Share Certificate Investments; in 2006, Varlik Yatirim Ortakligi A.S
making Bonds and Notes investments; in 2008 Simya Tarim Yatirimlari A.S; and in 2010 Egeli & Co. Portfoy Yonetimi
A.S, acting in the fields of portfolio management and investment consulting in both domestic markets and global
markets and being the first and the only “real asset” management company.
Tan Egeli currently serves as the Chairman of the Board of Directors of Egeli & Co. companies and as the Chief
Executive Officer in Egeli & Co. Portfoy Yonetimi A.S
Tan Egeli, being an active member of the Board of Directors in the Corporate Governance Association of Turkey and of
Endavour Association Consulting Committee, is at the same time a member of Istanbul Young Entrepreneurs
Association and Bugday Ecological Life Protection Association. Egeli, married with two children, is fluent in Germany and
English.
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Murat Cilingir
Murat Cilingir, being a senior portfolio manager, serves as Investment Committee member of Egeli & Co. and Board of
Directors member and Chief Executive Officer in Egeli & Co. affiliates.
Murat Cilingir, graduated from Electrical
Engineering Department of Istanbul Technical University and studied and completed Business Administration
Specialization Program in Istanbul University, has an advance certificate of Capital Market Board. Cilingir supervises and
directs “Real Assets” investments in the group. Based on its management experiences on infrastructure projects, he
mostly focuses on infrastructure, agriculture and energy investments.
Elif Pehlivanli
Elif Pehlivanli, born in Ankara, graduated from Department of Business Administration in Bilkent University. After
completing “Strategic Management and Planning” Certificate Program jointly organized by Marmara University and
Michigan State University, she received her master degree on Business Administration in Yeditepe University. She
attended “Real Properties Valuation Specialization” Certificate Program organized by Istanbul University.
She started her career in 1994 in Deloitte Touche Tohmatsu International, an international auditing company. After
receiving Sworn Public Accountant Certificate, she worked on Strategic Planning in Bayindir Holding and subsequently
on Corporate Financing and Mergers of Companies in Bayindir Menkul. Pehlivanli, conducting her studies on marketing,
served as Strategic Planning Director in the agency and worked as manager responsible for marketing in the leading
real property companies. Pehlivanli, serving as Marketing and Business Development Director in Egeli&Co., has one
daughter.
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3. EXECUTIVE SUMMARY
This study aims at offering a very comprehensive overview to the sector for the purpose of forming a reference for
searching investment opportunities in the agricultural sector in Turkey.
This study consists of four main chapters: “Macro-agriculture, structural parameters of the Turkish agriculture and
product range and special files closely related to the Turkish agriculture (such as food industry, Southeast Anatolia
Project (GAP), Relations with EU). In the last chapter of this study, after a brief outlook to the agricultural financing,
global experiences and possible role of investment funds in Turkey are discussed.
Share in nominal Gross Domestic Product (GDP) of the agricultural sector, procuring approximately 25% of the Turkey’s
employment, the GDP share, which was 8% in 2009, is currently quite lower compared to the employment rate. We
hereby witness that this reality, arisen as an apparent productivity problem, has not changed so much within the period
1998-2009.
Besides, in consistence with the general trend of urbanization, an important decrease is noticed in agricultural
employment; however, seasonal agricultural employment increased in the crisis years. However, we are of the opinion
that this is not “voluntary” but “obligatory” employment and this obligatory employment not only failed to contribute to
the productivity in agriculture but also caused more corruption in income distribution. Nevertheless, the facts that the
agricultural labor force is in the form of “unpaid family workmanship” and that the education level is very low support
our aforesaid opinion.
The share of the agricultural sector in the foreign trade of Turkey is at lower levels as well. Whereas the share of the
agricultural exportation was 4.4-4.5% in the total foreign trade as of 2009, the share of importation was 3.3% with the
volume of 4.6 billion dollars. On the other hand, when we include in this analysis food and beverages, tobacco and
tobacco products and animal and vegetable oils produced in the production industry, it becomes apparent that
particularly this second group contributed to the exportation considerably. However, upon consideration that the Brazil’s
agriculture and food export generated 72 billion dollars and Poland’s export generated about 16 billion dollars in 2008,
the question “Can’t Turkey do it better?” should be asked; and it should be stated that there might be an unrealized
important potential in this sector.
As for the arable lands, there is also a decrease in Turkey in recent years; although we did not encounter a concrete
reason for such decrease, we think that migration from rural areas to urban in the fast-growth period would have an
important role.
Even if Turkey is a rich country in respect of agricultural lands, the fragmentation of the lands into small pieces of land
ownership makes difficult to benefit from the economy of scale in particularly annual arable crops and livestock. In
Turkey, cultivated agricultural land (including long life plants such as fruit trees) of 24.5 million hectares existed in
2008. Arable lands - on which grains and vegetables, excluding long-life plants are cultivated - constitute 21.5 million
hectares of the total cultivated agricultural lands. It is observed that the number of the cultivated agricultural land
considerably recessed particularly in 2004-2008.
In Turkey, in accordance with the legal situation, 3,076,650 farms cover total land of 184.3 million decares. Average
size of the land for these farms is 59.9 decares and this size is below the average farm sizes of Europe and USA, being
successively 174 and 180 decares. However, it should be emphasized that the land sizes also visibly differ from each
other in EU. The farms, the sizes of which are below 100 decares, correspond to 85% of the total number of farms. One
of the most important problems in transition from extensive agriculture to the intensive agriculture is the ownership of
the fragmented small pieces of land.
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In order to cope with this obstacle hindering the productivity in agriculture, many legal arrangements have been made
since the establishment of the Republic of Turkey. As far as can be seen, one of the most effective factors, resulting in
fragmentation into small pieces of land, is the Heritage Act. Accordingly, upon enforcement of the draft law being
evaluated at the Prime Ministry during the preparation of our report and aiming at preventing the land division for
heritage, it becomes possible that the average size of farms increase. Another development in this respect is the
commencement of preparations for a new structuring under the title of “Agricultural Land Acquisition Office” affiliated to
the Ministry of Agriculture and Rural Affairs. This study aims at gathering the agricultural lands by acquisition, sale and
lease of the agricultural lands by the way of tender. However, it is of great importance that these attempts be handled
by an integral approach observing the other structural problems (such as acceleration of the cadaster studies,
strengthening the access by the farmer to the credit etc.)
Although use of technologies and know-how increases in number in the farms, that facts the average size of farms is
limited; that the breeders are hybridized in cattle breeding; and that the cattle races could not be protected are
considered as the factors slowing down the transition to the intensive agriculture. There are exemptions on this matter
in several sectors. For instance, the poultry sector heads the sectors, closely following up the developments and the
applicable techniques in Europe and USA.
Like the dominance of the small-size farms preventing vegetable-agricultural productivity, that the number of the cattle
and sheep is lower in the livestock farms is a factor hindering increase of the productivity. According to 2001
agricultural count; while 59.7% of the farms of cattle breeding has cattle less than 5, the rate of the farms owning
cattle less than 20 is 93.8%, being quite high.
According to the data of the Food and Agriculture Organization (FAO) of the United Nations, whereas cow milk of 3
billion dollars value has become the first in monetary value in the Turkey’s agricultural production listing as of 2007,
this is successively followed by wheat of 2.3 billion dollars value, tomato of 2 billion dollars value, grape of 1.7 billion
dollars value and cotton of 1.4 billion dollars value. Additionally, Turkey is on the top lines in the listing of numerous
agricultural products in the world.
The agricultural supports policy seems a field where the reform is apparently required. In time, an unchanged structure
and an unchanged cost are noticed; return from Direct Income Supports policy - initiated in 2001 however officially
ceased in 2009 – to the former structure is considered as “a step backwards” by the specialists, for instance by the
OECD. That the protectionism is so high to interrupt the relations with the outer world is one of the fundamental
reasons increasing the price support.
Grain production has an important role in agriculture of Turkey in terms of product range. As of 2008, 76.4% of the
cultivated agricultural land of 21,555 million, excluding long-life plants, is reserved for grains and other cultivated
vegetable products.
Wheat is cultivated on 67% of the land on which grain is cultivated. Although there is higher
domestic consumption potential in oily seeds, the production is inadequate; the most cultivated plant in oily seeds is the
sun flower. Turkey has an important position relating to a great number of fruits and vegetables; however, production
corresponds only 4% of the cultivated agricultural lands. In this report, production/consumption tables on product basis
are presented.
As it is in several sectors relating to the vegetable production, the livestock sector has various problems despite its
higher potential. The most important indicator is that the number of great cattle being 10.9 million and small cattle
being 51.2 million as of 2008 generally decrease within long years. It is apparent that this problem of long term supply
problem as well as excessive protectionism lie behind the meat crisis lastly arisen. It should be emphasized that the
poultry sector constitutes an exemption within this frame and according to the specialists, the level achieved in either
egg production or chicken meat production in this sector is not below the level of the developed countries.
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Upon an analysis of demand and supply as follows and as detailed with reference some developing businesses, the
future of the food industry seems more brilliant. As far as we determined, some of the business branches, which have
higher potential for the food industry, and are even on the rise in several aspects are as follows: Domestic and foreign
franchising, exportation to Syria, Iraq and Middle East Countries, organic food production and exportation (see. Box –
Turkey’s Organic Agricultural Profile); and brandization in production and distribution of take-home and frozen gourmet
food and large-scaled processed raw (mince, small pieces of meat, etc.) and done/salted red meat.
Southeast Anatolia Project (GAP), launched in 1980s, is the greatest public investment and regional development
project of the Republic history. When evaluated GAP in respect of energy generation being its primary target, its
considerable vonstributions are apparent. Total value of the energy generated by GAP exceeded 17 billion dollars; 9
hydro-electric power plants were completed as of the end of 2008; 5% of the energy need is started to be used from
these sources. Although important progresses were made also in investments such as transportation, organized
industrial zone construction etc., the two other targets of the projects; completion of the irrigation network and
conscious agriculture/industrialization could not be achieved effectively.
It is possible to summarize the benefits, types and other advantages in case of completion of GAP according to the most
reasonable scenario as follows: Upon completion of the irrigation network even partially, increase of annual production
amount in many products; and radical change of the interregional cultivation tissue; opening new markets in the
regions already abundantly exporting the Turkish agricultural products such as Iraq, Iran and Mersin Port as well as
Middle East or procurement of increases in shares in the existing markets; transformation of traditional pastures/small
livestock farming into large-scaled commercial enterprises and accordingly notable contribution to meat and milk
production; the possibility of use of almost all the lakes for fish farms and tourism; and the majority lands’ being
appropriate for organic agriculture.
The external factor, which would mostly be effective on the trade, production and rural development in the Turkish
agriculture, would be the Common Agricultural Policy (CAP) of the EU, as we assumed in the scenario of acceptance of
our EU membership. In the report, we firstly examined brief history, structure and the future form of the CAP.
Secondly, we summarized major conflict issues between Turkish agricultural policies and CAP. Lastly, while scanning
empirically the possible share to be set aside from the CAP budget, resulting in arise of one of the most important
economic anxieties within the context of Turkey’s EU membership, we searched for losses and possible benefits of
Turkey.
As a result, the full integration of Turkey with CAP would be painful; however, it would cause changes in agriculture,
which might be considered as radical. It is possible to compete domestically for the products which we fall far behind EU
in average productivity. From this perspective, social damage of harmonization with the CAP is ambiguous and the
opportunities to arise are missed.
In the report, we also touched on the issue of the World Trade Organization-Turkey. Even though it was hard to make
our determinations based on definite findings, we should state that as long as the Turkish agriculture keeps its
fragmented and less productive structure, it seems that our country might be damaged in various degrees by any and
all agricultural liberalization agreements particularly Doha. The livestock and milk products would lose market share on
a large scale; and oily seeds and other nutritional products would lose their market share at low-to-moderate intensity;
however, the competition and export possibilities would increase in the fruits, vegetables and the products special to
Turkey (such as dried grape, hazelnut etc.).
Naturally, in a scenario where reform efforts, not considered herein, gain speed, the losses might be prevented. For
instance, in our examinations, the contribution of the increased irrigation and enhancement projects- even if they are in
a slow progress - is not involved in the contribution projections. Even if Doha is signed today, the members will try to
achieve harmonization with the new regime within at least transition periods, each of which is 5 years. Within this
period of time, the minimum contribution of GAP, which we estimated, would alleviate the possible losses. Similarly,
14
reforms, training, land consolidation maintained by the Ministry of Agriculture and Rural Affairs as well as title deedcadaster operations run by other public organs as well as the productivity jump we supposed to arise in the Turkish
agriculture are not involved in the current study.
There seems a close relation between the lower added value procured by the agriculture and limited financing
opportunities - including foreign investment - provided to the agriculture. Though it is not correct to construe this
relation as a cause-consequence relation, we are of the opinion that the subject is somewhat parallel with the larger
macro-scaled researches establishing close statistical relation between financial development and economic growth.
From this perspective, the final chapter of our study is reserved for agricultural financing methods.
We hereby notice that the trend of financial investment in agriculture visibly increased in the long time; however, it
failed to considerably affect the volume of the agricultural production. Secondly, it is apparent that many agricultural
financing methods, rapidly multiplied in 2000’s, have not been applied in our country yet or the institutions applying
these methods have not made any investment. We introduced these new financing methods to the readers in our
report. Subsequently, we examined, by a few case analysis, contribution of these agricultural production and wealth in
the developing countries like us. Finally, we listed our suggestions for application of these methods to Turkey.
We are of the opinion that initiation and dissemination of Agricultural Investment Funds in Turkey is one of the ideal
instruments to attract both domestic and international investment in the agriculture, know-how and information
accumulation. We listed our rationales on this subject in the report. There are still many gaps (intersections), which the
State, financial system, micro-credit mechanisms and supranational institutions’ project credits could not reach.
However, it is required to eliminate several deficiencies and obstacles (particular definition of these types of funds in the
Capital Market Laws and Regulations, cadaster works still maintained and rapid completion of title deed renewal attempt
etc.) before the establishment and successful operation of the Agricultural Investment.
15
A. Macro Review
16
A. MACRO-REVIEW
A.1.
SHARE OF AGRICULTURE IN PRODUCTION: RECENT UPDATES AND
TRENDS
Share of agricultural sector, which constitutes approximately 25% of the Turkey’s employment, in nominal Gross
Domestic Product (GDP) being around 8% in 2009, remains quite lower than the employment rate.1 Under the light of
the recent GDP Data, it is noticed that the share of agricultural sector in total production did not rise up other than crisis
periods and unlike that it fell down2. Sharp falls particularly encountered in industrial sectors during crisis result in
temporary increase of the share of agriculture in total production. The share of agriculture, being 12.5% in nominal GDP
in 1998, recessed to 9.5% in 2004 and 8.2% in 2009. Rapid growth rates of the service sector and rapid increase in
price deflectors in recent years have become important developments limiting the share of agriculture in total
production.
Shares of Sectors in Nominal Gross Domestic Product (GDP) (%)
70
Agriculture
65
Industry
Services
60
55
50
45
40
35
30
25
20
15
10
5
0
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Reference: Turkish Statistics Institute
It is noticed that real production growth in agricultural sector remained quite lower than the growth rates of GDP,
industry and service sectors other than the crisis periods. Whereas the agricultural sector has grown up at an annual
average rate of 1.8% in 5 years duration in 2000-2004 and 1.9% in 2005-2009, GDP has grown up at an annual
average rate of 4.4% in the first period and 3.2% in the second period. As for the industry, it has grown up at an
annual average rate of 4.2% in the first period and 3.2% in the second period. Even though the decrease of share of
agriculture in total GDP is often encountered during the development of the countries in the long term, it would not be
incorrect that the slight growth of the agricultural production in real terms constitutes a problem for the agricultural
sector itself. One of the reasons is that the productivity in agriculture is considered quite lower as to be mentioned in
the following sections.
1
Although the share of agricultural sector of Turkey in the total production seems lower compared to the number of employees covered by this sector, it has
quite a higher rate than that of the European Union, the agricultural share of which is 2% in total production.
2 Even though it is not possible to compare the recent and previous national income statistics, we see that the agriculture’s share is around 17-18% compared
to the national income at the end of 1980s given the previous (dated back to 1987) GDP statistics.
17
Nevertheless, the other reasons may include inadequacy of agricultural support program, failure in adaptation to the
changing global circumstances and quite lower investments in the agriculture.
Growth Rates (%; annual)
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
-1
-2
-3
-4
-5
-6
-7
-8
-9
GDP
1999
2000
2001
Agriculture
2002
2003
2004
Industry
2005
2006
Services
2007
2008
2009
A.2.
PRODUCTIVITY IN AGRICULTURE
Structural problems of Turkey’s agriculture result in lower rates of productivity in agriculture. Upon consideration that
the productivity is the production per capita working in the relevant sector, it is reported that the agricultural sector is
relatively larger, given either the total economy or the industry and services. It is reported that a person working in the
agricultural sector in 2009 generated TRL 1,860 (in 1998 prices) and this figure is TRL 4,563 for GDP and TRL 6,133 for
industry.
Production per capita (TRL; inc. 1998 prices)
7,000
6,750
6,500
6,250
6,000
5,750
5,500
5,250
5,000
4,750
4,500
4,250
4,000
3,750
3,500
3,250
3,000
2,750
2,500
2,250
2,000
1,750
1,500
1,250
1,000
Agriculture
Industry
Services
GDP
2004
2005
2006
2007
2008
2009
Source: Turkish Statistics Institute, our calculations.
When we overlook the matter under the light of the data - we acquired - in a longer perspective, we see there is no
change within the elapsing years. Similarly, as it was in 2009, the production per capita in agriculture considerably
18
remains below the GDP per capita (on the fixed rate of USD) in 1998; therefore, we noticed it causes the GDP to fall
down.3
Sectoral Productivity: Production per Employment (1998 in USD)
30000
1998
2009
25000
20000
15000
10000
5000
0
Agriculture
Industry
Services
GDP
Reference: Turkish Statistics Institute, our calculations.
A.3.
LABOR FORCE AND LAND USED FOR AGRICULTURE
Turkey’s economy uses an important source in terms of labor force in agriculture. With 5.254 million persons, the
agricultural sector covers 24.7% of the total employment as of 2009. The steady decrease in the employees of the
agricultural sector, as of 1923, is directly related to the increasing mechanization in the sector and decreasing average
land sizes. However, in Turkey, there are other reasons for migration from rural areas to the urban, one of the most
important pushing factors of the social demography. Comparisons made with the western countries put forth that
Turkey has still a crowded population in the rural areas and the migrations to urban would continue in the following
years. Even if the rural population is held down by social measures, the dynamics of the growth would progress towards
the cities. In this perspective, it would be correct that the one of the most important problems in our economy is on-site
employment of the rural population efficiently.
However, the combined data which we formed by using the new and former employment series published by the
Turkish Statistics Institute (“TUİK”) indicate a significant fall in the agricultural employment after 2001. As for 20082009, the crisis years, it was noticed that the agricultural employment increased. Since we could not notice in our data
any attempt for opening the lands to agriculture, any investment run-up or any technical revolution, we are of the
opinion that this increase, arisen in each crisis period, is not a voluntary but an “obligatory” employment and that this
increase is not useful for agricultural productivity and would possibly cause more corruption in income distribution
either.
3 We should state that continuous revision of the employment series prevent us to form a long term sound perspective.
19
Number of persons employed in agriculture (thousand; combined data)
6,300
6,200
6,100
6,000
5,900
5,800
5,700
5,600
5,500
5,400
5,300
5,200
5,100
5,000
4,900
4,800
4,700
4,600
4,500
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Even if Turkey is a rich country in respect of agricultural areas, the constitution of the majority of the lands from small
sections in terms of property ownership makes it difficult to benefit from the economy of scale particularly in annual
arable crops and livestock. In Turkey, there existed cultivated agricultural land (including long life crops such as fruit
trees) of 24.5 million hectares as of 20084. 21.5 million hectares of these cultivated lands consist of the agricultural
lands where grains, vegetables are cultivated excluding long-life crops. It is reported that the size of the cultivated
agricultural lands recessed particularly in 2006-2008. In addition to migration from rural areas to the urban, increasing
in the rapid growth period, we are of the opinion that the drought, erosion and other climatic conditions have effective
role on this recession.
Total Cultivated Land (in thousands hectares)
28,000
27,500
27,000
26,500
26,000
25,500
25,000
24,500
24,000
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
4 Several land measures we used in our report are as follows: 1 decare = 1000 m2; 1 hectare = 10 decares = 10,000 m2; 100 hectares = 1 km2.
20
Whereas the share of the cultivated lands in the total agricultural lands was about 70% in 1990s, this rate decreased
down to 63% in 2008.
Share of the cultivated lands in the total agricultural lands (%)
70
69
68
67
66
65
64
63
62
61
60
59
58
57
56
55
54
53
52
51
50
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Source: Turkish Statistics Institute
AGRICULTURAL MAP OF TURKEY: PRODUCTS ON REGIONAL BASIS5
A.4.
According to the data of Food and Agriculture Organization (FAO) of the United Nations, whereas cow milk of 3 billion
dollars value has become the first in monetary value in the Turkey’s agricultural production listing as of 2007, this is
successively followed by wheat of 2.3 billion dollars value, tomato of 2 billion dollars value, grape of 1.7 billion dollars
value and cotton of 1.4 billion dollars value.
Leading Agricultural Products of Turkey (2007; million $)
3,000
2,800
2,600
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
Milk
Whe.
Toma. Grape Cott.
App
Egg
Pota.
Pepp. Sug. Oli
beet
Hazelnut
Reference: FAO
5 The products would be examined in details as follows (see Section C); in this section, only some of the important information is tried to be given.
21
Turkey is in the top lines in numerous agricultural product listings in the world. As of 2007, Turkey takes place as the
first country in the world listing of hazelnut, apricot, cherry and fig productions in terms of monetary value. In terms of
monetary value, the world listing of the agricultural products cultivated in Turkey is given below:
Turkey’s place in the global listing of several agricultural products (2007; on monetary value basis)
1.
Hazelnutt
Apricot
Cherry
Fig
2.
Melon
Leek
Cherry
3.
Pepper
Strawberry
Chestnut
Chickpea
Crown vetch
Lentil
Pistachio
Walnut
Bean
Spices
Milk
Cucember
Watermelon
Organic honey
4.
Apple
Spinach
Triticale
Tomato
Olive
Eggplant
5.
Green onion
Tea
Dry Onion
6.
Peach and Nectarine
Grape
Sugar beef
Mandarin
Rye
Source: FAO
The agricultural products, cultivated in Turkey, are shown on regional basis in the following map prepared by the
Ministry of Agriculture and Rural Affairs
Source: Ministry of Agriculture and Rural Affairs
22
A.5.
IMPORT AND EXPORT
While the agricultural sector generates production at lower rates compared to the number of the employees employed
in this sector, its share in the Turkey’s foreign trade is at lower rates as well. According to the classification of
operations of the foreign trade, whereas the share of the agricultural export in the total production is 4.4 – 4.5 billion
dollars as of 2009, the share of importation is 3.3% with 4.6 billion dollars. While the rate of the agricultural export to
meet the import is fluctuated, agricultural export and import interact in a balanced manner in 2009. When the years
2001 and 2009 are compared, it is reported that the rate of export of the agricultural products in the total exportation
recessed considerably (from 6.4% down to 4.4%); however, there is no significant change in importation.
Annual increase rates of agricultural import and export are similar. In both items, annual average rate of increase is
1.1% in 2005-2009.
On the other hand, when we include in this analysis the food and beverage, tobacco and tobacco products and animal
fats and vegetable oils produced in the production industry, it is noticed that this second group contributed to the
exportation considerably. Upon examination by the way so, it is reported that the share of agriculture/food industry
export in total exportation was 10.3% and in importation was 3.7% as of 2009. These figures may be enough to
maintain the opinion that Turkey is one of the few self-supporting countries; however, given that Brazil realized
exportation of 72 billion dollars and Poland realized exportation of 16 billion dollars in 2008, it should be asked whether
Turkey could achieve a better performance and it should be stated that there exists an important unrealized potential in
exportation.
