Turkey’s agriculture sector was the backbone behind Turkey’s economy some 50 years ago. However,
with the opening up of the economy, especially since Turgut Özal became prime minister in 1982,
Turkey’s industrialisation surged ahead, attracting a large part of the agricultural population to the
cities to work in factories or other commercial enterprises. Though agriculture continues to represent
a vital part of the Turkish economy, the sector has declined in importance with regards its share of the
total economy.
The performance of the agricultural sector has not been bad, it is just that is has been out shone by
the other sectors such as industry and construction. According to a report published by the Foreign
Agricultural Service of the US Dept. of Agriculture (USDA) on December 18th, 2014, Turkey had
emerged as a major exporter of agricultural products, both to the Middle East and to other markets,
over the decade until the end of 2013. Exports have tripled during this period and were valued at
USD 16 billion in 2013.
While Turkey has traditionally been a significant supplier of fruit and vegetables, it has diversified to
include a wide range of products in recent years.
According to the USDA report, products which have seen strong growth include are the following :
“Sunflower oil : Turkey is the world’s largest exporter of refined sunflower oil, the majority of which
are first imported into Turkey as crude oil from Russia and Ukraine, and then refined inside and
re-exported, mostly to Iraq and Syria. Turkey’s tariffs on crude oil are considerably lower than the
current 50 percent tariff on refined oil, which helps encourage further processing inside Turkey.
Tree nuts : Turkey dominates world hazelnut trade and accounts for nearly 80 percent of global
hazelnut exports. Nearly three-quarters of Turkish exports go to the European Union.
Raisins : Turkey remains the world’s largest exporter of raisins… accounting for nearly one-third
of total global trade. The lion’s share of these exports are to the EU-28.
Poultry : Turkish poultry exports have also been expanding in recent years…. In fact, Turkey is
expected to be the world’s sixth-largest exporter in 2014. Almost all of these exports are shipped
to other Middle East markets, especially Iraq. Turkey has a comparative advantage over other
suppliers as a result of its close proximity to these markets, its ability to supply halal product, and
the fact that it supplies whole broilers, which many customer countries prefer.
Pasta: With the rapid expansion of its pasta exports, Turkey has become the world’s third-largest
exporter of pasta after the EU-28 and China. Most of this pasta is going to Sub-Saharan Africa,
where and Turkish pasta has largely replaced Italian pasta in many markets.
Flour: Turkish flour exports have surged, reaching almost USD1 billion in 2013 and surpassing two
million metric tons, making Turkey the world’s largest exporter of flour. While the majority of
Turkish flour goes to Iraq and Syria, exports also go to Asian markets such as the Philippines and
Indonesia, and exports have been rising to Sub-Saharan African markets. In fact, flour exports to
Sub-Saharan Africa have tripled in the last five years (of the period of the report).”
With regards government support helping Turkish agricultural products, the report adds the
following :
“While trade-distorting agricultural support policies are trending downwards amongst OECD
countries, Turkey’s support has remained high according to the OECD. Wheat is a major
beneficiary of Turkish agricultural support and benefits from minimum purchase prices, input
subsidies (diesel, fertilizer and certified seeds), and deficiency (premium) payments.
Wheat-specific payments increased significantly from 1996 through 2013. However, as a
percentage of the value of production support varied significantly by year due to fluctuations
in market prices ranging from 6-52 percent. Since 2004, the minimum purchase price,
supported by high tariffs, has increased by more than 40 percent. Further, Turkish processed
wheat products (flour and pasta) benefit from export subsidies.