23
Turkey’s Agricultural Products and Finished Products Foreign Trade (Million Dollars))
2000
27,775
Total export
3,520
Total agriculture and food industry export
2,891
Livestock and food substances
2
Livestock
13
Meat and meat products
22
Milk, milk products and eggs
89
Fish and other seafood
406
Grains and grain products
1,817
Fruits and Vegetables
239
Sugar, sugar products and honey .
140
Coffee, tea, cacao, spices and products
10
Food for animals
153
Various eatable products
529
Beverages and tobacco
37
Beverages
491
Tobacco and tobacco products
100
Animal,vegetable fats and oils, waxes
2
Animal liquid oils and solid fats
72
Prepared vegetable oil and solid fat
26
Processed liquid oils, solid fats; waxes
54,503
Total Import
1,899
Total agriculture and food industry import
1,159
Livestock and food substances
33
Livestock
2
Meat and meat products
37
Milk, milk products and eggs
37
Fish and Seafood
408
Grains, grain products
193
Fruits and vegetables
16
Sugar, sugar products and honey
124
Coffee, tea, cacao, spices and products
207
Food substances for animals
102
Various eatable products
365
Drinks and Tobacco
15
Drinks
351
Tobacco and tobacco products
Animal, vegetable liquid oils and solid fat; wax375
51
Animal liquid oil and solid fat
292
Prepared vegetable liquid oil and solid fat
33
Processed liquid oil, solid fat; waxes
2001
31,334
3,967
3,316
44
19
42
73
327
2,142
343
149
25
152
471
36
435
180
165
15
41,399
1,353
736
23
1
24
12
193
118
12
122
136
95
296
13
283
321
33
269
19
2002
36,059
3,642
3,118
31
17
35
121
299
2,062
183
172
13
185
426
41
385
98
3
76
19
51,554
1,689
1,056
16
39
19
392
142
20
156
144
127
218
10
208
415
49
337
29
2003
47,253
4,688
3,944
8
23
49
152
409
2,568
226
243
14
251
489
70
419
255
5
226
24
69,340
2,366
1,604
12
1
53
33
722
132
36
255
200
163
250
15
235
512
64
409
39
2004
2005
2006
2007
2008
2009
63,167 73,476 85,535 107,272 132,027 102,129
5,840
7,653
7,853
8,917 10,616 10,486
5,044
6,512
6,595
7,822
9,155
9,126
7
5
9
7
13
24
27
41
36
54
103
174
54
81
107
179
255
268
212
243
259
303
408
339
520
892
876
1,037
1,385
1,482
3,406
4,374
4,261
4,902
5,308
5,353
237
211
283
304
352
301
297
309
345
463
500
472
12
18
10
12
68
75
274
338
409
561
763
638
591
736
820
805
891
933
113
146
135
161
186
176
478
590
685
644
705
757
205
405
438
290
570
427
26
3
1
175
359
308
206
269
240
30
46
130
84
274
184
97,540 116,774 139,576 170,063 201,964 140,926
2,620
2,660
2,959
4,266
7,182
5,192
1,818
1,616
1,730
3,084
5,024
3,591
10
14
16
24
41
34
1
1
1
4
2
1
71
78
85
119
133
120
55
69
85
97
119
108
558
226
212
1,024
2,208
1,285
162
284
348
456
860
673
39
46
40
57
92
57
291
275
297
374
391
389
401
341
317
550
773
556
231
280
331
381
403
367
270
299
296
353
456
479
31
23
40
51
65
79
239
276
256
302
392
400
532
745
933
829
1,702
1,122
61
73
84
110
154
106
425
626
792
641
1,446
930
46
46
57
78
102
87
Source:Turkish Statistics Institute
Even though both the export and import generate higher sales on annual basis, the increase of the weight of the other
sectors on import and export results in recession (from 12.7% down to 10.3%) of the weight of the agriculture/food in
import and export compared to the year 2000, whereas the weight in import has no considerable change (from 3.5% up
to 3.7%). In 2009, Turkey realized agriculture/food export of 2 dollars value; however realized import of
agriculture/food of 1 dollar.
On product basis, Turkey exports hazelnut, dried fig, seedless dried grapes, pistachio, dried apricot, tobacco, olive oil,
cotton, leguminous seeds and fresh vegetables-fruits to many countries particularly the European Union countries,
Russian Federation and the USA. The imported agricultural products are particularly wheat, corn, rice, oily seeds and
cotton. (The Ministry of Agriculture and Rural Affairs, 2005).
24
25
B. Structural Compounds of the Turkish Agriculture
26
B. STRUCTURAL COMPOUNDS OF THE TURKISH AGRICULTURE
B.1.
DISTRIBUTION OF LANDS
One of the most important problems encountered in transition from extensive agriculture in vegetable production to
intensive agriculture by which highly efficient production is made as a result of use of intensive technology and input is
fragmentary and piecemeal nature of the land ownerships.
According to the legal status in Turkey, 3,076,650 farms hold total area of 184.3 million decares. Average land size for
these farms is 59.9 decares; this size is quite lower than the average farm size of Europe and USA, being successively
174 and 180 decares.6 Besides, whereas the number of the farms holding lands of below 100 decares constitutes 83.7%
of total number of farms, the share of the lands held by these farms is 42%. While the share of number of farms
holding lands larger than 500 decares in total number of farms is 0.7%, these farms hold 11.3% of the total area7.
Number of Agricultural Farms according to Size of the Farms
1 000 000
950 840
900 000
* Horizantal axis indicates the land size of
.
the farms in decares.
800 000
700 000
600 000
560 049
539 816
500 000
400 000
327 363
300 000
290 461
232 529
200 000
153 685
100 000
17 429
-5
59
1019
2049
5099
100199
200499
500999
4 199
222
10002499
25004999
57
5000+
Reference: Turkish Statistics Institute, Agricultural Count 2001
Legal arrangements have been maintained since the date of establishment of the Republic of Turkey to overcome such
hindrance to the productivity in agriculture. In this road, Land Reform Acts were enforced several times; however, these
could not help optimization of the status of the landless villagers. Upon enforcement of the draft law being evaluated at
the Prime Ministry during preparation of our report and aiming at preventing the land division for heritage, it becomes
possible that the average size of farm increases. Another development in this respect is the commencement of
preparations for a new structuring under the title of “Agricultural Land Acquisition Office” of the Ministry of Agriculture
and Rural Affairs. This study aims at gathering the agricultural lands by acquisition, sale and lease of the same by the
way of tender (For more detailed information, see. Section B.4).
6 The point to be paid attention when comparing with EU is that the land sizes may also significantly vary among the countries in EU. Eurostat data indicates
that average land sizes of the EU Countries and Turkey are extremely similar.
7 The data was gathered from the results of 2001 Households in Agricultural Counting and Farms of the Turkish Statistics Institute.
27
B.2.
USE OF TECHNOLOGY, MECHANIZATION AND INFORMATION
Outdated technology is used in majority of the farms in Turkey. Although use of technologies and know-how increases
in number in the farms, that the average size of farm is limited; that the breeders are hybridized in cattle breeding; and
that the cattle races could not be maintained are considered the factors slowing down the transition to the intensive
agriculture. There are exemptions of this matter in several sectors. For instance, the poultry sector heads the sectors,
closely following up the developments and the applicable techniques used in Europe and the USA.
In Turkey, there are 1,070,746 tractors and 13,804 harvesters as of 2008. Whereas the number of tractors regularly
increased by 1% each year as of 1989, the number of harvesters increased by 2.2% in a five years period in 20042008. Even though the increase in the number of harvesters is positive, 58.5% of these harvesters being over the age
of 10 as of 2008 is considered a disadvantage. Furthermore, use of 25% plows - used to plough the lands by benefiting
from animal power - indicates that the use of technology has still not been widespread adequately in small-sized farms
(Ministry of Agriculture and Rural Affairs, 2007)8.
'Change in Use of Tractors in Turkey in time (thousands)
1,090
1,070
1,050
1,030
1,010
990
970
950
930
910
890
870
850
830
810
790
770
750
730
710
690
670
650
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Number of Harvesters
Age Group
0-5
6 - 10
11- 20
20+
2002
11 539
1 213
2 125
3 526
4 675
2003
11 721
1 352
2 214
3 545
4 610
2004
11 519
1 430
2 298
3 489
4 302
2005
11 811
1 659
2 405
3 551
4 196
2006
12 359
2 036
2 598
3 596
4 129
2007
12 775
2 338
2 739
3 652
4 046
2008
13 084
2 558
2 873
3 657
3 996
Agriculture Statistics Summary
8 Statistics relating to other agricultural tools and machineries used in agriculture in Turkey are given in Additional Tables at the end of the report.
28
Although we do not consider a perfect indicator for making a comparison of productivity, we are of the opinion that it
would be useful to make an international comparison on the number of harvesters. Whereas Turkey is one jump ahead
of the world average and USA in respect of number of tractor per arable land of 1000 hectares, its rate is quite lower
than the EU average. However, we are of the opinion that this higher number is not an indicator for increasing the
productivity by using tractors. Upon consideration that the average size of the farms is 60 decares in Turkey and 180
decares in the USA, it is a fact that the abundance of the small-sized landed farms prevents efficient use of the tractors
owned. Though the grain production has a major role in Turkey, it is noticed that the number of harvester per 1000
hectares remains below the average of USA, EU and the World.
Number of Tractors and Harvesters per One Thousand Hectares
Tractors
Harvesters
Turkey
48.2
0.6
USA
25.8
2.0
European Union
85.1
6.3
Underdeveloped Countries
1.2
0.1
World
0.0
18.9
Source: FAO, our calculations
Besides use of machineries, use of fertilizers, resulting in high rate increases in productivity of vegetable production, is
fluctuating in Turkey. Particularly during crisis, use of chemical fertilizers recesses significantly; and another reason why
the use of fertilizers fails to reach the desired levels is dependency of the higher fertilizer prices on the energy prices.
Though it is difficult to access in updated data on use of chemicals, according to data of Directorate General of
Production Development (TUGEM), physical fertilizer consumption was 5,276 thousand tons by an increase of
approximately 28% in 2009. The relevant consumption was 4,129 thousand tons in 2008 after a recession by
approximately 20% compared to the previous year. On the other hand, in 2004-2008, it was reported that share of
phosphoric fertilizers in the total consumption, being 32% before, recessed down to 4.7% and share of nitrogenous
fertilizers, being 66% before, increased up to 93.4% in 2009.
Given the equivalent total, it is noticed that annual average consumption, being 10.1 million tons in 2003-2007, was 7.5
million tons in 2008 and 7.2 million tons in 2009. We have detected that sharp decrease of the share of phosphoric
fertilizers has a deep impact on this decrease occurred in recent years. (We are of the opinion that the assessment of
fertilizer consumption in equivalent total would enable better and sounder results in agricultural productivity.)
According to IPARD 2007-2013 Report, the consumption amount of fertilizer per hectare in agricultural lands in Turkey
as of 1999 is 67.8 kg Nitrogen, 28.9 kg Phosphor (P2O5) and 3.7 kg. Potassium (K2O). In Turkey, below the world
average in consumption of fertilizer per hectare; use of alternative fertilizers as a reaction to the increasing prices and
several farmers’ tending to crops not requiring fertilizers caused a noteworthy decrease in fertilizer consumption.
Besides the lower fertilizer consumption, unconscious use of fertilizers by the farmers constitutes an important obstacle
for achievement of the desired productivity. Thanks to meeting and discussing with several fertilizer producers, we have
determined that the farmers do not have adequate information and background on the soil-product types and use of
correct amount and timing for the fertilizers and apply the same according to the advises from hearsay instead of
scientific methods. We would also like to remind you that incorrect or excessive use of fertilizers might cause decrease
of the productivity as much as the inadequate use caused.
29
Whereas the total use of chemicals gradually increases year by year in Turkey, the use per hectare is still quite below
the rates of the European countries.
B.3.
ARABLE LANDS
We have not encountered a concrete reason for the decrease occurred in the cultivated lands in Turkey. That the
farmers, cultivating in small parcels, left the lands uncultivated and migrated to urban due to failure to earn living and
that the farmers, having alternative means of living, left the marginal productive lands uncultivated since these lands
are no longer productive due to input costs higher than the rates of Wholesale Price Index (TUFE) and Wholesale
Consumer Prices (TEFE) might have effective roles on this trend, even though we do not have related concrete data.
Prevention of erosion arising out of water and wind, which also have important effects on diminution of the size of the
arable land and decrease of the soil quality, would help protection of the size of the agricultural land. In Turkey, while
the land, exposed to water erosion, is about to be 67 million hectares (85% of the total lands), the land, exposed to
wind erosion, is only 0.3 million hectares. 36.4% of the total lands is exposed to serious erosion (abrasion of 25% of
the surface and soffit of the land) and 22.3% of the total lands is exposed to severe erosion with the abrasion of 22.3%
of the surface of the land and %25-75 of the soffit of the land.
Rough and hilly nature of Turkish lands, irregular and fluctuated rainfalls and intensity of the rainfalls, superficial soil
profile depth, lower rate of organic substances in the soil and natural disasters such as forest fires are the major
reasons of the erosion in Turkey. On the other hand, misuse of the lands also causes problems. These are unconscious
annihilation of the forests, excessive pasturage and mismanagement of the arable lands (such as incorrect plough of the
land) (Ministry of Agriculture and Rural Affairs, 2007).
That the water resources in several lands become unusable any longer due to instability of the rainfalls appears as a
factor, which may cause drought and adversely affect the arable nature of the land by the way so. With the effects of
the global warming, this situation particularly turned out to be a more severe threat.
B.4.
INTEGRATION OF AGRICULTURAL LANDS
One of the factors causing the size of the farms to be as such limited is the Heritage Act. Sharing the inherited lands
between inheritors results in fragmentation of the lands and constitutes one of the obstacles for transition to the
intensive agriculture enabling higher productivity. Access in only 85% of the lands by cadastral works, limited coverage
during the title deed renewal process (Source: http://www.tarim.gov.tr/Files/sanal_kutuphane/UlusalPr/486.html)
creates significant ambiguities on land ownership. This deficiency might - perhaps - become a factor deferring arise of
large-scaled farms created by free market mechanisms in time besides prevention of effective operation of the
agricultural land market. Ownership problem causes use of the agricultural lands as guarantee and makes it difficult to
access in the credit market and keeps many agricultural fixed capital investments below the optimal level.
As mentioned above, a draft law, which may possibly alleviate the land size problem in vegetable production if applied
effectively, is nowadays awaited at the Prime Ministry. The draft issued by the Ministry of Agriculture stipulates transfer
of the farm or land, subject matter of the heritage, to family assets partnership or company to be established by
agreement of the inheritors. It is planned that in case of failure by the inheritors to reach an agreement, the judge
would transfer the land to the inheritor specialized on agriculture at a fair value and without dividing; however, in case
of inheritors more than one - specialized on agriculture -, the judge would decide according to the offers made by the
inheritors. The draft law also enables the inheritor, acquiring the inherited land, to use easier credit from the State in
case of failure to pay the shares of the other inheritors (NTVMSNBC.com, 09.03.2010).
Article 17 of Land Protection and Utilization Act, entered into force in 2005, establishes principles of land consolidation
and distribution. According to the relevant article;
30
“For the purpose of determining parcel sizes in optimum measures in order to ensure rational use of the land,
upon the consent of the owners of more than the half of the lands and more than half of the owners of the
land, upon request; and upon the request of the Ministry or its committee, by observing the public benefit, on
non-discretionary basis; a land consolidation project field is determined and applied upon the Council of
Ministers’ Decree. This Council of Ministers’ Decree is considered a decree for the public benefit in respect of
consolidation and other transactions. As a result of this decree, upon request or without the agreement of the
owners, land consolidation on project basis, village development and land development services and rural
arrangements are carried out by the Ministry or caused by the Ministry to be carried out by the others.”
We are of the opinion that efficient application of the Agricultural Land Acquisition Office Project of Ministry of
Agriculture and Rural Affairs would be an important step for increasing the sizes of the farms. Aims of the aforesaid
Office are as follows: (Referans Newspaper, 30.03.2010):
• To regulate acquisition, sale, sharecropping, partnership, leasing transactions of the agricultural lands.
• To inform buyers, sellers, lessees, partners, sharecroppers and associate the parties with each other.
• To evaluate treasury lands, left and unused agricultural lands.
• To consolidate the undersize farms under appropriate organizations and to ensure arise of larger consolidated sizes.
• To work as “Real Properties Exchange, as limited to these kinds of agricultural lands.
• To sell lands, when necessary.
• To lease agricultural lands of the real persons and legal entities for and on behalf of the same; to ensure operation
of the same by the sharecroppers and sell the same.
B.5.
DRY AND IRRIGATED FARMING
In Turkey, as of 2007, 5.2 million hectares (24%) of 21.9 million hectares arable lands are irrigated agricultural lands.
According to the data of the Turkish Statistics Institute, while this rate is 72.7% for vegetable and flower growing, the
rate for the fruits and other long life plants is 25.8%.
Irrigated and Non-irrigated Land Sizes according to Use of the Land (%)
Use of the Lands
Total
Irrigated Land
Non-irrigated Land
Total lands
100
24
76
Cultivated agricultural lands
100
28
72
Vegetable and flower gardens (inc seedbeds and greenhouse)
100
73
27
Fruits and other long-life plants and beverages and spices
Lands (inc. seedbeeds and greenhouse plants)
100
26
74
Poplar groves-Willow groves
100
58
42
Lands, appropriate for agriculture but unused
100
7
93
Permanent pasture lands
100
35
65
Other Lands*
100
-
100
*Other lands include fallows, pasturages, grove woods and inappropriate land.s
31
Availability and stability of water resources in the agricultural lands gain importance in respect of selection of products
and irrigation methods applicable in the agriculture. In Turkey, in 1995-2005, higher increase of use of underground
and aboveground waters at 33% indicates that in the following years, problem of satisfaction of the water demand
would arise together with the population increase. Diminishing of water resources in several regions due to global
climate changes and intensification of the water utilization in agriculture are considered other factors increasing the
pressures on the water resources. In Turkey, the land that can economically be irrigated is 8.5 million hectares. The
irrigated lands were expanded up to 4.9 million hectares as of January 2005; 762 thousand hectares of which could not
be irrigated adequately. According to IPARD 2007-2013 report, whereas there is no definite data regarding water
consumption per product and for total irrigation, given that the average consumption is 5000 m3/ha, it is estimated
that annual water consumption is roughly 24.5 billion m3.
Konya is on the top of the list with its irrigated lands of more than 400 thousand hectares in Turkey. Adana and
Sanlıurfa follow Konya with their irrigated lands of larger than 200 thousand hectares. Bingol (67.3%), Igdr (59%),
Hatay (53.5%), Osmaniye (51.6%) and Hakkari (50.7%) are on the top of the list in respect of the rate of irrigated
lands in the total agricultural lands (Ministry of Agriculture and Rural Affairs, 2007).
Use of methods such as drip irrigation and sprinkling would increase the size of the irrigated agricultural lands and - by
the way so - enable arise of new opportunities for the lands on which alternative products cannot be cultivated.
Principal advantages of drip irrigation are possibility of irrigation even in case of lower pressures; lack of nutritional
losses in water since it does not cause flow or leakage on the surface; the possibility of irrigation with water the salt
rate of which is higher; prevention of growth of weed; application of fertilization and disinfestations at the same time
(productivity increases, cost decreases), prevention of erosion and soil loss; and easy application in slopped lands
(Referans Newspaper, 05.07.2008). Based on the experiences, modern irrigation systems - particularly drip irrigation
and sprinkling - ensure 50% saving and 20% efficiency increase in agriculture. In Turkey, only 6% of the agricultural
land around 8.5 million hectares, which is able to be irrigated, is irrigated by the dripping system.
By opening a parenthesis in this section, we would like to make a brief summary of the findings on the soil structure. In
Turkey, whereas Leptosol is the most common soil sort, Calcisol, Fluvisol, Cambisol, Vertisol, Kastanozem, Regosol,
Arenosol and Alfisol are the other soil types encountered.
Soil profile depth is a parameter as important as the type of the soil. In Turkey, excluding soilless lands and
waterlogged lands, the lands with profile depth of more than 90 cm constitute 15.2% of the total square measure. This
refers to a land of around 11 million hectares. Whereas the rate of soil lands of medium depth (50-90 cm) is 12.7%, the
rate of soil lands of shallow depth (20-50 cm) and of very shallow depth (0-20 cm) constitute 72.1% of the total lands.
According to land use capacity classification (LUCC) between 1-8 classes, there are three categories in Turkey and the
first category is between 1st and 4th classes. This category is appropriate for cultivation and livestock. The second
category (5thc class– 7th class) is not appropriate for cultivation; however, appropriate for forestry and controlled
sponging. The third category that is the 8th class can in no case be used for agriculture and livestock. LUCC 1 Class,
which enables higher production capacity in Turkey, covers a land of nearly 5 million hectares. The partially productive
land (LUCC 2 and 3) is around 14.1 million hectares. As for LUCC 4, being marginally productive; it is around 7.4 million
hectares (the Ministry of Agriculture and Rural Affairs, 2007).
B.6.
LIVESTOCK AND FISHERIES
Like the dominance of the small-size farms preventing vegetable-agricultural productivity, that the number of the great
and small cattle is lower in the livestock farms is a factor hindering increase of the productivity. According to 2001
agricultural count; while 59.7% of the farms of great cattle breeding has great cattle less than 5, the rate of the farms
owning great cattle less than 20 is 93.8%, being quite higher.
32
Distribution of the Farms According to the Number of Cattle
(%)
65
59.67
60
*Horizontal axis indicates the number
.
of animals owned by the farms.
55
50
45
40
35
30
25
21.32
20
12.79
15
10
5.45
5
0.72
0.04
0.01
50-149
150-299
300 +
0
1-4
5-9
10-19
20-49
Whereas the situation in the small cattle breeding farms is not different, respective lowness of the small cattle prices
only indicate the figures higher compared to the cattle breeding. Whereas the total rate of farms, owning less than 50
small cattle is 71.81%, the number of the animals owned by these farms constitutes 24.3% of total number of small
cattle.
40
Distribution of the Farms According to the Number of Sheep
(%)
35
* Horizontal axis indicates the number
of animals owned by the farms.
.
30
25.31
25
21.06
20
18.56
17.19
15
10.79
10
5.57
5
1.53
0
1-4
5-9
10-19
20-49
50-149
150-299
300 +
As of 2008, in comparisons in terms of red meat and milk productivity, serious problems are reported in Turkey. It is a
fact that Turkey falls far behind the USA and EU in respect of beef. The productivity for Turkey is 1816 Hg/An, and the
productivity for USA and EU is successively 3545 Hg/An and 2772 Hg/An. These data are the indicators that there are a
lot of things to do to increase beef productivity in Turkey and in case of achievement of the same, the related sector
would get higher profits. As for the cow milk, the case is similar. The milk productivity in EU (61070 Hg/An) is more
33
than 2 times and the milk productivity in the USA (93428 Hg/An) is more than 3 times higher than Turkey (27584
Hg/An). As for the mutton productivity, Turkey (158 Hg/An) being at nearly the same level with EU (148 Hg/An), falls
far behind the USA (313 Hg/An).9
The poultry sector, the importance of which was increased in recent years, secured its position in the livestock sector.
In this sector, besides particularly broiler hen production increased considerably in the last years, the sector seems to
have higher export potential in case it overjumps the quotation obstacles and meets the health/hygiene standards of
the importing countries. One of the most important risks, which the sector encounters, is the risk of epidemic disease.
Avian Influenza epidemic in 2005-2007 had a deep negative impact on the demand and interrupted the growth of the
sector. Nevertheless, poultry is the closest sector to the Western standards in terms of livestock for food productivity.
In concrete figures, poultry sector with 1,760 Gr/An, approaches the USA (1,838 Gr/An) and exceeds EU (1,502 Gr/An)
in terms of chicken productivity.10
As for the egg productivity, Turkey (137.403 100Mg/An) has a better position compared to the world average (97.191
100Mg/An); however, it is quite below EU (144.812 100Mg/An) and the USA (156.145 100Mg/An) average.
We can classify under three categories the fisheries sector, failed to be developed adequately although the water
resources in Turkey are abundant: Fishable seafood and fresh water products and culture fishing. Dependence on the
natural conditions in fishing sea and fresh water products is noticed as a factor preventing considerable increases in
product amount. The culture fishing increases its share in the fisheries sector with higher rates increases in production
year by year. We would handle in more details the food for livestock and fisheries in the further sections of this report.
B.7.
AGRICULTURAL SUPPORT SYSTEM
Liberalization of industrial goods trade was completed on a large scale in 1990s; however, a similar reform has not
occurred in the agricultural sector and the excessively protective structure largely continued as well11. Although total
support level in Turkey has fluctuated in time, it is apparent that the support of the agriculture is at the highest level
from among OECD/EU countries with the GDP rate.12
Total Support Estimate /Total Agricultural Products Consumption (%)
50
45
40
35
30
25
20
15
10
5
0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
9 Productivity/Carcass weight is measured.
10 Productivity/Carcass weight is measured.
11 See Cakmak (2010) for comprehensive and updated evaluation of agricultural policy frame and supports applicable in Turkey
12 We use herein “Total Support Estimate” figures produced for methodology of OECD. These figures consist of three compounds: general services, R&D etc and
consumer support. See Agricultural Policies in OECD Countries: Monitoring and Evaluation 2009
34
Reference: OECD.
As a reflection of that the share of agricultural sector in the national income is higher in Turkey, we notice that
compared to the agricultural production, Turkey approaches OECD average.
Producers Support Estimate according to Countries
(in Proportion with the Gross Revenue Rate)
80
70
1986-88
2006-08
60
50
40
30
20
10
0
Australia
USA
Mexico Canada
OECD
EU
Japan
Iceland
Switz.
Korea
Norway
Turkey
Reference: OECD
Total Support Estimate Acc. to Countries
(compared to the GDP)
10
9
Korea
1986-88
2006-08
8
7
6
Island
5
Swii
4
Norway
Turkey
3
EU
OECD
Mexico
Japan
Canada
2
USA
New Z.
Austr.
1
0
Reference: OECD
In parallel with the OECD countries, the supports provided with the “producers” also constitute the largest share in our
country. However, this distribution in our country is on product basis and supports the market prices. For instance, in
2008, total support is about TRL 22 billion; TRL 21 billion of which is for manufacturers support; and TRL 15 billion of
which is for market price support. The major product, the price of which is supported, is the grain. Amounts of support
and details of products are given in the following two tables. It should be stated that the reason why the market price
support is so high is the intense protectionism, which would not make various sub-sectors feel the foreign competition.13
13 However, the support system and irregularities of the production system arising out of the problems in the east as well as this kind of closeness lie behind the increase in the meat
prices recently. Turkey has imposed 225% customs duty to the red meat and prohibited importation of meat since 1994.
35
OECD: Agriculture Support Estimations in Turkey
(Million TRL)
198688
2006-08
2006
2007
2008p
Total Value of Production (exit from producer)
Market price supported products (%)
Total Value of Consumption (exit from producer)
Producer Support Estimation (PSE)
18
57
15
3
75,265
58
70,005
17,241
70,234
58
58,615
15,146
75,150
58
68,012
15,348
80,410
58
83,389
21,231
Production Amount Basis Support 1/
2
13,081
11,116
11,116
17,111
2
0
11,242
1,839
9,393
1,723
9,182
1,834
15,152
1,959
1
1,302
1,269
1,342
1,296
A/An/R/I basis Payment System (production required) 2/
0
A/An/R/I basis Payment System (production not required)
2/
0
1,035
71
1,348
1,685
1,824
2,690
1,642
1,139
0
1,575
2,552
798
Consumer Support Estimation (CSE)
-2
-10,189
-8,663
-6,851
1,134
15,052
Total Support Estimation (TSE)
Transfer from consumer
Transfer from tax payer
Budget income
3
2
1
0
18,816
10,750
7,517
549
17,697
9,164
7,639
895
16,146
7,362
8,458
327
22,604
15,725
6,453
426
Market price support
Production support
Input Basis Support
General
Service
promotion etc.)
Support
(GSSE)
(research,
TSE (GDP rate, %)
Source: OECD, PSE/CSE database, 2009
1/ Market price basis supported products. These products are: Wheat, corn, other grains, oily seeds, sugar,
potato, tomato, grape, apple, cooton, tobacco, milk, meat, chicken and egg.
2/ A (arable land), An(Animal), R (revenue), I (Income)
36
Producer Support Composition (Million TRL)
Producer Support Estimate (PSE)
Support Based on Product Output
A1. Market Price Support (MPS)
Wheat
Corn
Barley
Sugar
Sun flower
Milk
Beef
Mutton
Poltry meat
Egg
Apple
Cotton
Grape
Potato
Tobacco
Tomato
Other MPS
A2. Payments based on output
Cotton Premium
Milk Incentive Premium
Beef Incentive Premium
Mutton Incentive Premium
Poultry Incentive Premium
Tea leaf premium
Sunflower premium
Soy bean premium
Colza premium
Corn premium
Wheat premium
Barley premium
Rye premium
Oat premium
Rice land premium
Olive oil premium
Angora premium
Bombyx mori
Acrylic Premium
Tobacco premium
2003
2004
16.132,20
13.335,99
13.027,26
2.142,28
303,31
379,06
702,49
41,41
1.214,09
1.814,78
168,90
400,95
21,86
-17,96
-725,10
621,70
887,37
27,12
198,87
4.846,11
16.320,25
13.377,21
12.883,77
1.255,47
368,42
573,83
872,01
48,75
1.673,78
1.748,55
21,90
746,17
359,19
190,30
-1.196,13
1.260,07
1.034,70
9,71
-913,54
4.830,58
174,00
38,19
0,00
0,00
0,00
0,00
71,91
9,56
0,15
0,00
0,00
0,00
0,00
0,00
0,00
12,69
0,87
1,24
0,13
0,00
223,80
64,97
87,12
0,00
0,00
40,13
68,85
5,79
0,62
0,00
0,00
0,00
0,00
0,00
0,00
0,00
0,98
1,18
0,00
0,00
2005
16.763,93
13.825,10
12.746,88
1.859,09
343,43
721,73
807,64
76,19
1.326,60
1.719,11
121,14
763,87
346,67
786,06
-725,25
249,65
1.026,32
124,38
-2.048,76
5.249,00
457,05
116,03
56,73
0,00
0,00
69,23
107,37
2,42
0,38
57,32
185,17
20,90
0,21
0,21
2,51
0,00
1,26
1,44
0,00
0,00
2006
15.145,60
11.116,08
9.393,31
1.081,42
509,23
482,87
306,70
70,74
1.213,57
1.656,82
279,68
419,33
269,53
786,10
-1.141,12
1.090,92
1.104,21
-48,87
-2.612,15
3.924,32
565,81
161,52
0,09
0,00
0,00
81,92
165,30
3,67
0,09
191,40
471,52
53,32
0,48
0,22
27,45
0,00
0,00
0,00
0,00
0,00
2007
15.348,19
11.015,68
9.181,78
1.470,89
482,24
-71,40
616,54
45,51
-29,51
1.330,27
320,99
593,67
103,97
1.044,12
-759,32
1.524,60
1.060,77
-57,85
-2.329,67
3.835,96
827,90
177,49
0,94
0,00
0,00
88,24
203,11
8,35
1,19
209,37
300,47
0,00
0,00
0,00
10,00
6,84
0,00
0,00
0,00
0,00
2008
21.230,69
17.110,94
15.151,67
4.446,76
153,82
409,43
773,98
55,69
-261,80
1.609,06
349,66
673,47
589,24
936,61
-678,77
505,68
1.173,42
-21,78
-1.892,85
6.330,05
682,50
310,25
1,21
0,00
0,00
102,09
114,58
0,00
0,00
71,41
673,14
0,00
0,00
0,00
0,00
2,78
0,00
1,31
0,00
0,00
Reference: OECD
The most important reform trial in the form of agricultural support has been realized within the framework of
Agriculture Reform Application Project supported by IMF/World Bank in 2000-2001; it was tried to start Direct Income
Support Policy. It is noticed that these institutionally positive policies, directly aiming at creating product diversity and
preventing excessive governmental expenses in specific product categories, accordingly preventing the waste, were
started to be left for either political or technical reasons in recent years. However, the Direct Income Support Policy was
officially ended in 2009.14
14 See. Cakmak (2010)
37
Direct Income Support/Total Producers Support (%)
26
24
22
20
18
16
14
12
10
8
6
4
2
0
2002
2003
2004
2005
2006
2007
2008
Reference: OECD
Consequently, it is apparent that the field where the reform need is quite obvious seems the agricultural supports. Even
though several progresses are made in terms of transparency on the financial side, we have encountered a structure,
not changed so much in time in respect of productivity and general costs. In this sense, return to the former structure
from the Direct Income Support policies is considered negative by the specialists, particularly OECD. Besides, they also
consider that the factors such as economy of scale as well as the agricultural support policies are the basic reasons for
unproductiveness in the agricultural sector in Turkey.
38
39
C. Major Products
40
C. MAJOR PRODUCTS
C.1.
C.1.1.
VEGETABLE PRODUCTION
Grains and Other Vegetable Products
Grain production has an important role in agriculture of Turkey. As of 2008, 76.4% of the cultivated agricultural lands of
21,555 million hectares, excluding long-life plants, is reserved for grains and other cultivated vegetable products.
Approximately 60% of the total land is reserved for only the grains (Cakmak, 2008). Grain production is made in 67%
of the land on which grain is cultivated. While the wheat, the most cultivated grain in Turkey, may be cultivated in
anywhere else in Turkey, the lands on which other grains such as corn, barley and rice as well as wheat constitute 98%
of the total grain in respect of land and distribution.
Grains and Other Vegetable Products (2007-2008 Market Year)
Product
Grain (Total)
Barley
Wheat (Total)
Wheat (Other)
Wheat (Hard)
Corn
Oat
Rye
Other Grains
Rice
Potato
Legume (Total)
Dry beans
Red lentils
Chickpea
Green Lentils
Sunflower
Cannabis
Linen
Colza
Cotton
Soybean
Sugar
Sugar beet
Produ.
(Thou.
Tons)
Usable Pro
Import
(Thou.
(Tho.
Tons)
Tons)
28 609
7 307
17 234
14 525
2 709
3 535
189
241
104
389
4 246
1 265
154
508
505
27
854
...
...
29
1 321
31
.
.
27 110
6 868
16 286
13 726
2 560
3 429
188
237
102
385
4 174
1 242
153
495
499
26
848
...
...
28
1 294
30
1 708
12 415
4 244
199
2 512
2 479
33
1 143
16
16
2
236
55
149
65
44
9
27
1 475
...
...
316
36
1 465
34
15
Domestic
Consum
Use (Thou. (Thou.
Ton)
Tons)
28 630
7 058
16 882
14 646
2 236
4 211
203
252
103
637
3 992
1 159
215
407
412
52
2 213
...
...
336
1 295
1 462
1 746
12 429
15 734
69
14 584
12 746
1 838
1 026
90
43
613
3 488
1 022
199
368
342
48
2 161
...
...
329
1 213
946
1 720
.
Use as seed
(Thou.
Tons)
Export
(Thou.
Tons)
Per capita
cons (kg)
2 199
686
1 458
1 214
244
14
11
24
7
11
384
108
11
29
60
3
2 119
10
1 819
1 461
357
93
222.9
1.0
206.6
180.6
26.0
14.5
1.3
0.6
-1.0
8.7
49.4
14.5
2.8
5.2
4.8
0.7
94.7
97.3
96.5
93.7
114.5
81.4
92.5
94.1
99.0
60.5
104.6
107.2
70.9
121.6
121.0
50.0
8
...
...
206
...
...
14
29
39
151
0
30.6
...
...
4.7
17.2
13.4
24.4
.
38.3
...
...
8.4
99.9
2.1
97.8
99.9
21
1
.
.
1
1
21
237
232
2
132
95
1
Adequacy
Degree (%)
Reference: Turkish Statistic Institute
Whereas the wheat production constitutes 61% of the grain production, the wheat is followed by corn and barley
successively at the rates of 20% and 15%. Given that corn, having 15% share in total production, is cultivated on the
5% of the grain land, it is apparent that the corn is more productive than the wheat and barley. When we measure the
productivity per decare, it is seen that whereas corn productivity has considerably increased, the productivity of wheat
and barley has no considerable change in 1988-2008. It is reported that the productivity of corn is procured by the use
of hybrid seeds (Cakmak, 2008).
41
Productivity in Major Grains
750
725
700
675
650
625
600
575
550
525
500
475
450
425
400
375
350
325
300
275
250
225
200
175
150
125
100
Wheat
Barley
Corn
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
According to OECD-FAO Agricultural Outlook (2009-2018) Report, net important country position of Turkey for the
wheat that is the most cultivated grain in Turkey, would go on and the rate of production’s meeting the domestic
consumption until 2018 would be close to 95%. In 2010-2018, an annual increase of approximate rate of 1% is
estimated. Similarly, any considerable change is not anticipated in consumption per capita. For these reasons,
apparently, there exists no positive potential in wheat production. We are of the opinion that the corn being productive
compared to the wheat has a higher potential upon consideration of its expanded area of use as sweetener.
Wheat Pro. per Capita and Wheat Pro. Productivity Projection
2.25
196.0
2.20
195.5
2.15
195.0
2.10
194.5
2.05
194.0
2.00
1.95
193.5
1.90
193.0
1.85
Consumption per capita (kg/year; left axis)
192.5
1.80
Productivity (ton/hectares; right axis)
192.0
1.75
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Reference: OECD-FAO Agricultural Outlook (2009-2018) Report
Other than the grains, legumes as well as the oily seeds might be overviewed under this title. Cultivation of legume
consists of horse bean, pea, chickpea, bean, lentil, cowpea, crown vetch, greek clover and grasspea. Chickpea, lentil
and bean rank among the top tree in the listing of land and production amount as of 2008. Out of the total legume land,
52% is reserved for the chickpea; 33% for lentil; and 10% for the bean. In terms of the product share, these rates of
successively 61%, 15% and 18%.
42
Upon examination of these major legume in respect of productivity, while a gradual increase is noticed in bean as of the
mid of 90s, the productivity of the chickpea remains stable. As for the productivity of lentil, a fluctuation is noticed. In
brief, the problem of productivity in agriculture of Turkey is also felt in the legume.
Productivity in Legume (kg/decares)
170
165
160
155
150
145
140
135
130
125
120
115
110
105
100
95
90
85
80
75
70
65
60
55
50
45
40
35
30
Chickpea
Bean
Lentil
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Although there is a higher domestic consumption potential in oily seeds, the production is inadequate. The most
cultivated plant among the oily seeds is the sunflower. As of 2008, the sunflower production covers 86% of the total
cultivated land of oily seeds. The sun flower, cultivated in a land of 5.8 decares as of 2008, might be used for both oil
and appetizer productions. Sunflower production corresponds to 43% of the total oily seed production. Other produced
oily seed products consist of cotton seeds, colza (canola), peanut, soybean, sesame, linseed, semen cannabis, poppy
seed and safflower.
Even though the climate and soil structure of Turkey provide convenient conditions for production of the oily seed
plants, the existing production fails to meet the domestic demand. According to OECD-FAO data, only 49% of the
vegetable oil consumption is satisfied from domestic production as of 2008. According to OECD-FAO projections, it is
anticipated that the consumption per capita, being annual 19.2 liters in 2008, would become 22.1 liters in 2018 (by an
annual average increase rate of 1.4%). These data indicate that in case production is made to the extent that it might
compete with the imported products, the vegetable oil sector would be a remarkable field. However, the projections
indicate and support the fact that the coverage ratio of consumption by production in eatable vegetable oils in 20102018 would remain about 50%. According to the estimations, Turkish economy would increase its net import, estimated
to be 767 thousand tons in 2010, up to 888 thousand tons until 2018. It is expected that the consumption per capita
would increase by an annual average rate of 1.4%.
43
Eatable Oil Projection
23.0
54
Production per capital
22.5
53
Rate of coverage of consumption by production
;
22.0
52
21.5
21.0
51
Left axis; kg/year
20.5
right axis;%
50
20.0
49
19.5
19.0
48
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Another consumption alternative for oily seed plants, commonly used as nutrition and animal feed, is the biodiesel
production. Higher petroleum prices and demand for eatable energy constitute a serious potential for biodiesel
production and accordingly oily seed plants. Though biodiesel consumption projections set forth in the OECD-FAO
Agricultural Outlook (2009-2018) remain quite lower, the average consumption growth of 16.3% in 2010-2014 indicate
that the produced oily seeds might be evaluated in this new field.
Biodiesel Consumption Projection (thousand tons)
115
110
105
100
95
90
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
C.1.2.
Industrial Crops
Raw plants classified as products used in textile are cotton, linen and cannabis. As of 2008, the cotton production
covers nearly 100% of the production in this group; however production of linen and cannabis fibers is extremely rare.
As of 2008, cotton fibers of 673.4 thousand tons were produced in a total land of 4 million 950 thousand decares. An
increase was noticed in the cotton fiber production starting from 1990 until a few years ago.
44
Cotton fiber productivity (kg/decares)
170
165
160
155
150
145
140
135
130
125
120
115
110
105
100
95
90
85
1991
1993
1995
1997
1999
2001
2003
2005
2007
C.1.3.
Vegetables and Fruits
Turkey has progressed well in production of various vegetables and fruits. As of 2008, vegetable production is made in
a total land of 836 thousand hectares. This figure corresponds 4% of the total cultivated agricultural lands. The amount
of vegetables produced in Turkey in 2007/2008 market year was 23.7 million tons. Successively, tomato, watermelon,
onion, pepper, cucumber and melon are the most cultivated products in respect of weight. (As of 2007/2008 market
year, tomato corresponds 42% of the total vegetable-fruit amount.) The major vegetable products cultivated in Turkey
other than the afore-listed products are eggplant, carrot, cabbage, green beans, lettuce, marrow, spinach, leek, scallion
and turnips. Additionally, green peas, horse beans, hibiscus, garlic and purslane are the other cultivated products;
however not produced as much as the aforesaid products.
As for vegetable products, Turkey’s production excessively covers the domestic consumption. Degree of adequacy
defined as the proportion of domestic use to the usable production is noticed to be close to 100% for garlic and green
beans and higher than 100% for the other vegetable products. This rate is 111.15% for tomato.
Whereas Turkey has been exporting considerable amounts of vegetable to the European Union, Middle East,
Commonwealth of Independent States and Eastern European Countries, it realizes importation of fewer amounts in
order to satisfy the out-of-session needs and to meet the needs of the food industry.
Primary products in respect of production of fruits, hard-shells and beverage plants are the grapes, apples and oranges.
These products are followed successively by tea, mandarin and lemon. Pistachio, peer, boobs, almond, walnut,
strawberry, berry, plum, hazelnut, grapefruit, fig, apricot, chestnut, cherry, banana, pomegranate, peach, bitter orange
and sour cherry are the other products. The rate of adequacy is higher than 100% for almost all these products. The
rate of adequacy of banana as of the market year 2007-2008 is 43.7%, being a lower rate. This rate is 993% for
hazelnut, 572% for fig, 802% for apricot and 833% for grapefruit. Turkey exports these products at quite higher rates
compared to the domestic consumption.
Turkey ranks among the top one in respect of production of hazelnut, cherry and apricot successively with the rates of
76.1%, 18% and 20.6 %.
45
Fruits, Stone Fruits and Beverage Plant Data (2007-2008 Market Year)
Product
Production
(Tons)
Usable
Pro (Ton)
Import
(Ton)
Domestic
use
(Ton)
Consumpt.
(Ton)
Export
(Ton)
Export-EU 27
(Ton)
Per Capita
consump (kg)
Adequacy
degree (%)
73 416
71 581
43
67 943
65 225
2 988
2 012
0.92
105.4
Peer
356 281
338 111
2 714
327 885
301 654
12 940
4 857
4.27
103.1
Boob
95 015
89 314
18
84 853
78 064
4 479
3 364
1.11
105.3
Almond
50 573
49 839
10 130
53 316
52 250
6 653
1 134
0.74
93.5
Walnut
172 572
168 430
39 572
205 087
200 165
2 915
871
2.84
82.1
1 145 321
973 523
17 022
978 526
949 170
12 019
7 765
13.45
99.5
117.0
Pistachio
Tea
250 316
243 307
183
207 982
191 343
35 508
20 212
2.71
Berry
61 665
56 732
469
56 373
51 863
828
490
0.73
100.6
Apple
2 457 845
2 330 037
32 430
1 996 745
1 837 005
365 722
298 094
26.02
116.7
Plum
240 874
204 020
724
196 040
180 357
8 704
6 237
2.56
104.1
Hazelnut
530 000
525 230
7 462
52 884
51 297
415 636
328 314
0.73
993.2
Grapefruit
162 621
159 043
6 593
19 103
17 575
146 533
84 153
0.25
832.6
Fig
210 152
205 529
6 489
35 927
33 053
176 035
122 665
0.47
572.1
Apricot
589 732
564 963
3 812
70 432
64 797
513 526
202 774
0.92
802.1
55 100
51 684
726
51 912
50 355
498
236
0.71
99.6
Cherry
398 141
378 632
234
312 602
287 594
66 264
42 280
4.07
121.1
Lemon
651 767
640 687
16 999
405 988
373 509
251 698
68 494
5.29
157.8
Mandarin
744 339
736 151
903
462 475
425 477
274 579
51 446
6.03
159.2
Banana
189 107
183 812
237 235
421 019
387 337
28
-
5.49
43.7
Pomegranate
106 560
104 748
1 939
91 658
84 325
15 029
6 637
1.19
114.3
1 426 965
1 375 594
146 491
1 265 209
1 163 992
256 876
52 489
16.49
108.7
539 435
519 476
2 995
501 537
461 414
20 934
5 035
6.54
103.6
2 972
2 907
6 508
2 789
2 566
6 626
203
0.04
104.2
3 612 781
3 508 010
22 826
2 539 592
2 080 280
1 064 596
779 680
29.47
138.1
180 917
172 414
-
172 378
158 588
36
36
2.25
100.0
Strawberry
Chestnut
Orange
Peach
Bitter Orange
Grape
Sour Cherry
Even though the fruit production successively covers the domestic consumption, the increase noticed in the fruit juice
consumption in Turkey in recent years offers attractive possibilities for the fruits used in the related industry. According
to the data of the Fruit Juice Industry Association, in 2008, 771 thousand tons of fruits were used for fruit juice
production in Turkey (2000:433 thousand tons). Turkey ranks in the top with apple production of 43.3%, and peach
with the rate of 15.4% and apricot with the rate of 9.7% and orange with the rate of 8.3% come after the apple. Since
the orange types, produced in Turkey, are not of industrial type, they cannot adequately be used in fruit juice
production. Therefore, the share of orange in fruit juice production is limited when compared to its production.
While the fruit juice consumption per capita in Turkey is 10.8 liters in 2008, this figure is about 25 liters in Europe. That
the consumption, being 5.1 liters in 2003, increased two times in 2008 and is still quite lower than the European
average promises hope for the relevant sector. Achievement by the sector of 20 years average rate in the last 5 years
also increased the fruit production investment. A Brazilian Company namely Cutralle, one of the largest orange juice
producers, launched its large-scaled fruit production investments to produce stone fruit juices under the roof of
Anadolu, Ozgorkey Groups and Anadolu Etap. That the Indian Company, namely Jain, has shifted to Turkey its
investments made in this field in order to compete in the Middle East and European markets, is another indicator of the
important signals of the investments in this field.
While the Fruit Juice Industry Association estimated that the fruit juice sector’s need of 800 thousand tons of fruits
would reach 1.5 million tons in 4 years, the constitution of the existing farms by small parcels, being the general
problem of the agricultural sector, may cause problems in supply of the fruits in the sector. While the support of the
46
Ministry of Agriculture to the sappling investments by 50% accelarates the investments in this field, several fruit juice
companies are trying to provide fruit supply by distributing sapplings to fruit producers.
While the size of fruit juice consumption is stated as TRL 1.2 billion annually, it is expected to reach TRL 3 billion in 5
years.
C.2.
SMALL AND GREAT CATTLE BREEDING, POULTRY SECTORS
The importance of the livestock sector was put on the agenda one more time in recent days due to the effect of the
sharp increase particularly in red meat. As it was in several fields of the agricultural production, the livestock sector has
various problems despite the higher potential. However, the poultry sector, which we will examine under the title of
livestock, seems to have got rid of the basic infrastructure problems, experienced by the livestock sector thanks to its
achievements on advanced production techniques (Cakmak, 2008).
In Turkey, in the farms where great cattle breeding activities are handled, the common tendency is to have only a few
animals. Whereas the rate of the farms having 1-4 great cattle is 59.7%, the rate of the farms having more than 50
cattle is only 0.7%. As for the small cattle breeding, the situation is the same.
As of 2008, in Turkey, the great cattle number was detected to be 10.9 million. It is reported that the great cattle
number, being 12.3 million in 1991, gradually decreased until 2003 and recessed down to 9.9 million and gradually
increased again.
Whereas the number of the culture breed cattle increased both in number and in percentage from 1991 until 2008, the
number of the native cattle decreased in both respects. Increase of the share of crossbreed cattle in the total livestock
although it does not increase in number has been detected to be a factor preventing a possible productivity growth.
Bottleneck of animals with breeder certificate is indicated as an obstacle slowing down the speed of the aforesaid
structural mutation. (Cakmak, 2008)
Number of Great Cattle according to Type and Race
Cow (Culture) Cow (Crossbreed)
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
1 253 865
1 337 410
1 442 000
1 512 000
1 702 000
1 795 000
1 715 000
1 733 000
1 782 000
1 806 000
1 854 000
1 859 786
1 940 506
2 109 393
2 354 957
2 771 818
3 295 678
3 554 585
Cow (Domestic)
4 033 375
4 131 507
4 342 000
4 543 000
4 776 000
4 909 000
4 690 000
4 695 000
4 826 000
4 738 000
4 620 000
4 357 549
4 284 890
4 395 090
4 537 998
4 694 197
4 465 350
4 454 647
Reference: Turkish Statistics Institute , Livestock
,
Statistics, 2008
47
6 685 683
6 481 990
6 126 000
5 846 000
5 311 000
5 182 000
4 780 000
4 603 000
4 446 000
4 217 000
4 074 000
3 586 163
3 562 706
3 564 863
3 633 485
3 405 349
3 275 725
2 850 710
Buffalo
366 150
352 410
316 000
305 000
255 000
235 000
194 000
176 000
165 000
146 000
138 000
121 077
113 356
103 900
104 965
100 516
84 705
86 297
We would like to handle the projections on meat and milk production on which battles royal are made recently as a
result of increase of the small cattle exportation by opening a parenthesis.
According to the OECD-FAO projections, Turkey’s beef production would grow to 448.2 thousand tons by an annual
average rate of 2.4% in 2010-2018. It is anticipated that while the consumption will remain below the production in the
relevant period, the consumption of beef that is 3.4 kilograms in 2008 would grow to 3.5 kilograms in 2018. During the
period when we prepare our report, while beef prices are considerably increasing, it might be expected that
establishment of freedom of importation, which is to determine the future of the beef market, would have a great
impact on the investment decisions.
Great Cattle Meat Projection (Thou. Tons)
2008
Production
360.0
Import
2.0
Consumption
366.5
Final stocks
23
Export
0.5
Trade balance
-1.5
Production/Consumption (%)
98.2
Per Capita Consumption (kg/year) 3.4
2009
366.1
2.1
361.3
21.70
8.1
6.1
101.3
3.3
2010
373.0
0.6
370.3
24.38
0.6
0.0
100.7
3.3
2011
383.6
2.3
379.0
23.18
8.1
5.8
101.2
3.4
2012
394.1
2.4
389.8
24.23
5.7
3.3
101.1
3.4
2013
402.5
2.5
395.4
24.88
8.9
6.4
101.8
3.4
2014
409.6
2.6
401.1
26.06
9.9
7.4
102.1
3.5
2015
420.9
2.7
407.7
25.75
16.2
13.5
103.2
3.5
2016
2017
429.6
2.8
414.4
27.17
16.5
13.7
103.7
3.5
2018
437.7
2.9
419.5
27.72
20.6
17.7
104.4
3.5
448.2
3.0
428.7
27.94
22.2
19.2
104.5
3.5
Reference: OECD-FAO Agricultural Outlook (2009-2018)
Again, in the same projections, it is stated that the milk production, being 12,195 thousand tons in 2008, would grow to
14,337 thousand tons by an annual average increase rate of 2.6% in 2010-2014. It is additionally anticipated that the
milk production per cattle that is 709 kilograms in 2008 would reach 773 kilograms in 2014 and increase up to 823
kilograms in 2018. Whereas the milk productivity in Turkey in 2008 was 709 kg/year per cattle, this figure was 6.2 tons
in EU-27. A considerable change is not expected in this comparison in respect of the milk productivity.
In the last twenty years, a sharp decrease was noticed in native sheep, merino sheep, goat and angora goat breeding.
Due to either decrease of use of the pastures for security problems or decrease of revenues in livestock breeding, the
number of small cattle, being 51.2 million in 1991 gradually decreased and recessed to 29.6 million until 2008.
48
Number of Small Cattle acc. to Races and Types
Sheep (Domestic)
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sheep (Merinos)
39 590 493
38 575 828
36 709 000
34 823 000
32 985 000
32 234 000
29 376 000
28 560 000
29 425 000
27 719 000
26 213 000
24 473 826
24 689 169
24 438 459
24 551 972
24 801 481
24 491 211
22 955 941
841 847
840 110
832 000
823 000
806 000
838 000
862 000
875 000
831 000
773 000
759 000
699 880
742 370
762 696
752 353
815 431
971 082
1 018 650
Goat (hair)
9 579 256
9 439 600
9 192 000
8 767 000
8 397 000
8 242 000
7 761 000
7 523 000
7 284 000
6 828 000
6 676 000
6 519 332
6 516 088
6 379 900
6 284 498
6 433 744
6 095 292
5 435 393
Goat (Angora)
1 184 942
1 014 340
941 000
797 000
714 000
709 000
615 000
534 000
490 000
373 000
346 000
260 762
255 587
230 037
232 966
209 550
191 066
158 168
Reference: Turkish Statistics Institute, 2008
,
While the native sheep constitutes 77.6% of the total number of sheep and goats as of 2008, Merinos sheep, the wool
of which is used for manufacturing high-quality wool fabrics and which is quite efficient in respect of mutton, only
constitutes 3.4%. Although the share of Merinos sheep increases in recent years, it is still considered lower. Merinos
race, which do not like warm and rainy climates, and grow up better in steppe regions and has many types, were first
imported from Spain in 1843, the number of these sheep remained quite lower. Merinos mostly grow up in the western
regions in Turkey (Cakmak, 2008).
Whereas the number of goats decreases in parallel with the number of small cattle, the rate of goats in the total
livestock breeding has not changed compared to 1991. The number of angora goat both decreased and recessed from
2.3% in 1991 to 0.5 in 2008.
As we mentioned in the first section of our report, the sector, the global developments of which follow up closely, is the
poultry sector and according to the specialists, the level achieved by the production of eggs and chicken is not below
the levels of developed countries (Cakmak, 2008).
Unlike either the vegetable production or the great cattle and small cattle breeding; the production in poultry sector
increased at higher rates. In the relevant sector including the hens, turkeys, gooses, and ducks, the number of poultry
increased from 145 million in 1991 up to 249 million in 2008. It is noticed that due to the crisis of 1994, 2001 and the
last global financial crisis, the number of animals in the poultry sector considerably decreased. Whereas the almost the
entire sector consists of hens and broilers, the number of turkey, goose and ducks is below 2% according to 2008 data.
While the share of the hens in the total is gradually decreasing, the share of the broilers is increasing.
49
Number of Poultry acc. to their Types
Hens
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
50 826 656
52 224 952
58 179 047
57 842 034
57 324 654
53 883 070
61 401 783
69 722 271
71 885 207
64 709 040
55 675 750
57 139 257
60 399 520
58 774 172
60 275 674
58 698 485
64 286 383
63 364 818
Broilers
Turkeys
88 379 548
100 305 100
120 080 935
125 842 269
71 689 773
99 073 900
104 870 702
167 275 380
167 862 730
193 459 280
161 899 442
188 637 066
217 133 076
238 101 895
257 221 440
286 121 360
205 082 159
180 915 558
3 132 676
3 332 794
3 340 241
3 441 995
3 291 000
3 063 540
5 327 501
3 805 345
3 762 516
3 681 558
3 254 018
3 092 408
3 994 093
3 902 346
3 697 103
3 226 941
2 675 407
3 230 318
Gooses
1 599 831
1 752 495
1 687 596
1 719 833
1 745 163
1 641 915
1 794 610
1 771 327
1 670 916
1 496 604
1 397 560
1 400 136
1 336 775
1 250 634
1 066 581
830 081
1 022 711
1 062 887
Ducks
1 112 015
1 154 743
1 171 961
1 186 891
1 199 925
1 093 860
1 828 792
1 339 468
1 294 824
1 104 176
913 748
832 091
810 910
770 436
656 409
525 250
481 829
470 158
Reference: Turkish Statistics Institute, 2008
Poultry Meat Producers and Breeders Association (BESD-BIR) reports that there are 12,650 broilers, 2,800 hencoops in
the sector as of 2007 and added that in spite of these higher figures, major part of the poultry meat is produced by
limited number of farms. In 2006 approximately 90% of the poultry meat was produced by around 40 farms. While the
highest share in the poultry meat production in Turkey belongs to Eastern Marmara, Western Anatolia is one move
ahead in egg production (Cakmak, 2008).
Total poultry meat production increased by annual average rate of 9.8% in 2002-2007; however it reached to 1.1
million tons as of 2007.
Poultry Meat Production and Consumption Statistics (Tons)
Poultry
M.Prod.
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007**
162.569
179.073
216.214
276.501
233.510
313.154
415.155
493.271
497.720
557.666
662.096
592.567
620.581
768.012
940.889
978.400
945.779
1.012.000
Reference : BESD-BIR
50
Chicken and
Exp. Total
Turkey meat HensAnd
Poultry Meat Production Imp.
Prod
Diff.
Inc. (%)
Pro.
Other Po. Pro.
0
0
0
0
0
2.646
3.223
2.678
9.577
18.27
23.265
38.991
24.582
34.078
46.248
53.530
45.750
33.000
54.190
59.691
72.071
92.167
77.837
101.739
135.162
120.640
114.853
80.142
67.021
41.813
60.043
51.255
58.295
52.850
40.250
55.000
216.759
238.764
288.285
368.668
311.347
417.539
553.540
616.589
622.150
656.078
752.382
673.371
705.206
853.345
1.045.432
1.084.780
1.031.779
1.100.000
10,15
20,74
27,88
-15,55
34,11
32,57
11,39
0,90
5,45
14,68
-10,50
4,73
21,01
22,51
3,76
-4,89
6,61
-372
311
612
-937
-12.227
-4.875
-4.889
-4.420
-5.450
-2.398
-1.854
-12.416
-6.909
-9.175
-11.711
-30.922
-17.832
-24.775
Per capita
Cons.
(kg/year)
3,82
4,13
4,90
6,12
4,89
6,62
8,64
9,47
9,37
9,77
11,05
9,60
10,01
11,94
14,44
14,53
13,81
15,23
Although the poultry meat consumption considerably increased within the last 20 years, it is still below the EU average.
The consumption per capita, being 3.8 kg/year in 1990, increased up to 11 kg in 2000 and 15.2 kg in 2007. In the
European Union, the annual consumption is higher than 20 kg. From this point of view, the demand potential of the
sector seems higher. On the other hand, OECD-FAO reports that the consumption of poultry per capita is 12.5 kg for
2008.
Poultry Meat Consumption
Projection (Per capita;kg)
14.0
13.5
13.0
12.5
12.0
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Source: OECD-FAO Agricultural Outlook (2009-2018) Report
Quotation obstacles and failure to cope with the technical conditions are the factors, resulting in decrease of the export
in the poultry sector. As of 2007, Vietnam, Azerbaijan, Tajikistan, Bosnia-Herzegovina have been the most important
countries in terms of export of the poultry sector products. The chicken foot export made to Vietnam alone corresponds
to 18.5 million dollars of total poultry meat and pluck export of 44.5 million dollars realized in 2007 (Source: BESDBIR).
C.3.
FISHERIES
The fisheries sector in Turkey is divided into 3 groups: These are fishable seafood and fresh water products and culture
fishing. Production amounts of fishable seafood and freshwater products are given in the following tables. Even though
the product amounts produced in 2000-2008 are fluctuated in both sectors, dependence on the natural conditions is
deemed to be a factor preventing significant increases in product amounts. Whereas the anchovy has a share of 64% in
total weight of the taken seafood of 396 thousand tons as of 2008, the goat fish (red mullet) follows the anchovy, with
the share of 10%.
51
Taken Seafood and Freshwater Products (Thousand Tons)
560
47
46
520
45
480
44
440
43
400
42
Seafood (left axis)
360
41
Fresh water products (right axis)
320
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
Pearl mullet, common carp and sandsmellt rank in the top three in 41 thousand tons of fresh water products taken in
2008 successively with the rates of 29%, 28% and 16%. Detailed tables relating to the caught sea fish and fresh water
products are enclosed:
Upon consideration in more details of the culture fishing the production of which is less related to the natural conditions
in the fisheries sector, it is noticed that this sector shrank in 2001 and 2002 successively at the rates of 14.9% and 9%
and expands in 2003-2008 at an annual average increase rate of 16.7%. Sector production grew to 152.2 thousand
tons by the rate of 8.8% in 2008.
Whereas trout is taken in the entire of the culture fishing in the inland waters, perch and seabream are domineers in
aquaculture made in the sea.
Fish Farm
: 2000-2008 (Ton s)
2000
2001
2002
2003
2004
2005
2006
2007
2008
42 572
36 827
33 707
39 674
43 432
48 033
56 026
58 433
65 928
813
687
590
543
683
571
668
600
629
1 961
1 240
846
1 194
1 650
1 249
1 633
2 740
2 721
Seabream
15 460
12 939
11 681
16 735
20 435
27 634
28 463
33 500
31 670
Perch
17 877
15 546
14 339
20 982
26 297
37 290
38 408
41 900
49 270
Mussel
321
5
2
815
1 513
1 500
1 545
1 100
1 772
Shrimp
27
-
-
-
-
-
-
-
-
Others
-
-
-
-
-
2 000
2 200
1 600
196
79 031
67 244
61 165
79 943
94 010
118 277
128 943
139 873
152 186
Inland waters
Trout
Mirror carp
Sea
Trout
Total
Reference
: : Turkish Statistics Institute
52
Turkey is the net exporter in the field of fisheries. In 2009, Turkey carried out export of 189 billion dollars and import of
31 billion dollars. Whereas the foreign trade of the fisheries grew by considerable rates in the last 10 years, the export
of the relevant sector grew by an annual average rate of 22.4% and the import of the relevant sector grew by 60%.
Fisheries Sector Foreign Trade (million $)
250
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
Export
Import
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
According to fisheries sector report issued by Center of Legislation Harmonization in Fisheries, consumption of fisheries
per capita in Turkey is 8 Kg as of 2007. Consumption of fisheries in Turkey is quite below than the European average.
While the European average per capita is 22.7 Kg as of 2006, this figure is 40.5 Kg in Spain. That the per capita
consumption is quite low the European average indicates that particularly the culture fishing has a great potential due
to its respective independence from the natural conditions.
53
D.
D. Special Files:
Relations with Food Industry, GAP, EU and WTO
54
D. SPECIAL FILES: RELATIONS WITH FOOD INDUSTRY, GAP, EU AND WTO
D.1.
D.1.1.
FOOD INDUSTRY
General Assessment
Though fundamental objective of our study is to take a photograph of the agricultural sector in Turkey, such study
would not be considered a consolidated study without examination of food and beverage industry, for which the
majority of the agricultural products are used as input. Therefore, we found appropriate also taking a photo of the food
and beverages sector under the light of the recent data we have, without much more going into the particulars.
Transformation of the input consisting of products of agriculture, livestock and fisheries into human nutrition by using
industrial techniques is called as food industry. As of 2007, the food industry sales of 2 trillion dollars in the world
constitute 15% of the total global revenue. Domestic consumption of the food sector that is 19% of the GDP in Turkey
in 2008 is 120.6 billion dollars and the net foreign sales including 3.2 billion dollars (see Photos from Package – Food
Industry).
Photographs from Food Industry (ISPAT, 2008)
•
•
Share of the food and beverage sector consumption in 2008 GDP is 19%.
21.4% of the companies acting the in the sector produces bakery products; 19.8% produces fruits and
vegetables and 14.7% produces milk and milk products.
•
In the country total food production capacity reached 127 million tons and the beverage capacity reached 13.3
million liters.
•
In the same year, whereas Turkey became 4th tomato/pepper paste exporter, it exported more than half of its
production.
•
In 2008, Turkey was on the sixth order in tea production and processing in the world.
•
In the same year, the number of the companies directly investing in Turkey increased to 369 by 1.5 times.
•
The export of hazelnut, dried grape, fig and apricot reached 2.2 billion dollars.
Traditionally, the food industry is classified into eight main categories as follows: Meat and meat products; milk and
milk products; dairy products; starch products; fruit and vegetable processing; oily seed products; sugar products and
animal feed industries. Basic features of the industry in all over the world are consolidation, brandization and
globalization. Considered from the perspective of these criteria, it is apparent that Turkey participates in the trends but
its share remains quite below the income level and development speed despite its giant potential.
According the last count, it is reported that there are about 25 and 40 thousand food entities in Turkey; only 200 of
these entities are using large scaled state-of-the art technology. Whereas the downstream main distribution channels of
the industry are the retail chains any longer in all over the world, it is noticed that traditional and small-sized entities
such as grocer, greengrocer and butcher are ahead. In our country, despite the attempts on food hygiene, certification
and analysis, a major part of the sector, still using cheap and low-quality inputs due to the lower level of income could
not be entered into records.
Another sign of the development is the brandization. In the industry operating with lower margin rates, one of the
important methods of increasing the added value is to make the customers be accustomed to the trademark. In our
country, excluding Efes Pilsen and Ulker, brandization in the food sector is very rare.
55
The Turkish agriculture has been in a very critical period in respect of either the internal dynamics or the fast revolution
in the global trade regime; unless the necessary structural reforms are started urgently, many traditional products
would be exposed to the threat of losing their competition power. Nevertheless, upon an analysis of demand and supply
as follows and as detailed with reference some developing businesses, the future of the food industry seems to be more
brilliant.
D.1.2.
Demand Analysis
Let’s start to remember major factors determining the demand in the food industry: These are increase of population
and income per capita; urbanization; change in the family structure (for instance the rate of bachelorship, immediate
families and the participation of the women in the labor force) and changing consumption models and trends.
In respect of demand, Turkey is almost a perfect potential for development of the food industry. The advantages offered
by the country may be listed as follows:
The food consumption of households have three stages: The income elasticity in lower income levels is around 1; in
other words an increase of 1% in the income results in the same level of increase in the food consumption. In medium
level of income, the total expenses - reserved for the food - increase; however, its share in the budget decreases too.
As for the higher income levels, while the income elasticity of the food is so low, the consumption composition shifts to
the luxurious, exotic and in-fashion products.
Since the population increase rate is still about 1.5%, even if all the other demand elements remain the same, the
industry has long term growth potential.
As 30% of the population in Turkey has lower income, it is expected that the food consumption in this section would
increase fast in parallel with the long term growth rate of the country, expected to be 4-5%. 5-10% in the highest
income level produces increasing demand for wide range of products from aged imported wines, exotic fruits and
convenience food. Avocado, mango, frozen Alaska haddock constitute small but highly definitive examples.
As long as the urbanization increases, the demand shifts from bulk, off-the-record and semi-finished products to
branded and packaged products. In a country where 35% of the population still lives in the rural areas and fast
migration is observed, the demand for packed and branded products would increase more rapidly than the total
demand. In other words, besides the demand increase from routine ways, the organized entities occupy the off-therecord market share and would gain a second momentum. This transition may easily be noticed in the milk, milk
products and dairy products. Particularly, whereas unpacked and unbranded milk and yoghurt sale is almost down to
zero in our western regions, brandization in the cheese types is also increasing.
Turkey is still a country where its transition from multi-generation extended family to the immediate family has not
been completed; the rate of participation by the women in the labor force is increasing and but is still quite lower than
the western countries; the divorces increases day-by-day; and the age of marriage goes up. All these factors create
very appropriate conditions for increase of convenience food consumption. Take-home ravioli-like dish, peeled and
sliced potato, take-home rotary beef and any and all take-home foods with meat are the examples of the products
penetrated into the market thanks to this social evolution.
The Turks, on one hand, strictly adhered to conservative social opinions and its cultural roots, on the other hand
adapting the consumption models of the West rank in the top among the Developing Countries,. This social attitude
constitutes an excellent infrastructure for importation of many nutritional products from gourmet food to the exotic
plants and subsequently for domestic production. Incredible growth of pizza instead of Turkish pizza, burger instead
meat ball; sushi and Chinese food may be shown as example for this development. Additionally, in our country where a
fast passage from the Mediterranean Diet to Northern Europe Diet and spread of healthy diet fashion in the higher and
56
middle socio-economic classes indicate that important changes would occur in the demand composition of the food
industry. Transition from high alcohol contented and distilled drinks to beers, wines and light fruit cocktails including
liquors is also an example. Low and low-middle class would also shift from grain weighted diet to protein and fat
contented diet.
D.1.3.
Supply Analysis
We would like to remind that the major elements determining the supply in the food industry are access in agricultural
input and cost; reasonable labor force; import and export opportunities; and being open to the foreign investment –
technology transfer and capital accumulation –particularly WTO and EU memberships.
In a country, which has one of the rich agricultural product ranges of the world, in respect of supply, there is no
problem in supply of raw materials (exceptions to this observation are listed below). While opening of the agriculture to
foreign trade might bring major difficulties for the producers, the same problem does not exist for the food industry.
The food industry - thanks to its experience acquired since the first years of the Republic, distribution networks and
know-how and passive capacity of 30-40% due to seasonality - would notably benefit from the discounts to occur in the
input prices after liberalization of import of the agricultural products. For instance, the primary inputs in the business
branches using corn, sugar and beef may visibly become cheaper.
The food industry is one of the most intense and effortful branches besides textile and tourism. In this context, the food
industry is also attractive for the population and number of unqualified workers, rural and first generation urban, still
highly familiar with agriculture.
The food industry and demand in the EU, the largest commercial partner in the west, are considered to have been
saturated and this might force our producers to the extent that the importation is set free. However, Russia, Caucasus,
Central Asia and Middle East are the major regions of the world, importing food; and additionally, since we have
similarities with these countries such as palatal delight and traditions (excluding Russia and Armenia), these constitute
charming markets for our export potential.
The sector is furthermore open to the foreign investments; as of 2009, total 787 foreign companies, consisting 367
companies for the agricultural sector and 420 companies for the food industry and production, are active in the
agriculture/food sector (Federation of Food and Beverage Industry Associations of Turkey, 2009).
D.1.4.
Risks
However, there are also serious risks and factors adversely affecting the productivity. Particularly the major factor is
that agriculture-supply-industry cooperation is very vulnerable. The concept “Contract agriculture”, widely used by the
global food giants, has not been common even, heard, excluding a few businesses related exportation. Furthermore,
Bulut, Arslan, Barca (2007) reported that the possibility of application of the contracts is lower in the environments
where agricultural prices are arranged in favor of the farmers.
Dependence of the major part of agricultural production in Turkey on the climatic conditions makes indistinct the raw
material prices even supply of raw materials to operate the factory with full capacity.
Despite the giant steps taken on this matter, food hygiene and conformity with the international codex in Turkey
(achievement of conformity certificate) fall far behind the Western Countries. Investigations initiated and provisional
importation prohibitions imposed frequently by EU and Russia adversely and notably affect the profit margins. Despite
all the efforts, the producers and the State failed to have definite achievement to prevent even simple animal diseases
such as foot and mouth disease (aphtae epizooticae). Rise of carcinogenic organics and insecticide-chemical fertilizer
residues over the minimum reference values in the vegetable products also decreases the export potential of the food
57
industry. Within this context, we are of the opinion that immediate adoption of the food hygiene standards of EU,
frequently amended and expanded, would significantly contribute to the exportation.
Alterations often made in the agriculture and food importation and exportation regimes, the rationale of which is not so
obvious and not informed beforehand, radically affect the price and supply in the domestic market and cause ambiguity.
D.1.5.
Business Branches in the Ascendant in Food Industry
Some of the business branches, which have higher potential for the food industry, as far as we determined, and are
even on the rise in several aspects, are as follows:
•
Domestic and foreign franchising,15
•
Exportation to Syria, Iraq and Middle East Countries,16
•
Organic Food Production and Exportation (see. Box – Turkey’s Organic Agricultural Profile),17
•
Take-home and frozen gourmet food18,
•
Large-scaled processed raw (mince, small pieces of meat, etc.) and cooked/salted red meat production and
distribution – to form trademarks19,
•
To create new trademarks, symbolizing quality and hygiene, for the poured fruits and vegetables.
TURKEY’S ORGANIC AGRICULTURE PROFILE
IN TURKEY, in recent years, amount of the organic products also started to increase. However, in the world, this
diversity consists of wide range of products such as furniture, cosmetics, shampoo, fisheries and wool.
According to the data of the Ministry of AGRICULTURE, in Turkey 7,364 producers produce dried organic fruit, on a land
of total 22,771 hectares. These products are processed in 829 entities.
98% of the organic products, produced in TURKEY, are exported. In this export, the great export share is to Germany
with a rate of 60%. The USA and other European Countries follow Germany. Annual export income generated in this
field is about 100 million dollars.
On PRODUCT basis, the buyer countries are as follows: Legume (Germany-England), dried fig (Australia, Austria,
Belgium, Switzerland, Canada, Denmark, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, the USA,
England), dried apricot (13 countries), fruit juice (Germany, Greece, Israel, the USA), dried grape (11 countries), frozen
food (Belgium, Brazil, Switzerland, France, Denmark, Germany, Spain, Israel, Sweden).
It is estimated that the size of the world market growth in ORGANIC agriculture is about 16 billion dollars. Now, the
average market increase is 25%. This rate may increase up to 40% for certain countries.
In 120 countries (Australia, Argentine and Italia in the top three) organic agriculture is made on a total land of 17
million hectares. This corresponds to nearly 3% of the agricultural production of the whole world. It is expected that this
rate would increase to 20% in 2010. Organic products are sold in only 1.8 of all the agricultural entities.
Source: http://www.turkticaret.net/business_center/haber.php?pid=52
15 See http://www.frmtr.com/ekonomi-finans-borsa/3250489-cok-kazandiracak-firsatlari.html
16 See http://www.8sutun.com/haberdetay.asp?tarih=13.03.2010&Newsid=65295&Categoryid=6
17Seehttp://docs.google.com/viewer?a=v&q=cache:3XkV4YXQJMEJ:kutuphane.uludag.edu.tr/PDF/ziraat/200822(2)/M4.pdf+organik+g%C4%B1da+%C3%BCretimi&hl=tr&gl=tr&pid=bl&srcid=ADGEEShspHwlkaf94EZrRBSLF7K-lAgq6bTho4XGQizvfRlAwHwh4vXhbEKSyVogCBfssh6n2osbnEVOmXXgib1M5nhuyx5FXC3T95GVn6vW4ieK3H_CX8_JanHPjN5bySydsSOIbEf&sig=AHIEtbQaSSwIvnxj
OPUkv_K92eaZSFtBTQ
18 See http://www.cine-tarim.com.tr/dergi/arsiv48/sektorel02.htm
19 See http://referansnoktasi.blogcu.com/sarkuteri-sektoru/4354571
58
D.2.
GAP (SOUTHEAST ANATOLIA PROJECT): ONE-LEG GIANT
Southeast Anatolia Project (GAP), launched in the period of Turgut Ozal in 1980s is the greatest public investment and
regional development project in the history of the Republic. The results, achieved by GAP up to date, result in design or
entry into effect of similar projects in many regions of our country. The first aim of GAP, consisting of nine provinces, is
to benefit from hydro-electric potential of Euphrates (Fırat)-Tigris (Dicle) rivers and the streams draining to the same.
In time, agricultural irrigation, industrialization and lastly rural development were involved in the development
supporting project.
Upon consideration of GAP, in respect of energy generation being the first target, it is apparent that it changed the faith
of Turkey. Within the scope of GAP, 9 Hydro-electric Power Plants were completed and 5% of energy need of Turkey is
supplied from these resources. (GAP Regional Development Management Organization, 2008).
Total value of the energy generated by GAP exceeded 17 billion dollars. This rate would be increased up to 7.5% of the
energy consumption concurrently with the completion of the remaining dams.
59
Although important steps were taken in the investments such as transportation and organized industrial zone in the
GAP region, it is apparent that the two other objectives of the project, consisting of efforts of completion of the
irrigation network and conscious agriculture/industrialization, failed to produce effective results in respect of public
investment.
•
In GAP region as of January 2008, a land of 272,972 hectares was started to be irrigated. In a land of 99,518
hectares, irrigation network construction is still continued. Physical realization rate of GAP irrigation
investments is 15% as of 2006. (According to TUSIAD Report 2008: 14%). For the State Minister, responsible
for GAP, named Mr. Cevdet Yılmaz, the irrigation projects would be completed in 2012 and as of 2013, a land
of 1 million 60 thousand hectares would be started to be irrigated20.
•
In Sanlıurfa-Harran Plain where the irrigation has been started since 1995, while the added value per capita
was USD 596 before irrigation of a land of 30,000 hectares, this value increased to USD 859 in 2006.
•
The number of farms, employing more than 10 persons in the GAP Region as of the end of 2007, is 1,969. In
these farms, total 87,566 persons are employed.
•
The level of export made from GAP also increased; the export amount, being USD 585 million in 2002,
increased up to 3,864 million dollars in 2009. The share of the export from the GAP zone in the total export of
Turkey increased from 2.3% to 3.03% in the same period.
Southeast Anatolian Exporters Associations (million USD)
2006
2007
2008
2009
Jan-Apr 2009 Jan-Apr 2010 % change
2,239
2,842
3,897
3,864
1,216
1,512
24
5
5
8
14
6
13
106
Grain, Legume and Oil Seed Amounts
404
541
927
800
310
235
-24
Dried Fruits and Products
130
181
202
182
57
62
9
Textile and Raw Materials
1,546
2,091
2,446
2,365
711
875
23
153
224
313
503
131
327
150
Total
Fisheries and Animal Products
Other Sectors
Reference: Secretariat General of the Southeast Anatolian Exporters Association
We have accepted the importance of these achievements; however, we would state that these are under the targets we
set forth below. We also remind you that while migration from the region continue, besides the agricultural
achievements, total land of 50,000 hectares, according to some estimates, lost their productivity due to unconscious
irrigation and fertilization. If this estimate is correct, agricultural productivity has been lost in a larger land in Harran
Plain due to incorrect irrigation. This observation indicates that the most important structural aspect that is the
requirement for human training has not been fulfilled as required.
It would not be correct to project management efforts of GAP Regional Development Administration Organization and
other public institutions acting in coordination with the preceding organization. Underlying problems are inadequacy of
the resources set aside for the project, inadequate investment by the private sector and the most important one, failure
to get adequate financial support from supra-institutional financing organizations (such as World Bank) and private
financial institutions. Several Western financing and donation resources are not adequately benefited as a result of
20 A few days before publication of our report, it was officially declared that 2012 irrigation targets would not be able to be achieved in GAP. Prof. Erol Cakmak,
acting as arbitrator for our report, stated that any part of the targeted lands to be started to be irrigated would not be so economical due to its topographical
structure. As we do not have a detailed topographical map, we have difficulty in determining the area of the lands to be irrigated efficiently. However, we would
like to remind you that the estimates given below are extremely conservative and the area of the land to be used for final irrigated agriculture is only one of the
factors we take into account.
60
successful defense - in the West -of the claim that the Project would damage the historical and environmental values
(Ilısu Dam) and unsuccessful defense our thesis that the water distribution is made fairly between the neighbor
countries and us
(Turkey-Syria Water Disputes). Failure to adequately train the farmers of the region is not only a
problem of GAP but also a common problem for the entire of Turkey; and this problem arises out of deficiency of
qualified cadres in the related ministries for financial reasons.
Unless measures to change these conditions in favor of us are taken, the most possible scenario would be completion of
the Project by using limited public resources. The resource anticipated for activation of all the aspects of the Project is
TRL 15 billion currently; however, increase of this amount by two or three times would not be so surprising. Upon
consideration that the one fourth of the unemployment insurance fund is transferred to the budget in 2009-2012 for
completion of GAP investments and this transferred fund is around TRL 1.5 billion for each year, in a scenario where this
fund is fixed, completion of the investments would most probably take 10 years.
However, the utmost care paid to the region by the Government and its efforts to create funds for the Project are
worthy of commendation; therefore even if it will take time, with the assumption that GAP would be completed as fast
as possible, we are of the point that it would be a correct approach to analyze its contribution to Turkish agriculture and
welfare of the region.
D.2.1.
Benefits of GAP in Agriculture
In case of completion of GAP; benefits, its aspects and benefits to be driven in the best scenario are summarized as
follows:21.
•
Upon completion of the irrigation network, it is definite that annual production amount for many products
increase. Secondly, interregional vegetable cultivation would differentiate radically.
•
It is quite possible that the industrial plants based on agriculture – to be established in the region – procure
new markets in the regions already abundantly exporting the Turkish agricultural products such as Iraq, Iran
and Mersin Port as well as Middle East or cause increases in shares in the existing markets22.
•
In the region, traditional pastures/small farms, stock farming might transform into large-scaled commercial
corporations and make considerable contributions to the meat and milk production.
•
In the region, there is a river of 2,235 km length, a lake of 6,481 hectares and a dam lake of 76,692 hectares.
Almost all of these lakes are appropriate for fish farms and tourism. We have not any reference relating to the
additional revenue to be generated from these lakes and regions.
•
Most of the lands, on which dried/extensive agriculture was made before, are appropriate for organic
agriculture and sale to this fast-increasing market promises higher rate of profit margins. (See: Applicability of
Organic Agriculture in GAP zone23). Notable organic agricultural activity is still noticed in the GAP Region, only
in Şanlıurfa and on a limited scale, in Gaziantep; however, there is no such activity in the other provinces.
D.2.2.
Agricultural Potential of GAP
In this section of our study, in case of completion of irrigation and farmers training aspects of GAP, the contribution of
GAP to the economy and agriculture is examined. It is upsetting that the official projections on this subject are very
untreated and old. Additionally, the figures given by the GAP Administration and the Ministry of Agriculture and Rural
Affairs are extremely obscure.
21 We found appropriate only to handle the gross product7revenue increase or net positive value concepts. We do not touch on the contributions of the Project
in the region in the form of sociological” public property advantages” such as piece in the region, cease of the migration, increase of the education level.
22 We are of the opinion that Turkey-Syria-Lebanon-Jordan economic cooperation agreement, even if the details have not been determined yet, would provide
GAP with new trade, service sale and export possibilities. Negotiations, we held with two employer union, put forth that the commercial activity in the region
increased within the last one year and tourist influx visibly increased. However, we do not have any data to measure this potential.
23 See http://www.zmo.org.tr/resimler/ekler/42ad93f7491f2a3_ek.pdf
61
Even if the estimates, for instance, that when the irrigation aspect is completed, 3.5 million persons would be employed
and agricultural production will be increased by two times are realistic, they cannot constitute basis for investment
decisions since they are not supported by at least statistics.
When we expand our research a little, we notice the opinion that GAP would contribute 50-100 dollars billion to the
agricultural output is frequently repeated in the agrarian environment. We have difficulty in believing this figure; this is
because whereas USD “added value” of total agricultural production, still corresponding to approximately 8% of the
GDP, is around 50 billion dollars according to 2009 figures, total population-land rate of GAP Project corresponds 10%
and 9% of Turkey. Perhaps, this figure is “gross”; in other words it is uttered as amount that is contribution without
deduction of irrigation, fertilizer and other inputs. Or it is considered that food processing and similar agricultural smallscaled industry would be added to the agricultural production and would contribute to the GDP.
Despite ambiguity of GAP’s agricultural contribution, the increases caused by GAP on product basis are gorgeous.
Products to benefit from the completion of the irrigation networks at the first phase are unshelled rice, cotton and
industrial vegetable products.
Additionally, shift of the products with partially lower added values such as grain, oily seeds and industrial plants from
Aegean, Mediterranean and Konya basins to the GAP region and shift by the relevant regions to fruits, vegetables and
flower etc., the export potentials of which are extremely higher would indirectly increase the total agricultural output of
Turkey. We hereby anticipate that the additional product value, arisen after completion of irrigation network, is annually
3-5 billion dollars. However, in case the farmers are equipped with the necessary information and agricultural
equipment, estimates may much more increase. How much production would be imported as raw materials and how
much would be processed in the region and offered to the domestic and foreign trade would determine the added value
to be derived from the region. Although our methods of estimation are very primitive, we think that the exportation
would increase by two times and the agricultural production would increase by 3-3.5 times (in amount) within five years
after completion of the irrigation network.
D.2.3.
Industrial Products in GAP
It is definite that upon completion of irrigation and farmers training in the region, the traditional xylem would radically
change; however, it is difficult to estimate the direction of this change. The first reason is the difficulty in calculation of
the long term effect of huge dams and irrigation channels constructed in GAP on the climate and soil structure. The
second reason is that changes between the product prices and modeling the effect of the same on the demand-supply
exceed he limits of this research. Institutionally, that the climatic changes would decrease a little the productivity of the
products and nevertheless immediate shift of the farmers to the higher added value products as proceeds in hectare/net
TRL are the natural assumptions.
In the near future, it is strongly possible to shift from the grains and legumes to unshelled rice, cotton and particularly
oily seeds in the region.
Production of plant such as Antep pistachio, of international importance, still increases in the region; nonetheless it is
observed that this plant is so sensitive to the climate. Antep pistachio and subsequently peanut may become two of the
most important export products of the region.
Cultivation of tomato, successfully sustained by Tat Konserve, has borne fruit. That 100% or more increase in
production would last for long years is a reasonable assumption. As long as an export demand arises for products such
as eggplant, pepper and cucumber, seeking similar growth conditions, increase of their production as complementary
products is possible.
62
The livestock, traditional source of living of the region, was seriously damaged by terrorism and incorrect incentive
policies in recent years. However, upon decrease of the livestock prices due to increase of corn production; the potential
in the extensive livestock seems quite higher in the region. Along with the increase of the great and small cattle flocks,
decreasing in number, increase would arise in red meat production that is the most expensive food in Turkey. In case
large-scaled livestock is performed consciously, it might become one of the most profitable investments in the region.
Another resource, never treated before, is the fish farms in the dam lakes. According to the limited researches we have,
almost all the dam lakes are appropriate for breeding fish. Important earnings might be gained by shifting to the dam
lakes of unsatisfied demand for water products, rapidly increasing due to health in Turkey.
Lastly, GAP is surrounded by 3 regions of the world, the richest of the world but the hungry for food diversity. These are
consecutively Middle East, Central Asia and Russia. Total food trade of these markets is estimated as 200 billion dollars.
D.3.
TURKEY AND EU’s COMMON AGRICULTURAL POLICY
EU’s Common Agricultural Policy (CAP) would be the most effective external factor over trading, production and rural
development in Turkish agriculture. Even if when and under which circumstances the membership of Turkey would be
initiated and the forms, which the CAP would turn into at that time, are ambiguous, it is definite that integration with
the EU economy is getting deep each passing day. We envisage that Turkey, whether the membership is initiated or
not, would approach to full harmonization with the CAP in a few years but definitely less than a 10 years’ period.
In this scenario, we firstly analyzed the brief history, structure and the form of the CAP. Secondly, we summarized the
major items of inharmoniousness between the Turkish agricultural policies and the CAP. Finally, while performing
empirical reviews about the share to be received from the CAP budget which consist the most important economical
concern in the context of Turkey’s membership to the EU, on the other hand, we researched the loss and possible gains
of Turkey.
D.3.1.
Brief History
The CAP, entered into force in 1962, is contemplated based on 3 major principles in its first period. These are; creating
a single market in EU; substituting import through customs walls of the production within the Union; increasing the
depth of EU through jointly financed programs. The main objectives of CAP may be summarized as: To increase
agricultural productivity; to provide a fair subsistence level for the farmers; to maintain stabilization in the market; to
ensure food safety and to keep the prices at reasonable levels.
In order to accomplish these objectives, at the beginning 4 basic instruments are accepted. These are; agricultural
products support programs, direct payments to the farmers, supply management and limitation (customs) precautions.
(See: Economic Development Foundation, EU’s Common Agricultural Policy for the CAP’s objectives, instruments and
contributions to the social welfare.)
CAP has mainly achieved its objectives in the headlines such as food supply, safety and creating a single market,
farmers’ welfare. However, it is observed that CAP has brought along many issues. While the customs barriers have
interrupted the world agricultural trade mostly, the underdeveloped countries, the subventions have created stocks that
are impossible to be disinvested. Whereas the opinion of disinvesting these stocks through export has a second
negative effect on the poor countries, a commercial war with the USA is about to arise. Most importantly, the burden of
CAP over the EU budget is increasing in every passing year. Even if small arrangements under the name of “reform”
have been made till 1990’s, the objectives and instruments of CAP have not changed so much except for imposing
quotes on milk production.
The first reforms (McSharry reforms) in order to adapt the CAP to the new conditions of the world and the EU, has been
executed in 1990’s. On the basis of the reforms, there exist articles which might be considered to be radical and
constitute the core of the future reforms such as decreasing the subventions for the products with surplus supply,
63
rendering payments gradually per house or person not amount, non-cultivationof some of the agricultural lands in
consideration for payment (European Union Common Agricultural Policy and Reflections on the Turkish Agriculture, the
Sample of Balıkesir, 2008).
D.3.2.
Today of CAP
While enhancement attempts by small arrangements over the system are continuing in 1993 -2000, the second radical
movement was initiated by Agenda 2000. The originating points of Agenda 2000 can be summarized as follows:
•
•
To decrease the pressure of 10 new members over the CAP’s budget,
To develop policies including the newly generated issues such as security of supply, environmental protection,
rural development and hygiene,
•
To comply with the criteria of the WTO (World Trade Organization) that is from now and on closely involved
with the global agricultural trade after the Uruguay round.
The differences between the original vision of the CAP and the design of Agenda 2000 are shown in the table
below:
THE OBJECTIVES OF THE COMMON AGRICULTURAL POLICY
To support the technical progress; to provide rational development of the agricultural production; to increase the
agricultural productivity by optimizing the factors of production especially the labor force,
•
•
•
•
To ensure an appropriate standard of living for the agricultural society, especially by increasing the income per
capita of the agricultural workers,
To balance the markets,
To provide accession in supply,
To procure that the supply reaches the consumers at reasonable prices. (Amsterdam Treaty art. 33 (39).
THE OBJECTIVES BROUGHT BY AGENDA 2000
•
To improve the competitive power through low prices for the agricultural producers to benefit from the positive
developments in the world market in and out of the EU,
•
To guarantee the consumers the safety and quality of food,
•
To provide a stable and appropriate standard of living,
•
Adopting environment-friendly production techniques and to respect the animal rights,
•
To integrate the instruments of Agricultural policy with the environmental objectives,
•
To search alternative income and employment possibilities for the farmers and their families,
To simplify the legislation of Union (SPO, Agenda 2000 and Turkey. Volume I, Directorate general for European
Union Affairs, September 1997, s.5)
Reference: EU-Turkey Chambers Forum, 2009
After the mid-term review of Agenda 2000 (health check), the current period that is the continuous evolution process
threshold by the June 2003 and April 2004 reforms. The reforms, in one sense, have again put into effect the principle
of the member countries’ having more right to comment on the agricultural policies. For example, countries have gained
more autonomy over the distribution of agricultural supports.
There are 4 bases lying under Agenda 2000, these can be summarized as single payment scheme; compulsory cross
compliance; modulation and financial discipline, and enhanced rural development policies. It is useful to analyze the
major elements of this new approach which considers agriculture from an integrated point of view:
Production and income support are separated completely with the last reforms excluding a few exceptions. From now
on, payments at financial dimension named as Single Farm Payment (SFP), would be determined by following the 20002002 harvest levels.
64
Compulsory Cross Compliance is the obligation to comply with the conditions of environmental and animal health, food
safety and quality within the framework of EU’s new Directive of Rural Lands are Wealthiness, in order to receive SFP.
Furthermore, the obligation to keep the fallow lands and the lands discontinued from agriculture at the conditions to be
engaged in agriculture has been imposed. However, in order to provide convenience for the countries during transition
period and at a broader perspective, within the light of a new opinion shifting the management of agricultural policies
from the EU to the member countries, the requestor countries may also give joint support to the production and the
product in some regions. In practice, only a few members continue to exercise these supports.
Modulation is a new concept which aims at providing the financing required for the execution of the rural development /
environmental protection priorities from the other items of CAP. The box below explains in detail the concept of
modulation which we consider to have more importance among the CAP payments for the following years. (See. Box –
What is Modulation?)
Box – What is Modulation?
Modulation is, basically, the transfer of subvention payments constituting the Pillar I of CAP to the Second Pillar that is
the rural development expenditures. In other words, with this mechanism, the expenditures are being shifted among
the budgets. Compulsory modulation, excluding the very small-scale farms, in all of the 15-EU members, in 2005, starts
with the rate 3 % and would increase to 5 % in 2012. However, the rate of transition maybe increased as a result of the
health check.
Member countries can increase the modulation by %20 voluntarily. The 20 % of the funds to be saved as a result of
compulsory modulation recourses to the budgets of the member countries; and the remaining is distributed among all
the member countries according to the determined criteria24.
However, entire of the savings to be retained from
voluntary modulation remains at the member country.
Financial discipline was anticipated as a solution for the problem of over-budget about which the countries rendering net
payments to CAP complain. In the past, according to that decision taken upon frequently exceeding the CAP budget
limits, if the expenditures seem to possibly exceed the maximum, as a precaution, in the direct aids, a deduction
corresponding to the high band of 300 million Euros of the budget limit would automatically be made. EU Commission
would give the relevant proposal on this issue; the precautions would be approved at the year-end meeting of the
Council (at the Leaders Summit). Besides, annual increases in CAP budget in 2007 – 2013 are limited by 1%.
24 However, as the result of this distribution, it is anticipated that at least 80% of the modulation savings would be retained by the contributing country.
65
EU Financial Perspective For the years 2007 – 2013 (in 2004 prices; Million Euros)
2006
2007
2008
2009
2010
2011
2012
2013
Sustainable Growth
47.582
59.675
62.795
65.8
68.235
70.66
73.715
76.785
Natural Resources
56.015
57.18
57.9
58.115
57.98
57.85
57.825
57.805
54.279
55.259
55.908
56.054
55.859
55.666
55.853
55.497
Agricultural Markets
43.735
43.5
43.673
43.354
43.034
42.714
42.506
42.293
Rural Development
10.544
11.759
12.235
12,7
12.825
12.952
13.077
13.205
Others
1.736
1.921
1.992
2.061
2.121
2.184
1.972
2.308
Citizenship
1.381
1,63
2.015
2,33
2.645
2,97
3.295
3,62
11.232
11,4
12.175
12.945
13.72
14.495
15.115
15.74
3.436
3.675
3.815
3,95
4,09
4.225
4.365
4,5
Total CAP
EU as Global Partner
Management
Total Commitments
120.688
133.56
138.7
143.14
146.67
150.2
154.315
158.45
% of CAP in total
44.97 %
41.37 %
40.31 %
39.16 %
38.08 %
37.06 %
36.19 %
35.02 %
114.74
124.6
136.5
127.7
126
132.4
138.4
143.1
Total Payment
Payments as % of GNI
1.09 %
1.15 %
1.23 %
1.12 %
1.08 %
1.11 %
1.14 %
1.15 %
Reference: Effects of Adaptations to EU CAP on Turkish Agriculture, Department of Economic and Financial Affairs, 2004. http://dyp.org.tr/Ekonomik ve Mali
Degerlendirme Raporlari/AB Ortak Tarım Politikasina Uyumun Turk Tarimina Etkileri.doc
D.3.3.
Future of CAP
We think that the financial dimensions of CAP, still spending 38% of
the budget of the Union would gradually decrease
as per the EU GDP (Gross Domestic Product). However, considering that the new 10 members are poorer and have
more rural population compared to the former members, it is obvious that CAP would remain as one of the major focus
points of the policy of the Union in the foreseeable future. According to the final decisions of EU, discussions about the
form of CAP between 2013 -20 when the next budget period would start have recently started informally.
However, we might make some qualitative predictions looking at the global trends and other policies of EU:
•
The budget would be constructed in contemplation of providing minimum net aid to the new members and
extending the “transition period”.
•
The rate of priorities in the budget, such as environmental protection, struggle with climate change,
conservation of rural structure, would increase.
•
In case of increase in the global food prices continues, it is possible to start the support system in some
products from the payments rendered for non-cultivation of the lands.
•
In case the Doha Round ends, precautions promoting the increase of agricultural competitiveness would be put
on the agenda.
•
If the veto of France is cleared, the budget of CAP might be frozen; at least a decision to decrease the rate in
the total might be taken.
•
It is possible that the financial bottleneck in EU would cause radical changes on the CAP. However, since longterm budget priorities of EU after the crisis are not determined, we abstain from any and all speculations.
D.3.4.
Turkish Agricultural Policy and CAP: Harmonization and Conflicts
While examining the effects of CAP on our agriculture, it would be useful to clear some misunderstandings. Even if the
agricultural products fall outside the Customs Union Agreement which regulates our commercial affairs with EU, two
partners have decreased the barriers they imposed upon each other in time with several supplementary agreements.
After 1996, Turkey has been implementing a tax free import regime or import regime with lower tax to the 33% of the
66
agricultural import from the EU. EU applies “negative list” to Turkey, according to which the import of products is set
free, excluding 23 products, or is possible with lower taxes compared to the countries out of the Union.
The commitments that Turkey would fulfill during the EU membership process are determined by the Accession
Partnership Documents (APD), frequently amended. The last APD was signed in 2008 and harmonization related to the
short and long term agriculture was widely included in this ADP. According to the APD, Ankara undersigned these
commitments in the chapters (headlines) related to the short term agriculture:25
Chapter 11: Agriculture and Rural Development:
•
An IPARD agency, accredited as per the EU requirements, should be established.
•
The restrictions on the meat and livestock import should be abolished.
Chapter 12: Food Safety, Plant and Animal Health:
•
A framework law regarding the food, feed and veterinary medicine issues as per the EU requirements should
be accepted.
•
The operability of the system for determining and registering the great cattle animals and their movements
should be guaranteed and an appropriate system for following the movements of sheep and goats should be
started.
•
The necessary precautions should be taken enabling the recognition of Thrace region by the World
Organization for Animal Health as a region, free of vaccination and foot-an-mouth disease.
•
A national program - for the classification of all agricultural food premises based on the European Union
Legislation and improvement of these premises - should be prepared.
Chapter 13: Fisheries:
•
Especially, by establishing a unit responsible for all fisheries issues, administrative structures should be
strengthened. Special emphasis should be placed on strengthening the control and supervision services of
fisheries.
•
Law on Fisheries - revised as per the EU requirements, including the resources and fleet management,
investigation and control - should be accepted.
Medium term harmonization priorities of Turkey are listed as follows:
Chapter 11: Agricultural and Rural Development:
•
For transition to the control of the agricultural lands, definition of land and the System of National Registry of
Farmers should be continued.
•
In order to ensure application of agricultural-environmental precautions in the future, preparations for the
application of pilot projects related to the environment and rural land should be started.
Chapter 12: Food Safety, Animal and Plant Health Policy:
•
Control mechanisms should be developed for animal health; eradication plans for the cases required by the
animal health should be made.
25 Reference: The informal translation of the decision of the Council related to the principles, priorities and terms of the Accession Partnership with Turkey and
modifying the decision numbered 2006/35/ec, published in the Official Journal of the European Union dated February 26, 2008.
67
•
Laboratory and control capacities on the animal and plant health, especially concerning the reference
laboratories, residue tests (including control plans) and sample procedures, should be strengthened.
•
Regulation on the Transmissible Spongiform Encephalopathies-TSE and animal side products should be
harmonized and necessary collection and treatment methods should be developed.
Chapter 13: Fisheries:
•
In order to submit correct information to sea sources, a trustable stock evaluation system should be
developed.
•
The current fleet registers should be adapted according to the EU standards.
Although some steps are taken relating to the harmonization priorities included in APD and National Programme,
according to the TOBB’s (Turkish Union of Chambers and Commodity Exchanges) Report (2009) and web site of Ministry
of Agriculture and Rural Affairs (2010), Turkey has not yet completed the required studies listed below:
In the field of Agricultural and Rural Development;
•
Establishment of an IPARD Agency (there are total 8 regulations related to Turkey, 7 of which is in force),
•
Improvement of Land Definition and System of National Registry of Farmers (there is 1 regulation related to
Turkey, none of which is in force),
•
Preparation of application of the pilot activities related to environmental and rural regions concerning the
future applicability of agricultural environmental precautions
(there are total 4 regulations, all related to
Turkey and all in force),
In the fields of Food Safety, Veterinary Medicine and Plant Health;
•
Acceptance of a framework law which is harmonized with the EU requirements about the food, feed and
veterinary services issues and which may transfer the EU Acquis , (there are 6 total, 6 current, 6 Turkey
related regulations),
•
The start of the operation of an appropriate system for the identification and registration of great cattle
animals and their movements and a system related to following the movements of sheep and goats as per the
EU Acquis, (there are 3 total, 2 current, 3 Turkey related regulations),
•
The necessary precautions required for the recognition of Thrace region by the World Organization for Animal
Health as a region free of foot-an-mouth disease (there are total 1, 1 current, 1 Turkey related regulations),
•
The preparation of a national program for the classification and improvement of all agricultural food premises
based on the Union Acquis (there are total 2, 2 current, 2 Turkey related regulations)
•
The development of eradication plans, control precautions against animal diseases (there are total 30, 24
current, 30 Turkey related regulations),
•
The development of the laboratory and control capacities in the fields of food safety, animal and plant health,
primarily the reference laboratories, residue tests and sample taking operations (there are total 4, 4 current, 4
Turkey related regulations),
•
The harmonization with the regulation related to the Transmissible Spongiform Encephalopathies (TSE) and
animal side products and the start of establishing necessary collecting and avoidance systems (there are total
2, 2 current, 2 Turkey related regulations),
68
There are major differences between the Rural Development Plan pending before TBMM (Turkish Grand National
Assembly) and the CAP and complementary regulation about the agricultural supports.2
For example, while CAP is
progressively quitting support corresponded to product and production, Turkey brings this method back (see. Part B.7)
The Rural Development Plan, as the CAP, also examines the rural population and lands together as framework however,
considering the budget and human resources limitations as well as the deficiencies of the plan, it seems difficult to be
put into effect in short term.
Shortly, Turkey’s complete harmonization with CAP would be difficult and result in changes in agriculture which might
be considered as radical. The fact that Ankara has limited staff and budget opportunities to successfully manage this
process of change and the perception of the society for the reforms as “being done due to the external pressure” can be
seen as a factor increasing the problems and failures.
D.3.5.
Cost Analysis, Winners and Losers
In the discussions about Turkey’s membership to EU, one of the mostly used rationales is the opinion that we would
obtain a great share from the CAP due to higher rate of rural population, low level of income and non-productiveness in
agriculture. The EU Commission exercising the first official study on this matter, in its report 2004, in the scenario of
membership/complete transition in 2015, has calculated that Turkey would cost 8.2 billion Euros to the agriculture
budget, 27.6 billion euros to the total budget; however the Commission has not shown any reference.
The most comprehensive study - we have – is related to the year 2006 (Assist. Prof. Emine Bilgili, 2006, Possible Effect
of Turkey’s membership on EU’s Budget). The figures from several references are listed in the following table:
Estimations about the Effects of Turkey's Membership on the EU's Budget
Study
Contemplated Year
Method
Annual Transfer
Flam (2004)
Current System (2000)
Togan (2004)
Huges (2004)
Current System between
2015 and 2017
regression
based
on
voting capacity, level of
income
and
current
expenditures
regression
based
on
voting capacity, level of
income
and
current
expenditures
the amounts compared
to the income per capita
of Bulgaria and Romania
and 4% limit of GDP for
structural funds
European
Commission
DG-Agriculture (2004)
calculations according to
the current rules
Grethe (2004)
Current
System
and
reform scenario in 2014
Zft
Model of Simulation
Calculations according to
expenditures
and
payment shares of EU15 member countries
Dervis, Emerson, Gros,
Ulgen (2004)
CAP-cost value
comparative rate
added
Net 12 billion Euros
Net 14 billion Euros
Gross 11 billion Euros in
2015 and 19 billion
Euros in 2017
Gross only agricultural
expenditures 8,2 billion
Euros
Current
situation:
in
2014 net 10,9 billion
Euros; CAP reform, net
6,8 billion Euros
Net 8,2 billion Euros
Net transfer 2015: 18
billion Euros
Among the studies carried out since that date, Grethe’s findings are the most detailed and convincing ones. Grethe, in
his studies, considers both the current system and the foreseen future CAP reforms and the developing structure of
agriculture in our country as much as possible. According to Grethe, the cost of Turkey to CAP is shown in the table in
69
different scenario. In the direction of the strategy of limiting the budget of CAP and extending the transition of new
members to the step of complete support, which the EU has adopted in recent years, we find the minimum costs more
realistic. Under these circumstances, we find it difficult to accept the thesis that the share which Turkey would take
from the CAP’s budget and the EU’s budget in general during full membership and afterwards the transition process
would cause very radical problems in the economy of the Continent. Probably, the share that Turkey would take would
even be less than the share of Poland.
The EU's Incomes and Costs resulting from the membership of Turkey to the EU
(The Scenario of Decreasing the Direct Payments) (Billion Euros, in 2004 figures)
2015
Total
2025
25% of DP
Budgetary Expenditures
Common Agricultural Policy(CAP)
Direct payments
3.8
0.9
2.4
Second Round
1.5
1.5
2.0
Other policies
1.0
1.0
1.0
Total CAP
6.3
3.5
5.4
7.7
7.7
till 25.6
Structural policies
Other expenditures
Total expenditures
1.6
1.6
1.6
15.6
12.7
till 32.6
5.2
5.1
7.8
6.1
6.0
11.0
4.4
4.3
5.5
10.4
7.6
till 24.8
4.5
1.7
2.9
9.3
6.5
till 31.4
4.0
1.3
1.9
11.3
8.6
till 19.6
4.9
2.1
3.8
Turkey's contribution to the budget
Basic assumption
Growth making up the difference
Slow growth
Net transfer to Turkey
Total (basic assumption of growth)
Resulting from CAP
Total (growth making up the difference)
Resulting from CAP
Total (slow growth)
Resulting from CAP
Despite this cost, it is upsetting to see that the wide contribution of Turkey to the EU agriculture in several dimensions
such as fruit, vegetable, medicinal herbs and bio-diversity has not been considered in any of the studies. In the sense of
biodiversity of resources and self-sufficiency thesis, which EU embraces more every day, in every field from energy to
agriculture; market prices and social benefits to be brought by Turkey should be decreased from the cost of Turkey to
the CAP.
However, how much would it cost to Turkey to conform to the CAP? We noted that surprisingly few researches were
made on this matter. Almost all of the references that we have are based on the same three researches. These are
made by Akder and Ark. (1990), Ertugrul (1992) and Cakmak and Kasnakoglu (2001). In the studies, the cost of CAP to
the sector of agriculture is assessed with the effect on the consumer welfare. Cakmak (October 2007) who brings
simulation farthest, in his evaluation; has foreseen three scenarios including; status quo would be kept in Turkey – EU
relationships in 2015; and customs union would be widened including the agricultural products and the full membership.
In the scenarios, when we chose the most realistic assumptions and the CAP payments, and eliminate the scenario full
membership, it becomes apparent that increases in welfare remain as limited as to be measured by 2-3%.
70
Due to the frequently changing agricultural goods and food prices, EU’s quickly evolving policies and reform applications
which have started to give results in our agriculture and finally the interest which the private sector has started to have
in the agriculture, it is not possible to make a more substantial estimation.
At first sight, in case of full membership to the EU, our considerations about the loss and gains of Turkish agriculture
correspond to our findings related to the results of WTO (World Trade Organization) Doha Round. While having
advantages only in Mediterranean plants except for cotton, fruits and vegetables, Turkey would have to increase the
import of grains, oily seeds and red meat. The productivity table per land in 2003 given below also supports this
qualitative finding.
Productivity of Some Products in Turkey and EU 2001 / 2003 average. (100 kg / ha)
Turkey
Turkey
EU- 15
EU – 25
Turkey/EU 15
Wheat
20.4
64.2
56.6
31.8
Cotton (unseeded)
35.5
30.5
Barley
22.4
44.9
41.8
49.9
Corn
43.6
85.8
73.8
50.8
Sunflower
12.1
16.3
16.7
74.2
Sugar beet (ton/ha)
4
8.7
116.4
45.8
Potato
259.2
353.9
264.6
73.2
Reference: DIE (State Institute of Statistics), Agricultural Structure (Production, Price; Value), Several Years;
European Union
However, all of the analysis that we have are extremely at macro level, and do not consider the possible evolution in
agriculture in the next 10 years, which we foresee as the harmonization process of Turkey with the CAP. Due to their
structure, the models which calculate the loss and gain of Turkey from CAP use macro data. For example, variants such
as wheat harvest per hectare or meat obtained from the average great cattle animal are used. However, Turkish
agriculture shows structurally great variations. We may gather this variability in two dimensions. The first is the farms
engaged in traditional agriculture and modern agriculture (Agro economic policy analysis of the new member states, the
candidate states and the countries of the Western Balkans), the second is factors such as soil productivity and accession
in grazing land.
We think that farms engaged in large scale intensive agriculture may compete with most of the EU countries when the
complete harmonization with CAP is achieved. As most of the farms engaged in traditional agriculture are engaged in
production for their own consumption, they would not suffer much from the freedom of import. In parallel with this
observation but with less confidence, it seems possible that large scaled livestock breeding competes with EU.
The second difference arises from the fact that the productivity of our lands differ greatly from region to region. By
supplying the minimum scale economy in wetland and deep soils, competition with EU in many products seems to be
possible. Possible loss would center upon the marginal soils, their owners would either migrate to urban or shift to much
more productive products.
In conclusion, even for the products that we fall behind of the EU in average productivity, it is possible to compete
locally. From this point of view, we have determined that the estimations related to the social damage of harmonization
with CAP are required to be revised and the potential opportunities are overlooked.
Secondly, the positive effects of many irrigation and improvement projects newly started to be operated, primarily the
GAP (Southeast Anatolia Project) are not taken into consideration. In GAP region where there are lands with larger
71
surface area, it is possible to harvest some of the products five times in two years. With the irrigation projects promised
to be completed in 2012, the amounts of soil with a huge increase in productivity, would quickly rise and also increase
the average of agricultural productivity. In parallel with this observation, it is possible that the projects of combining the
lands and giving land to a landless farmer that the government puts into effect - even if just a bit slowly - also increase
the productivity per unit.
Organic agriculture is a subject, required to be kept completely out of these generalizations. Turkey is the country
which has the largest lands suitable for organic agriculture within the environment of EU. Currently, a very small part of
this potential is being used, the share of organic agricultural products in the total agriculture import is only 0.2%.
Organic agriculture is not a fashion. It is the reflection of the healthy and environmentally- conscious food consumption
in the entire world, increasing for several reasons and may provide great benefits to Turkey in the future. We would
mention the importance of organic agriculture in many aspects, in the investments part.
In fruits, vegetables and Mediterranean products, medium level of gains seems to be possible.
Perhaps, the most necessary point to be considered is that the CAP is a policy which includes not only the price but also
the priorities in many fields such as the environmental protection and the protection of rural structure. It seems
possible that in Turkey, farms which combine these priorities in production gain benefits and proceeds much more
beyond and out of these generalizations, rather than the competition in agricultural product. We think that it is possible
to access in the EU’s rural development funds as well as the current funds on many subjects such as protection of
history and bio-diversity by combining the themes of agriculture, environment, history and alternative tourism. We
would study this opinion in more details in the Investment Themes Chapter.
D.4.
TURKEY AND WORLD TRADE ORGANIZATION
The two most important external limits on Turkey’s foreign trade of agricultural raw materials and processed products
are European Common Agricultural Policy (CAP) and World Trade Organization regime. These two variants would also
have important effects on our country’s agricultural policies, product composition and consumer prices in the next years
by import. In the previous part we have analyzed the Common Agricultural Policy of EU that we hold negotiations of
membership and its effects. In this part, we analyze the role of Turkey in WTO which we believe to be more
comprehensive in the long term. After definitive chapters, we have researched how the decisions that WTO has taken
and would take after the Uruguay Round and the ongoing Doha Round would affect the foreign trade and the production
in our trade.
The Agricultural Foreign Trade Policies in the world have been discussed by the economists and politicians for 500
years. The most correct agricultural policy and foreign trade regime have been determined neither theoretically nor
empirically. In this discussion, if we eliminate the socio-psychological effects, it is apparent that two different opinions
appear. The first one puts forward that agriculture has a special role in a country’s economic life, therefore is required
to be subject to protection and/or special rules of trade in order to provide a series of priorities such as decreasing rural
poverty, food safety and self-sufficiency. The contrary opinion asserts that agriculture being subject to the similar rules
with the other sectors and to be quickly liberalized / opened to competition according to the classical theory of relative
advantage would increase the social welfare.
In practice, as the power to create soil suitable for agriculture, climate and natural productivity, technology, the balance
of rural-urban population and migration dynamics of countries are different from each other, the appearance of a
universal truth and its adoption by all of the global actors of trade has not been possible. By time, an agricultural trade
regime, according to which the policies of the dominant ideology or the Hegemonic State are imposed to the entire
world, has arisen.
72
In the first half of 20th century, due to the ideological grounds and the dominant attitude of the USA, the concept of
protectionism and export subventions have determined the regime of trade. Protectionism is defended by a great
majority of the developing countries for several reasons. It is noticed that a small group of prosperous countries,
notably the Japan, have been acting according to this opinion in order to satisfy the social requirements rather than the
economy. In 1980’s, tensions reaching the dimension of subvention wars have started between the EU and the USA
who have now agricultural productions much more than their own needs. With the Uruguay Round, again with the
leadership of the USA and the EU, the world has quitted these policies and turned towards liberalization trends in
agriculture.
D.4.1.
GATT and WTO
One of the most important harmonization institutions after the 2nd World War is GATT or as it is now named, WTO. This
institution, started to operate with a very limited number of members and balanced priorities, is now the UN (United
Nations) of the global trade regime with its approximately 200 members aiming at closely being involved in many fields
such as preventing unfair competition relating to intellectual properties, elimination of the obstacles for the direct
capital investments. Two contrary trends stand in front of finding solutions for all trade problems before WTO and this
institution’s being the sole rule maker in global trade.
Regional trade blocks, which now might be seen all over the Earth named as “clustering” notably the EU and NAFTA
consist the first of these; their primary objective is to protect the interests of the members within the group against
damages that the “external world” would experience.
Since 2000’s, all balances are defined again, as China, Russia, India and Brazil (BRIC) have joined to the world trade.
Among the group of BRIC, especially China and India quickly start to guarantee their long term interests through
bilateral trade agreements. The USA and EU, even more limitedly, continue concessionary trade with their former
colonies or their own political ascendancy fields. The expansion of bilateral agreements to the detriment of WTO, brings
along the concern of setting the global trade trends over mutual preferences rather than the public benefits. However,
all bilateral agreements do not have these characteristics. The agreements which do not offer privileges provided to the
other party with higher trade barriers implemented to the other countries, even sometimes presenting to the entire
Earth on product basis, although they are in minority, facilitate to approach to the Pareto optimal balance.
D.4.2.
Political Position of Turkey before WTO
While examining the trade relations of Turkey with the world, it is significant to understand that each step to be taken
in agriculture should be in the direction of harmonization with both the global trade regime (WTO requirements) and the
“clustering” that is the CAP.
Turkey is passive against CAP. That is Turkey has no right to speak on the reforms and applications. Its effectiveness is
limited due to its obligations of both protecting its own interests and acting collectively with the CAP. Therefore, in spite
of being one of the outstanding members of the most popular cluster of developing countries such as G33, it may not
be considered as successful in determining the global trade policy. For example, while the important sections of Turkish
agriculture are still in need of protection, Turkey, compulsorily, has to support the EU’s opinion of mutual liberalization.
In parallel with this observation, the free trade and customs- tariff agreements, which the EU has signed with third
party countries without consulting Turkey, put Turkey in a difficult position.
73
D.4.3.
Uruguay and Doha Rounds
Until Uruguay Round, GATT / WTO has played the role of a forum of taking co-decisions and bargaining towards the
liberalization of foreign trade in industrial products. In the Uruguay Round, the agricultural products are included within
the scope of bargaining for the first time. Although the decisions taken at this Round are binding, it did not impose
great obligations upon the developing countries. From the point of Turkey, during and after Ozal’s period, which
adopted the freedom of trade in the import substitution model in 1980’s; the economic results of this Round are of
secondary level. However, this Round by adapting the principle of agricultural trade together with the industrial
products, which constitutes the most significant subject of discussion in the 21st century, has ignited the wick of the
ongoing Doha Wars. There exist 3 leading decisions made in the Uruguay Round:
•
Rules and institutions are established in order to solve before WTO the trade conflicts arising from agricultural
products.
•
By abandoning complex protectionism applications in agriculture, it is decided to shift to customs duties for
the industrial products.
•
It is determined that member countries would no longer increase the tariff and non-tariff barriers in
agriculture, even the countries would decrease the aforementioned barriers, but not to be so binding.
Although Turkey has increased customs duties for some of the agricultural products after Uruguay Round, it has not
been suffered from the new rules; because it adopts the strategy of increasing the actual tariffs up to the maximum
limits that are set by Uruguay when it moves down to a lower band (one-down box), by determining very high customs
before Uruguay, as did by many agriculture countries. Turkey has one or two inconsiderable conflicts besides the
conflict with the USA on the rice import; and the effect of these conflicts on agricultural trade is of second degree. In
conclusion, it may not be stated that we suffer from the settlement mechanisms set forth by Uruguay Round.
Doha Round, which started in 2000, has not been concluded yet; and it also seems difficult to be concluded until 2013 –
2014. We find a strong analysis of non-conclusion of Doha Round in Fredrik Ericsson (2008). According to Ericsson,
•
Lack of leadership
•
Confusion of priorities resulting from the high increase in the number of the members
•
The damages of the wide approach stipulating the transition to the discussion of the trade problems of the
entire world from the narrow approach regarding annulment of protectionism only in industrial products.
•
The erosion of the doctrine of free trade as a concept prevents conclusion of the Round.
However, the possibility of the conclusion of the Round with failure is quite lower, this is because quitting the
establishment of a global trade regime directed by the rules and returning back to a bilateral – in group world trade on
to the chaotic and globalization trend before II. World War would be a great loss the costs of which may not be covered.
With the assumption that agricultural trade directly affects the welfare of the most of the people in the world, we
determined that abandonment of this chapter constituting one of the three pillars of the Doha Round conflicts is a result
which the world leaders may not risk. Thus, we kept our way assuming that the Round would successfully be concluded
and the current agreed agricultural chapters would be accepted exactly.
Unlike the Uruguay Round, IF Doha would be concluded in the agreed form according to the latest information that we
have, it reveals that Turkey would “suffer” both theoretically and empirically. Before we understand its reasons, we
hereby list three priorities of the Doha Agricultural chapter:
74
•
Arrangement of the conditions to penetrate into the market
•
Abolishment of export incentives and credits to a large extent
•
Decreasing the agricultural customs barriers and duties to a significant extent.
Due to the lack of resources, Turkey has considerably decreased the amounts of payments by reducing the export
incentives for approximately 40 products. We consider the damage to be caused by the acceptance of this part as
limited. However, as we look from the point of partial comparative static analysis, shocks may occur in livestock
breeding due to the arrangements of conditions to enter into the market and in most of the fields of agriculture due to
the decrease of customs duties. From the perspective of a more dynamic general balance model, the obligations of the
countries we trade with to implement the same facilities, may create opportunities.
After the scanning that we did among the portals of Agriculture-Farming in order to find out what will change
concretely, we have made the list below;
•
Production of grains (wheat, barley, oat, rye, corn, unshelled rice), oily seeds (sunflower, soybean, rape)
forage plants, cotton, sugar beet, tobacco, tea plant, banana would change in favor of import.
•
Adverse effects which may be extended to “very radical” are possible in animal products such as red meat,
milk, cheese and honey.
•
It is highly possible that products with lower prices would enter into our country due to elimination of quotas,
decrease of the custom duties and increase of the product costs as the premium rates are decreased in some
products (sunflower, soybean, corn, unshelled rice and rape) which we pay premiums.
•
However, it is projected that there would be no inconvenience relating to products such as vegetable, fruits
(especially hazelnut, dried figs, grape and apricot) legumes, olive and olive oil, cut flower, fish and white meat
and egg.
In the aforesaid negotiations, developing countries have been trying to keep some of their products within the scope of
support by presenting concepts such as “sensitive product, special product”. Classification of the products into three
boxes in respect of internal supports and discussion according to this box method has been the most preferred method.
As mutual concessions - about the “box issue” which does not exist in the spirit of the discussion but every line of which
has been discussed for days, are valid, our assumption of “chapters accepted till now” may not also be realistic.
However, the chapters accepted on the issue date are valid also in the empiric studies, the results are also related to
these.
According to the most comprehensive qualitative research, in the simulation executed in nine sectors’ details by using
the calculable general balance model, Turkey’s loss and gains are summarized as:
Turkey’s Loss and Gains
Agriculture
Current Regime
Doha Simulation
Export
5.327
5.239
Import
4.106
6.291
Net Export
1.221
-1.053
Reference: Dr.Yasemin Cırpıcı, WTO Agricultural Negotiations and Its Effect on Turkey’s Foreign Trade
More concretely, according to the findings of the simulation, in the event that the liberalization criteria set forth by WTO
are adopted, the prices of import products would decrease by 11%, agricultural import would increase by 35%. The
equivalent detail tables for export are presented in the report.
75
E. Financing of Agricultural Investments;
Experience of Turkey and World
76
E. FINANCING OF AGRICULTURAL INVESTMENTS: EXPERIENCE OF TURKEY
AND WORLD
E.1.
POSITION IN TURKEY
In this part, financial and direct –even if in brief- investments in agriculture are mentioned. According to the findings of
international institutions such as FAO (Food and Agriculture Organization), as an investment of 1 dollar in agriculture
returns to the villager as an investment of 2 dollars, increasing the agricultural investments would decrease the poverty
which is still a structural problem in the countryside. Furthermore, even if we may not state in certain figures, we
estimate that in case of increase of the investments in agriculture, productivity problem in agriculture would be solved,
such increase would contribute to decrease the speed of migration from country to town and Turkey would be able to
take giant steps in the agricultural raw materials and food which are expected to be the most valuable commercial
goods of the 21st century.27 If we examine this prediction in detail, we think that in case the correct and adequate
investments are realized; a significant barrier in front of Turkey for becoming one of the largest food exporter of the
world would be removed.
In our research, we have determined that an agricultural society consisting of premises owning land property most of
which are very small (sufficient enough for self-subsistence) may not make investments in huge amounts. Even though
we do not have certain figures, farms engaged in large-scaled agriculture also makes less investments compared to its
kinds. For example, we describe - as an investment deficiency- failure to reach the EU-USA standards of cattle carcass
even in the large scale premises and to shift to the products which would be more productive when considered the
quality of the soil.
In summary, a very small part of the agriculture sector’s value added rate in GDP is spent on new technology, R&D
(research and development) and product increase investments. In this concept, it is necessary to state that Foreign
Direct Investment (FDI) entries tending towards agriculture sector (including food) till now are very limited. In order to
state in figures, the entries to agriculture and food sector were around 600 -700 million dollars in 2005 and 2006 then,
reached 1.2 billion dollars in 2007. However, if it is considered that FDI was around 20 billion dollars in this process, it
is seen that the rate of entries to the agriculture and food sector remains low. FDI to the sector in 2007 –reached the
level of 8.5 % - the highest in history- but comparatively still very low- with the effect of the fact that FDI decreased to
14 billion dollars from 19 billion dollars one year ago. In 2009, it has regressed to 200 million dollars – 2% - 3% of the
total.
With regard to the role of the State in agricultural financing, the State is not able to make many investments in
agriculture with its limited resources. We do not state this observation as a criticism. While the lower rate of savings in
Turkey in general keeps the public borrowing interests high in real terms, taxes may not be collected in adequate
amounts due to the unrecorded important sections of economy. The limited resource remaining after the daily
management of the State is spent either with the direction of the social pressure groups or to debottlenecking
investments.
In spite of these conditions, we note that public has been making great sacrifices in order to convey major investments
such as road, water, electricity, health and education. Besides, the public has been performing extraordinary efforts in
27 It is difficult to calculate the effect of correct investment on productivity increase with the public investments-agricultural production increase data. Perhaps,
anecdotally, the feedbacks of the GAP investments can be the best example. However, while searching this part, we have studied case studies in most of the
continents of the world. It seems that the effect of “correct” investments made by both the state and charity organizations or public sector on production and
welfare of the farmers has been proved for hundred times.
77
order to provide source for giant long term irrigation projects in many regions (where the returns of the capital
investments are too far) primarily the GAP. The governments are open to criticism, as they do not use their resources
in effective ways; however, even under the most optimal circumstances, it is very difficult that public would transfer
much more funds than now to the development of agricultural production from its own resources.
In recent years, with the dampening of inflation and decrease of public borrowing/GDP rate, private banks preferring to
direct the remaining part of their portfolio to credits are also interested more closely in agriculture. However, for
commercial banks, it seems more rational to direct towards quickly growing consumer credits whose risk measurement
cause less problems rather than agricultural credits. That is, we foresee that agricultural credits would grow in time, but
continue to take a very small share in total system assets. As a matter of fact, it is observed that the share of
agricultural credits among all credits is quite lower such as 3%, with the nominal amount of TRL 9 billion as nominal by
the end of 2009, around 12% of the sector’s nominal added value. Furthermore, it is important to state that
approximately 80% of this credit is issued by the Ziraat Bankası (Agriculture Bank); according to the figures of the
Agriculture Bank, approximately 50% of this credit goes to plant production.
Public, together with Bank, EU and other supra-national institutions, produces projects providing support to agriculture.
In the event that project producing - the bottle neck of Turkey in this field - and coordination between institutions are
enhanced, it is probable that our country accordingly our agriculture would have greater shares from this global cake.
Even though it is very limited, the fruit-vegetable trade and attractive opportunities provided by GAP have directed a
few industrial holdings to agricultural investments. Even under the best circumstances, among the 500 biggest
companies of Turkey there are a few companies which plan to grow in agricultural and food industry. The great majority
are interested in more “attractive fields” such as automotive, energy, logistics, and civil air transport.
Micro-credit applications, defined as the greatest innovation of agricultural financing of 2000’s, have been applied in a
very limited but successfully in our country. More substantial evaluations on this subject would be carried out in the
following parts.
As a summary, compared to 1980’s, trend of financial investment in agriculture has considerably increased, however
not reached the quality to make a considerably effect on the dimensions of agricultural production.28 Secondly, we have
determined that many agricultural financing methods quickly increasing in 2000’s haven not been applied yet in our
country, or the institutions which apply these methods have not started investments. In the following parts, firstly these
new financing methods would be introduced, and then the contribution of these methods to agricultural production and
welfare in developing countries like us would be analyzed with chosen case studies. Finally, suggestions for the
application of these methods to Turkey are listed.
E.2.
MICRO-CREDIT REVOLUTION IN THE WORLD
Since 1990’s a rural micro-credit revolution has been seen in the developing countries. The transformation of this
concept firstly put forward by Ela Bhatt the SEWA leader of Gujarat State of India in 1970’s into global practices is
referred to the founder of Grameen Bank and 2006 Nobel Peace Award winner, Muhammed Yunus.
Guarantee and solvency are not required in the macro-credits which abolish the rules of traditional banking. The only
requirement is that the person has production ability and an idea to turn it into a sales activity.29 Besides, credit is
issued to the person however the social group which the person belongs is held severally liable for the credit. The idea
behind the macro-credit is the opinion of traditional risk evaluation criteria and compensating the increasing risk of
default in repayment by higher interests crates a credit bottleneck in the low income groups working collectively and
28 In other words, there is a close relationship between the low added value that agriculture provides and limited financial opportunities that is provided for
agriculture, including foreign investment. Even though it is not right to interpret this relationship as a cause and effect relation, we think this matter shows
parallelisms with macro scale researches which set close statistical relation between financial development and economic growth.
For a comprehensive study about this subject see. http://www.ecb.int/pub/pdf/scpwps/ecbwp787.pdf.
29 For more detail and applications in Turkey: http://www.anatolianartisans.org/pdf/MicrocreditArticle_Web.pdf.
78
living in the third world. In other words, as traditional credit allocation and pricing mechanism do not work in the subcultures whose ethic of debt repayment is very high, there are many unemployed people who may be saved from
poverty with small credits.
The return rates of between 96-98% in most of the countries, where macro credit has been implemented, excluding a
few small exceptions, points out an “entity quality” which embarrasses the largest bank of the world. The current total
macro-credit amount in the world is estimated to be around 38 billion dollars.30
The photograph of micro credit may be briefly reflected as:
•
In 2010, investors would put 20 billion dollars of fresh money on the micro-credit funds.
•
According to the latest data that we have, the total of micro credits between 2001– 2008 has ascended to 38
billion from 4 billion.
•
However, the need for micro credit financing of the people with minimum income is still around 250 billion
dollars.
The micro-credit application in Turkey started with project credit of 500 million dollars from the World Bank and it has
been distributed by the Turkish Foundation for Waste Prevention.
31
Unfortunately, we could not determine WHY this
credit which is reported by the World Bank to have successful performance did not continue.
According to the latest records32 that we have, as of the year 2009, people over 19 thousand in 29 cities of Turkey have
been granted a credit of TRL 23 million. According to the sources we have scanned33, Turkish Grameen Micro-credit
Program is planning to grant a credit of TRL 40 million. The HSBC’s program of granting credit of 5 million dollars in 5
years in this field at the pilot regions has been announced; however, it may be seen that the credit dimension of 500
million dollars received from the World Bank in 2003 would not be able to be reached for a long time.
The Draft Law on Micro Finance, which would formally introduce the micro-credit granting institutions into the financial
system and provide the necessary state guarantees/supervision, is still pending before the agenda of Turkish Grand
National Assembly.
34
We have not still found an answer to the question why this program -resulted in perfect
conclusion not only in the world but also in Turkey - does not have adequate state and international support.
However, it is also not right to think that micro-credit would be a remedy for all of the problems in the agricultural
sector. The basis of micro-credit is to reconstruct a section that is unable to reach traditional and other financing
sources by involving them in the production process. For example: If a female entrepreneur in Turkey, who weaves
carpets by buying a weaving loom with a credit of TRL 700, becomes successful, and wants to set up 10 weaving looms
with a credit of TRL 70 thousand, micro-credit is no longer appropriate for her. It is the time for that entrepreneur to
look for other sources of financing.
But, are there any other ways which agricultural producers or entrepreneurs may apply other than micro-credit or bank
credit? There is not any in Turkey, but the world is progressing quickly in this field.
30
31
32
33
34
79
See. www.ruralfinance.org.
See. http://www.israf.org/pdf/TURKIYEGRAMEENMIKROKREDIPROJESIBILGINOTU.pdf
http://www.pembepano.com/2010/01/17/mikrokredi-nedir-2009-degerlendirmesi-2010-hedefleri/
See. http://www.alomaliye.com/mikro_finans_kanun_taslak.htm
See. http://www.alomaliye.com/mikro_finans_kanun_taslak.htm
E.3.
COMMODITIES FUTURES35
INVESTMENT TRUSTS
AND
AGRICULTURAL
REAL
ESTATE
The most widespread agricultural financial investment method in the world is the future contracts in commodities. In
many commodities options and forwards are frequently used; however, the instrument which the investors demand
most is the futures. In the middle of 1800’s36, the futures stock,
which has started to operate in the USA in an
organized way (In this research we abbreviate as VOB), is the market place where the people who want to guarantee
the future price of a product meet. Let’s explain this definition.
A farmer in Nebraska decides to cultivate wheat instead of corn in winter. But he has not got adequate information
about what farmers in the other states cultivate. If the farmers in the other states focused on corn, the futures price of
corn would be less than the current (spot price). The farmer who wants to guarantee himself against the risk of low
price, buys a contract which gives him the right to sell a certain amount at spot price in due date close to harvest.
Now, let’s look at the producer from Chicago. He may not have adequate information about the export demand even
cake/pasta/pastry demand that would occur as the wheat product enters the market. His risk is not to have enough
stock in case the demand increases suddenly. If he may profit from the current spot price, in order to provide insurance
against the future price increases, he makes a contract to buy a certain amount of wheat at the current spot price at
harvest date. Both the producer and the wholesale consumer by decreasing the future ambiguity, make a contract
increasing the common satisfaction.
Despite futures markets are established mostly with the purpose of “hedging” (insurance) which we have exampled
above, it is quite normal that the ones not related to wheat or floor trade transact in the market to gain speculative
profit. It is considered that these factors reduce the difference and volatility between the purchase-sale prices in the
futures contracts by decreasing the liquidity. Besides, such speculators are mostly the institutions registered to
Derivatives Exchanges until the last quarter of the 20th century and aim to earn money due to the lack of information.
The continuous increase in the agriculture and food prices breaking out in 2000’s, has also directed the funds which
have become the number one store of value, to the Derivatives Exchanges. These funds are institutions which take
position in Derivatives Exchanges in order to benefit from long term trend of decrease in commodities prices. These
institutions - shortly defined as Commodity Derivative Funds - are considered to cause a serious mobility of prices in
commodities futures, the researchers are far from being accurate. However, it is a more accepted opinion that the
Commodity Derivative Funds do not make a considerable contribution to the welfare of a country or the farmers
marketing a product.
Although we support the Derivatives Exchange and this valuable stock exchange’s becoming widespread in commodities
in Turkey, it is difficult for us to consider the funds, which make investments in agricultural futures as instruments,
which decrease the agricultural production and welfare. The reason is that the share of the producers and wholesale
consumers in open positions and total trading volume decrease in favor of the speculators. In other words, in these
products which have a secondary contribution in production in theory, a significant part of the total welfare income goes
to the speculators as profit.
Agriculture Real Estate Investment Trusts are funds established upon the expectation that prices of agricultural
products would increase in the 21st century and whose primary concern is to purchase agricultural land. The number of
the funds in the USA which make investment in Latin America and in Arabian countries, which collect agricultural
properties in the neighboring countries, is increasing quickly.
35 Even though “Futures” is used for futures contract, this term is not adequately definitive.
36 See http://www.fundinguniverse.com/company-histories/Chicago-Board-of-Trade-Company-History.html for history f CBOT, the first Derivatives Exchange in
the USA.
80
In many countries, it is negatively reacted that the foreign investors purchase land especially with commercial
purposes. It is considered almost as one of the fundamental conditions of union-state that the land belongs to the
people and their representative, the public. However in an economy which adapted the free market mechanism with all
of its sectors and institutions, it is possible that applying a special statute for agriculture may not cause beneficial
results. Therefore, as we do not agree with the opinion “land is private” in this context, we also find it not harmless; but
on contrary a complementary usefulness that purposes, which the State has already been trying to provide directly with
methods such as Agricultural Land Acquisition Office, are realized in favor of the private sector.
On one hand, defending that increasing of Agriculture Real Estate Investment Trusts would accelerate the agricultural
productivity and capital flow to the sector, on the other hand we find it appropriate that alternative collective
investment methods in the financing of agriculture are also implemented quickly.
E.4.
AGRICULTURAL INVESTMENT FUNDS: HISTORY AND FEATURES
Let’s start by defining the concept of fund in general. Funds are investing a savings pool collected from several investors
to various movables and real estates, with beneficiary purposes, by jurisprudentially organized expert institutions.
37
There are 3 major reasons why individuals make investments through funds but not directly;
•
Fund managers have relative superiority in analyzing – accessing the information extremely necessary in
order to obtain much more gain in the investments.
•
It is much easier to realize the basic principle of the theory of financing “distribution of risks” or “don’t put all
of your eggs in one basket” through funds.
•
Investment and brokerage costs of funds governing over the savings of several individuals are much less than
the individuals.
Behind this very brief definition, there is an incomprehensible variety of purpose, structure and method. There is range
from risk-free Monetary Funds which function as a commercial bank by investing the savings of small investors to bank
deposit certificates to Hedge Fund types which invest the money of the investors with high savings to extremely exotic
instruments such as historical artifacts, stamp even aged wine. Only in the USA, there is an asset of 7 trillion dollars
registered as “fund”.
Agriculture oriented Investment Funds, in fact, are with us till the colonial time of Europe. It may be said that East
Indies Company is the first known Agricultural Investment Fund in history causing a nation-wide financial crisis.
However, there are a few limited examples before; Agricultural Investment Fund is the invention of 2000’s. The
departure points of Agricultural Investment Fund and the funds which make investments in agricultural commodities
through futures are the same38. Prices of agricultural products would increase. We explain how it has been reached to
this common opinion below:
•
Population of the world which is still estimated to be around 7-7.2 billion would reach to 9-9.4 billion in 2050.
•
With the assumption that growth of individual income which is the major characteristics of the 20th century
would also continue in the 21st century, households’ expenses in food would increase faster than the
population.
•
Climate change would make net contributions to agricultural production in the first decades, in medium term,
there would be a great handicap due to reasons such as desertification, pollution and drying up of water
resources and rising of the sea level.
37 For the fundamentals of Funds see: http://www.mutualfundsresource.com/
38 However, as we will define below, the results they caused in the sector in which they invested, are quite different.
81
•
Even for the ones who do not believe in the theory of climate change and assumptions, there would be an
essential decrease in the square measure of the land suitable for agriculture due to the factors such as
urbanization, industrialization and erosion.
•
Using the agricultural outputs as bio-fuel may cause bottlenecks in food production.
In summary, the Law of Malthus, an English social scientist in the 17th century may eventuate with a short delay of 350
years: Human population enters into a trend of growth faster than agricultural production. It is almost certain that
agricultural prices would increase in long term without denying the existence of short -term strong fluctuations. As for
2010, we see that these predictions are still valid. Although agricultural output prices decreased in the 2008-2009
recession, the trend has been reversed since the first quarter of 2010; as big purchasers such as China, India and
Russia have emerged from recession.
Besides the predictions that we have listed above, we see that there are other reasons why the funds not investing in
the financial products traditionally have started to have a sudden interest in agriculture.
•
The basic principle of fund management is “to distribute the risk”, that is, to find out new instruments whose
risks and proceeds do not follow the same evolution/rhythm in the specific period of time. Low covariance of
agricultural assets and several sections in the production chain with securities39, constitutes an ideal field for
reducing the risks of funds.
•
It has created a “historical opportunity” for moving towards agricultural investments that the fund industry,
since 1980, has increased know-how of investing in private companies, employed qualified staff in active
management, passive management and saved skills of resource transfer to the formations in smaller scales
even in gestation.
•
Fund management industry is a frontier line of business. That is, it is known that high proceeds in long term
are only obtained at “green meadows” where nobody has gone before. In an environment where financial
sector has almost been saturated, agriculture has suddenly revealed as a very attractive and virgin field.
All these developments are strong evidences regarding that Agricultural Investment Funds constitutes a permanent subgroup (asset class) in this line of business rather than a fashion. However, low global interest as well as credit
redundancy in risky fields, constitute a reason for moving into a field which carries unique challenging risks such as
agriculture. In an environment where the global interest increased again, provided that all long term advantages are
valid, can Agricultural Investment Funds survive? In our opinion, Yes, but the growth rate may decrease quickly.
However, in an environment the fund market is estimated to be at least 10 trillion dollars, and the funds directed
towards agriculture in one way or another to be around 50-70 billion dollars, it seems that Agricultural Investment
Funds would maintain a high speed of growth for a long time.
The major risk for the countries, which promote/give permission for these funds to make investments in the agriculture
of the country, is not that Agricultural Investment Funds are a fashion, but shortening the investment return dues,
increasing the rates of dividend and offering the assets that they have for sale before due date(pro-cyclical).
The funds which make investments in agriculture sector do not have conceptually great differences from the other
funds. Savings of the contributors are collected and placed on specific “investment instruments, and profits, after the
share of the management is deducted, are distributed among the contributors.
However, in practice, there are many differences between the Agricultural Investment funds and the others. These
differences may be summarized as:
39 Nevertheless, the co-variations of commodities futures, transacted on the Derivative Exchanges, with the dollar and petroleum are quite higher; therefore,
use of the same in decreasing risk might not be appropriate institutionally.
82
•
Supra-national institutions such as GOP Development Agencies, Food and Agriculture Organization (FAO),
Organization for Economic Cooperation and Development (OECD), European Bank for Reconstruction and
Development (ERBD) and charity organizations such as non-governmental organizations which do not seek
profits as contributors play an important role in many Agricultural Investment Funds.
•
On contrary to most of the funds, investee goods are agricultural assets, companies or processes not the
securities traded in organized stock exchanges.
•
As a natural result of their investments, Agricultural Investment Funds are included in a sub-group which we
name as “venture cap” or “risk capital”, their managers are ACTIVE investors. That is, they have the right to
speak, even to veto the decisions of the company and institution in which they have invested.
•
The risks, which Agricultural Investment Funds encounter, are much more different than the funds which make
investments in financial markets. Among these differences, there are issues such as changes in public support
policies, seizure risks, local ethnic/clan conflicts and loss of harvest.
E.5.
CASE ANALYSIS ON AGRICULTURAL INVESTMENT FUNDS
Agriculture is long chain of cycles extending from the quality of the seeds to be used, transfer of the vegetable harvest
from the plantation to the markets as frozen, or shipment to processing center and production of food to export. It is
not surprising that Agricultural Investment Funds concentrate on the cycles with lowest risks and highest profits of this
chain. Although there are exceptions, it is observed that Agricultural Investment Funds concentrate on food processing,
logistics and export oriented products. For example, recently, the cool stores for the farmers in order to provide higher
market price by keeping the vegetables and fruits longer, have become an investment gaining more and more
importance. In parallel, grain silos and distribution nets have been increasing their popularities.
From the point of fund sharers, in the funds, which supra-national institutions and charity organizations also receive
share, it is observed that the lowest sections of value added chain have been entered, there are long term-low profit
investments extending from settlement of simple infrastructural bottlenecks to the training of farmers.
Well, Do Agricultural Investments Funds contribute to agricultural welfare? According to Agricultural Investment Funds
in Developing Countries (2010), latest sector scanning that we have, has shown that impact analysis has not already
been concluded completely as the funds in this field are very new.
In the scanning that we have realized within the framework of this research, we have determined that almost all of the
long term investing funds that have been operating long enough to issue final balance has “left a remark in the region”.
Furthermore, it is possible to state that as well as providing welfare to the community in which they have made
investments, they are extremely profitable in that manner; otherwise, why would the giant investment banks specialized in investments of industry, services and financial products sectors in past such as Deutsche Bank and
Rabobank - be involved in this field?
However, we can support our opinions in this field which is too new to provide aggregate data, only with case analysis:
E.5.1.
First Case Analysis: SEAF
The annual report 2007 of SEAF (Small Enterprise Assistance Fund), which is the focus of one of the case analysis
involved in the Agricultural Investment Funds in Developing Countries (2010) report, is very interesting. SEAF which is
a branch of charity organization named CARE, centered in the USA, is still managing an agricultural investment portfolio
of approximately 500 million dollars. According to the findings in the report:
83
•
Investee Small and Medium Size Enterprises provide a large number of employment opportunities for unskilled
or low skilled workers.
•
Furthermore, it contributes too many actors such as Small and Medium Size Enterprises’ suppliers, customers
and even the competitors through Social Security Institution payments and donations.
•
In the report involving Ford Foundation, the Department of International Development, established by England
in order to make investments in Commonwealth Members, and the USA development agency, Agency for
International Development (USAID), it is asserted that every 1 dollar invested in Small and Medium Size
Enterprises create institutional investors consider the agricultural investments as low-risky and high-yielding
and perceived as one of the low priced instruments as a hedge against inflation. The rate of bankruptcy in
agriculture considered to be one of the most an economic activity of 12 dollars.
•
In the event that agricultural Small and Medium Size Enterprises are permanent, workers who become
acquainted with labor safety and increasing incomes, make long term investments extending from taking title
for their properties to preventive child health (vaccine) and education.
E.5.2.
Second case analysis: Agricultural Investment Funds in the USA
According to the research of the web site named Delta Farm Press, agricultural investments by 1,000 private and public
pension funds’ account for about 5% of the funds’ total investments. Although this rate seems to be low; as total Net
Assets of the mentioned funds is 7.4 trillion dollars, the source invested in agriculture is around 370 billion dollars.
According to the information which the web site has obtained, institutional investors see agricultural investments lowrisky and generating sustainable income and one of the least priced instruments as an insurance against inflation. The
rates of bankruptcy in agriculture which was considered one of the most risky investments of the country 25 years ago,
are still at very low levels according to several criteria.
According to the fund managers holding agriculture portfolio, between 2002 -200640, the farmland has provided a
premium of 50%, income from rents of the farmland has been far above the inflation. The Hancock Agricultural
Investment Group (HAIG), one of the biggest Agricultural Investment Funds of the country, is managing 900 million
dollars. Portfolio is distributed almost equally between the lands where row and crops are cultivated. From the point of
Turkey, it is necessary to note that the two most important investment priorities of HAIG are almond and pistachio.
HAIG, managing funds on behalf of other institutional investors gives priority to investments of at least 40 millions, and
aims to gain a yield on income around 20%, at least during a period of 3 years. Almond and pistachio investments of
HAIG exist in the portfolio as well as the potential of export, with the expectation of an increase of demand in future as
it also helps heart health. The estimation stating that agricultural product exports are projected to reach 95 billion
dollars in the country by 2006, also increases the demand for HAIG.
The low rate of leverage in the sector and increase of demand due to new areas of usage such as bio-fuel are new
reasons of attraction.
The investment areas of Agricultural Investment Funds would be very wide. Besides agricultural products, almond and
pistachio hullers/shellers and vegetable processors/instruments have started to become focus of investment.
Agricultural investors also interest in bio-fuel cycling refineries and wind turbines. The most interesting one is that
Agricultural Investment Funds, expanding their horizons widely, have invested 200 million dollars in grape and wine in
40 The reason why we chose this period is, even if it is not the most typical period in the history of finance, that there has been a few number of Agricultural
Investment Funds before and we do not have any information afterwards. The asset bubbles’ profits occurred in 2002-2006 period might be overstated.
However our basic scenario is that farmland, agriculture and food prices will increase above the average in the predictable future due to reasons such as climate
change an population increase.
84
the last few years. In an environment where producing wine from the first cultivated vineyards takes 10 years, this
endeavor is very glamorous. We want to note that formation of Agricultural Investment Funds to invest in qualified
bottled wine in a country with a high potential of wine and rich vineyards like Turkey, would make great contributions to
the export potential.
E.5.3.
41
E.5.3 Third Case Analysis: Actis AAAF-owned by CDD Group plc.
Actis AAFA, managing 4.86 billion dollars as of 2010, providing employment for 88 thousand people through its
investments, generating a profit of 4.3 billion dollars out of an investment of 1.7 billion dollars; is still one of the most
leading Agricultural Investment Funds in the world which maintains support to agriculture and long term investment
projects of developing countries with cooperation of public-private sector.
42
Actis has improved its invested portfolio which started in Africa, to the extend of consumer nondurable goods and even
hotel investment in India, China, and has been continuing to its basic philosophy of maintaining high capital efficiency
while struggling with poverty in developing countries.
E.6.
43
TURKEY AND AGRICULTURAL INVESTMENT FUNDS
We consider the operation and generalization of Agricultural Investment Funds in Turkey to be the one of the ideal
instruments in order to attract both local and international investment, know-how and information.
We listed some of our reasons regarding this matter above. There are still many inter-sections (spaces), which the
state, micro-credit mechanisms and supra-national institutions project credits cannot reach.
•
It is extremely possible in several occasions to increase the productivity with additional investment, to increase
the export opportunities, to move towards planting of more profitable crops as shown by the micro-credit
example in agriculture.
•
In our country we already have a developing culture of fund management and investment through funds since
1990’s.
•
Turkey, as it has been cooperating with supra-national institutions, which are the primary sponsors of
Agricultural Investment Funds for a long period of time, is country known with the wide range of opportunities
that it provides.
•
There are now more than a thousand big funds, intermediary firms and investment banks which make
investments not only in financial markets but also in several fields extending from the direct purchase of small
companies to real estate property. It would not be too difficult that they transfer a part of their investments to
Agricultural Investment Funds.
•
Our country with its political and economic stability and Law regulations although not being perfect but
approaching to the EU standards, provides a relatively less risky environment for agricultural investment
compared to the countries such as Africa and Latin America.
•
Agricultural Investment Fund is an ideal instrument for attracting the attention of giant Charity Organizations,
which give less support to Turkey compared to the other countries, and to solve the problem of poverty,
primarily the Southern and Eastern Anatolia.
However, the barriers in front of the establishment and successful operation of Agricultural Investment Funds should
also be removed.
41 See http://deltafarmpress.com/mag/farming_pension_fund_investments/
42 See http://www.act.is/custom/actis-web/res/editor/Misc/Actis%20AR%202010%20screen.pdf.
43 For whole history of Actis see. http://www.act.is/custom/actis-web/res/editor/Misc/Actis%20AR%202010%20screen.pdf
85
•
As the first priority, these funds should be defined and the conditions of establishment, supervision and
management should be clarified in Capital Markets Board regulations.
•
Rapid conclusion of cadastral works and renewal of titles which have been executed in order to widen the
investment fields of Agricultural Investment Funds is a very significant prerequisite.
•
International experiences assert that application of incentives such as tax reductions, land allocation, increases
the contribution.
At least by referring to such instruments in Turkish Code of Commerce and Tax which is
expected to be approved by Turkish Grand National Assembly, it is considered to be important that
ownership,
decision making, liquidation and tax statuses are clearly stated in order to incentivise the investments.
•
As Agricultural Investment Funds may have non-public companies and may sell out these companies; new
arrangements are certainly required in this field.
•
In general, Agricultural Investment Funds have accomplished much more successful results in the countries
where all public institutions have voluntarily cooperated with them.
•
Public’s giving support to Agricultural Investment Funds through infrastructure investments has considerably
increased the profits.
86
87
F. Appendices
88
ENCLOSED TABLES:
Quantity of Agricultural Equipment and Machinery
1998
Stubble drill(1)
2000
2001
2002
2003
2004
2005
2006
2007
2008
-
-
-
2 139
2 154
2 140
2 186
637
690
743
46 065
98 623
47 608
101 157
50 661
98 924
52 431
100 879
53 157
101 586
54 421
103 812
56 121
100 823
58 076
100 758
58 626
103 125
60 475
103 324
61 198
103 490
Baling Machine
7 884
7 985
8 423
8 562
8 576
8 999
9 072
9 431
10 185
10 998
11 839
Binder
4 721
4 781
5 108
4 987
4 900
5 072
4 557
4 558
4 950
5 039
6 107
12 564
12 563
12 578
12 053
11 539
11 721
11 519
11 811
12 359
12 775
13 084
Brooder
1 554
1 561
1 612
1 572
1 519
1 511
1 487
1 592
1 695
1 644
1 582
Manure spreading machine
1 620
1 433
1 373
1 308
1 707
1 717
1 671
1 916
1 950
1 938
1 967
-
-
-
-
58 069
124 036
142 350
149 792
160 629
182 991
206 307
76 062
80 398
83 852
87 093
93 488
95 604
99 623
103 540
106 627
115 875
122 622
-
-
-
-
15 023
15 993
18 494
19 238
22 205
23 708
24 654
35 851
174
152
37 528
38 291
39 253
36 442
37 960
38 223
39 210
41 745
41 725
41 964
180 614
184 048
188 942
188 604
190 739
191 789
192 700
191 360
198 548
204 665
57 867
348
581
59 476
59 490
58706
62 089
64 076
63 149
64 965
66 801
66 491
66 933
Toothed harrow
352 817
349 158
348 767
348 544
348 911
350 640
351 327
353 205
355 991
353 128
Threshing sled
78 487
73 152
60 665
56 964
53 517
46 417
39 440
36 452
30 477
28 855
27 582
5 397
5 484
5 587
5 814
5 684
5 603
5 749
5 851
6 035
5 315
5 409
320
425
127
406
-
-
-
10 191
10 727
10 621
12 631
12 852
12 900
12 960
308 824
282 997
266 874
242 346
233 708
215 322
207 033
196 278
181 974
170 797
131 040
137 753
138 618
138 625
141 315
141 443
141 961
144 308
146 408
146 615
Animal drawn mover
1 829
1 798
2 046
1 769
2 252
2 155
2 128
2 092
2 071
2 048
1 830
Horse drawn seed drill
2 382
188
505
2 143
1 955
1 739
1 839
1 619
1 515
1 234
1 197
806
750
178 052
152 744
146 768
129 169
152 335
110 486
103 578
91 213
84 304
77 175
-
-
-
19 063
21 441
23 433
26 363
29 798
32 314
33 403
287 503
346 471
Furrow opener plough
Atomizer
Harvester-thresher
Trickle irrigation system(1)
Deep-well pump
Subsoiler
Disc type stubble plough (one way)
Disc harrows (Gobble disk array etc.)
Disc type tractor plough
Hazelnut thresher
Trans planter
Animal drawn plough
Animal or tractor drawn hoe
Wooden plow
Loader (used on farm) (1)
Fertilizer broadcaster
Harrow combination
Combined seed drill
Complete beet harvester
Combined potato harvester
Cream separator
Stubble plough
Mould board type tractor plough
Incubator
PTO driven sprayer
Cultivator
Land roller
Fruit harvesting machinery (1)
Corn harvester
Maize harvester
Corn forage harvester
Electrical driven pump
Engine driven pump
Engine driven sprayer
Portable motor scythe (1)
Reaper
Forage harvester
Hay rake
Cotton picker
Beet lifter
Potato planter
278
240
295 921
297 725
305 587
314 660
320 609
326 599
334 461
339 461
25 588
139
212
26 782
27 409
28 601
23 762
20 604
22 621
22 169
22 374
24 891
24 984
146 715
151 869
153 613
156 361
162 763
166 897
163 577
164 524
169 695
173 654
2 297
2 549
2 858
3 043
2 869
3 056
3 521
3 928
4 029
3 593
3 716
126
300
148
329
312
613
477
515
520
574
591
608
612
288 949
293 170
279 117
255 170
253 086
246 482
239 836
240 295
234 050
230 138
21 001
868
821
21 492
21 367
21 975
25 824
26 536
26 285
26 871
27 045
28 304
29 411
886 887
903 007
902 524
904 197
930 943
947 416
958 228
983 275
986 291
996 013
999
202
101
383
488
918
955
924
951
978
1 008
962
1 062
1 114
1 025
210 300
212 525
219 238
227 963
229 497
239 126
241 753
245 311
255 582
259 475
395 547
402 145
405 025
415 664
421 455
430 074
430 981
443 776
451 214
457 711
57 201
57 533
59 187
61 201
63 493
64 195
66 503
67 322
72 371
75 682
77 445
-
-
-
-
89
122
171
190
265
320
510
5 693
5 767
5 867
5 819
5 888
5 766
5 715
6 262
5 621
5 447
5 433
450
464
472
468
564
542
506
534
588
677
726
2 317
136
990
197
514
2 599
3 408
4 068
5 545
6 327
7 416
8 717
9 734
11 998
14 000
143 560
174 767
151 100
145 023
147 909
155 474
157 873
159 603
167 050
172 022
196 714
196 135
196 682
197 429
197 888
198 407
196 687
197 395
198 735
197 514
65 760
67 048
68 665
69 122
72 831
72 618
72 868
72 838
73 015
71 015
72 171
-
-
-
-
5 261
6 134
7 942
9 974
14 034
17 400
18 785
66 260
66 415
60 625
64 337
68 221
64 434
64 489
64 549
64 972
65 977
69 430
1 348
1 609
1 744
1 830
1 847
1 984
2 017
2 225
2 585
2 853
3 087
67 696
68 601
63 674
64 324
60 476
63 944
64 824
68 132
68 566
70 335
101 958
15
20
17
19
25
31
56
128
349
500
520
7 296
7 956
8 529
8 721
9 237
9 606
10 087
10 757
10 400
10 845
12 927
13 632
8 170
9 249
10 553
10 534
10 813
11 830
11 875
12 217
12 761
13 183
12 521
13 859
14 920
15 435
15 631
15 794
15 637
15 974
16 243
16 802
16 932
Pneumatic precision drill (1)
-
-
-
-
15 770
15 908
20 668
18 633
19 874
22 048
22 919
Rotary tiller (1)
-
-
-
-
6 708
7 187
7 820
8 666
9 097
9 584
9 807
Straw conveyor and unloader (1)
-
-
-
-
8 396
9 218
10 021
10 474
11 687
11 520
11 366
Centrifugal pump
84 271
84 910
85 783
895 584
91 403
92 359
92 821
96 572
97 622
98 762
104 141
Stalk cutter
11 712
12 069
11 232
11 468
12 113
12 170
12 876
13 571
13 881
14 933
15 075
223
550
-
-
-
9 532
10 084
11 902
12 563
12 942
12 980
11 966
226 773
228 945
225 339
193 386
193 963
193 930
197 017
196 346
194 847
192 440
15 771
16 263
16 917
16 261
16 942
16 821
16 212
16 411
15 828
14 993
15 084
3 543
3 665
3 859
3 678
3 893
4 092
4 156
4 310
4 258
4 387
4 390
555
647
152
290
-
-
-
11308
11 582
12 303
12 957
13 434
14 146
14 095
Potato digger
Straw machine (1)
Thresher
Barrow duster and combine sprayer
Seed cleaner
Ridger (1)
Knapsack sprayer
Water tank (used on farm)
Milking plant machine (Stationary)
Milking plant machine (Mobile)
Trailer
Aircraft sprayer and duster
Stone picker (1)
Winnower
89
1999
-
568 160
572 661
577 064
575 154
580 927
580 547
582 618
586 685
587 821
590 590
158 951
158 477
162 410
168 142
171 469
176 576
180 208
184 195
187 727
191 309
5 697
5 763
6 093
7 735
5 522
5 618
5 637
5 571
5 763
5 749
6 216
74 217
886
972
77 911
83 802
89 060
102 616
109 728
121 534
130 087
150 049
908 047
920 222
926 494
945 777
966 596
986 313
995 523
1 011 577
164 051
1 056
128
177 630
1 036
613
54
49
49
50
55
57
58
62
60
61
49
-
-
-
-
276
330
356
373
410
416
422
23 975
23 510
22 425
21 337
17 671
16 627
15 910
15 703
14 082
13 634
13 368
Hole digger (1)
Rotary cultivator
Grader (1)
Duster
30 166
-
-
-
2 066
2 388
2 630
2 894
3 575
4 148
4 340
-
31 296
32 497
32 203
32 413
33 413
33 771
34 895
36 601
37 604
38 937
36 546
902
513
-
-
-
12 690
13 177
14 106
14 843
15 515
16 471
16 502
37 604
36 806
35 776
35 085
34 671
30 924
27 729
24 773
1 037 383
24 522
1 056
128
23 694
1 070
746
Tractor
30 686
924 471
941 835
948 416
970 083
997 620
1 009 665
1 022 365
Tractor drawn mover
81 222
32 670
33 504
34 344
38 222
39 682
40684
42 690
46 213
50 669
54 072
Tractor drawn seed drill
78 538
82 909
84 910
87 861
86 457
89 441
901 71
94 588
101 776
101 633
106 533
Universal Drill
-
79 975
80 914
81 519
65 994
66 216
63 073
62 982
63 392
62 979
62 892
Dryer (1)
-
-
-
-
171
303
392
478
525
587
621
709
5 972
6 100
6 396
6 772
7 163
8 059
Sarter (except seed cleaner) (1)
Sprinkler System
Chumer (1)
Feed spreading trailer (1)
Feed grinder
Groundnut thresher
Groundnut harvester
Source: Agricultural Statistics Summary
(1) Involved since 2002
90
-
-
-
165
697
175 694
178 870
182 307
185 570
188 258
194 055
197 908
200 780
206 014
216 130
-
-
-
-
210 088
234 950
256 621
257 466
265 131
268 237
265 658
-
-
-
-
267
354
508
545
463
605
849
16 158
18 175
19 728
20 057
18 070
18 508
18 604
18 753
19 957
21 435
21 419
50
48
48
45
42
174
156
159
161
210
214
132
158
135
166
271
164
179
186
193
206
217
Quantity of caught sea fish
Tons
2000
2001
2002
2003
2004
2005
2006
2007
2008
Total
441 690
465 180
493 446
416 126
456 752
334 248
409 945
518 201
395 660
Leer fish
Greater amberjack
Albacore
Hake-Eurepean hake
Red mullet
Goldon banded
Sprat
Seabream
Common sole
John dory
Common seabream
Angler fish
Shore rockling
Meagre
Silverside
Anchovy
Painted comber
Eurepean barracude
Black skorpion fish
Annular bream
Horse mackerel
Scad
Brown mearge
Picarel
Turbot
Two banded bream
Gobies
Grey mullet
Angelshark
Sword fish
Red gurnard
Trigla lineata
Chup mackerel
Topeshark
Bogue
320
50
18 190
2 450
7 000
830
1 000
100
70
50
15
500
280 000
400
150
300
670
15 000
7 200
20
1 500
2 700
750
300
27 000
60
370
260
9 000
2 880
1 500
255
35
20 810
2 455
1 000
1 070
1 250
130
100
35
20
575
320 000
410
130
525
280
15 545
10 635
20
2 250
2 455
375
335
22 000
20
360
200
4 500
1 000
1 000
330
45
10 500
2 395
2 050
700
585
55
80
8
5
518
373 000
100
206
270
548
19 500
6 982
39
1 105
459
203
201
12 000
18
370
271
1 500
686
1 126
262
40
7 500
1 400
6 025
794
410
24
64
4
3
664
295 000
94
250
240
340
16 400
11 600
30
1 200
300
235
170
11 000
25
350
230
1 480
400
1 540
352
30
27
4 380
1 848
5 411
879
624
24
89
8
7
1 037
340 000
127
255
329
264
18 068
9 337
17
1 020
376
243
210
12 424
28
386
241
1 402
458
1 463
505
60
30
4 100
2 825
5 500
1 215
1 190
76
107
27
11
1 479
138 569
93
281
353
516
13 540
13 978
26
1 869
649
203
141
10 560
38
425
313
2 001
734
3 062
606
53
73
3 460
2 617
7 311
867
937
95
168
17
20
993
270 000
90
234
326
552
14 127
11 800
54
1 321
807
185
113
8 915
51
410
560
2 760
668
3 601
549
57
852
3 337
2 091
299
11 921
759
851
101
88
204
23
60
999
385 000
103
417
202
336
22 991
9 030
73
1 044
769
189
136
8 291
15
423
339
292
2 263
496
3 851
513
75
208
252
925
110
303
526
848
72
176
360
11
56
142
675
229
218
362
298
134
043
41
742
528
263
164
345
34
386
362
24
818
413
580
1 900
60
4 250
80
540
18 000
200
45
85
1 070
12 000
1 200
115
13 060
90
320
10 000
340
55
80
2 100
13 460
292
713
26
25 000
130
403
8 808
300
70
71
2 300
6 286
230
700
27
22 000
150
550
8 000
290
77
107
3 300
6 000
264
628
37
19 901
138
551
8 205
239
63
97
1 075
568
5 701
295
581
44
18 357
142
541
8 309
233
52
151
990
507
70 797
384
490
60
8 399
332
1 021
9 112
283
29
97
806
1 230
29 690
345
421
37
6 858
169
689
12 940
8
249
19
95
918
785
24
5 965
Waker
Seabas
Small-Scalled
Blue fish
Saddled seabream
Striped bream
Whiting
European coger
Conger eel
Croaker
Dusky grouper
Bluefin tuna
Little tunny
Piper
Atlantic bonito
91
1
1
39
1
1
251
22
10
3
1
2
4
12
1
6
313
751
35
048
128
634
231
77
349
22
25
887
072
14
448
Large-eye dentex
Pilchard
Mearge
Black sea bream
Saupe
Dentex
Sharpsnout seabream
Striped red
Twaite shad
Frigate mackerel
Blue spatled bream
Mackerel
Thornback ray
Gar fish
Saury
Other
Source: Turkish Statistics
Institute
92
16 500
70
45
200
100
2 300
720
40
900
1 100
300
250
300
10 000
50
45
160
60
1 570
690
35
550
555
640
55
175
8 684
63
40
243
79
1 450
862
57
486
369
482
97
280
12 000
75
76
230
90
1 050
1 100
60
350
540
450
160
440
12 883
62
70
198
106
961
1 172
284
74
568
532
491
140
380
20 656
96
109
391
136
1 207
2 176
1 020
55
781
763
577
206
600
15 586
320
599
242
1 256
1 738
1 031
80
783
813
375
289
1 109
97
20 941
71
321
106
20
1 732
2 252
993
82
1 076
974
400
409
754
143
17 531
30
190
146
17
1 978
2 289
836
119
516
591
335
348
321
Quantity of caught fresh-water products (tons)
Tons
Type of fish
2001
2002
2003
2004
2005
2006
2007
2008
Total
42 824
43 323
43 938
44 698
45 585
46 115
44 082
43 321
41 011
Chub
104
91
73
82
93
87
85
82
71
Trout
277
364
352
393
352
376
374
550
630
Bream
200
151
198
221
213
234
259
225
170
11
37
39
43
37
41
49
45
47
1 583
1 685
1 733
1 826
2 107
5 248
6 677
6 540
6 630
Tarek
15 654
15 848
14 930
14 215
14 259
14 103
11 978
11 623
11 758
Tench
690
778
800
785
1 875
1 792
1 953
1 884
1 632
Catfish
576
520
495
507
487
480
478
486
339
Bighand goby
107
116
85
73
79
105
101
70
57
Mullet
698
710
659
738
820
830
948
927
1 023
Rudd
323
257
240
247
267
281
285
258
261
Frog
77
873
898
792
803
803
833
895
668
Pike perch
1 633
1 644
1 850
1 751
1 852
1 768
1 656
1 586
1 346
Snail
1 592
1 601
1 937
1 850
1 879
1 873
1 462
1 397
1 007
14 137
12 265
12 965
13 820
13 451
13 718
12 116
12 286
11 625
Transcaucasian barb
1 124
1 009
918
1 013
1 027
971
967
985
993
Wels
1 019
813
987
912
897
804
1 245
1 293
1 275
Eel
176
122
147
158
165
176
162
179
171
Pike
224
192
217
237
253
249
279
242
213
1 681
1 634
1 894
2 183
2 317
809
797
816
783
938
2 613
2 521
2 852
2 352
1 367
1 378
952
312
GokCe (Alburnus Akili)
Sand smelt
Common Carp
Cray fish
Other
Source: Turkish Statistics Institute
93
2000
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NOTES
96
NOTES
97
98

turkish agriculture sector

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