In addition, a number of Turkish agricultural exports benefit from an Inward Processing Scheme
(IPS). The IPS has made it possible for Turkish wheat flour, for example, to better compete
internationally despite high, protected domestic prices. Due in part to large inflows of Turkish
wheat flour, Indonesia has put in place a quota on wheat flour imports, and in November the
Philippines put in place anti-dumping duties of up to 16 percent against Turkish wheat flour.“
The report also stated that “Although the EU-28 remains Turkey’s largest export market,
nearly all of Turkey’s growth in trade has been to developing countries, especially those in the
Middle East. In 2013, nearly a quarter of Turkey’s agricultural exports went to Iraq. Exports
there more than doubled in just three years – from USD 1.5 billion in 2010 to USD 3.5 billion in
2013 – led by vegetable oil, flour, poultry and chicken eggs. The turmoil in Syria has also
increased import demand there, and Turkish agricultural exports to Syria quadrupled in 2013,
and are up another 50 percent in the first half of 2014. Two other regions that have been
increasing markets for Turkish products are the Former Soviet Union and Africa. Turkish
exports to Russia, in particular, have been strengthening and could increase even more this
year in light of Russia’s year-long ban on a wide range of agricultural products from the EU,
United States, Canada, Australia, and Norway. Turkish exports to Sub-Saharan Africa have
also skyrocketed.“
Despite the success shown by the agricultural sector, farmers do not appear to be at all happy.
They have protested strongly against the government’s new economic policies and
liberalisation of imports, which have hit them very hard. As agricultural and livestock costs rise,
farmers and livestock producers' products are no longer fetching appropriate prices.
Turkey’s Red Meat Producers Union reacted strongly against the recent liberalization of meat
imports, accusing the government of trying to destroy local production, and adding that the
price of meat is not going down despite the liberalizing of imports and that only a few middle
men are making profits. Turkish President Recep Tayyip Erdogan's announcement during a
visit to Serbia on September 11th that Turkey would import 5,000 tons of red meat from Serbia
did not help the situation.
In the Black Sea region, the government's hazelnut pricing policies angered the 500,000 people
who make their living in the industry. When the government declared the base price of hazelnuts
to be 10 Turkish liras (USD 2.6) per kilogram, many producers declared they would cut down
their trees. The main opposition Republican People's Party (CHP) organized a three-day protest
march in September, under the banner of "Justice for Hazelnuts," from Ordu to Giresun, about
29 miles (47 kilometres) along the Black Sea coast. Thousands of protesters joined the march to
express their anger over the government’s hazelnut policy.
Tea has also become another major problem for the government. This strategic product is again
the livelihood of hundreds of thousands of families in the Black Sea region, including in Erdogan's
hometown of Rize. The Tea Industrialists and Businessmen Association (CAYSIAD) angered tea
growers by suggesting that the price of Turkish tea is higher than the global average.
In the Aegean region, the government’s base price of 4 Turkish liras (USD 1.04) per kilogram of
grapes also triggered protests. The main opposition CHP party demanded the price of grapes be
raised to at least 6 Turkish liras (USD 1.56) per kilogram. Thousands of growers marched against
the government in the streets of Manisa, Turkey's capital of grape production.
Turkey is also among the world’s largest producers and exporters of apricots. In Malatya, the
country's centre of apricot production, farmers protested low prices by cutting down their trees
and spilling their products on the roads.
Recent protests İn the Adiyaman province against the Government’s new law restricting the
production and selling of tobacco in Turkey were put down by the security forces with excessive
force. The aim of the new law was to prevent tobacco smuggling, that is the production and
selling of tobacco in the black market. However, thousands of tobacco growers operate in this
way, and now face prison sentences and heavy fines if they continue. Tobacco is the most
important source of income for people in the Adiyaman and the new regulations will greatly
harm the province.
CHP points out that the government’s taxation of cigarettes is now 84% per packet of cigarettes,
hence the sharp rise in those rolling their own cigarettes. The party also says that Turkey’s special
“Oriental” brand will disappear with these new regulations, and that Turkey has become a net
tobacco importer as of 2012. They claim that In 2002, 405,882 families were making a living from
tobacco, and that in 2015, this had shrunk to 56,000.
According to the UN Food and Agriculture Organization, Turkey’s agricultural population in the
last decade has been reduced from 30.98% of the population to 25.64% of the population,
meaning that out of Turkey's population of 80 million, around 20 million Turks live in rural areas.
Those 20 million Turks are directly affected by the country's agriculture and animal husbandry
policies. The dissatisfaction of the rural areas with the government’s policies will be bad news for
the ruling Justice and Development Party (AKP) which has in the past relied heavily on votes from
these areas.
2016 was a bad year for the Turkish agriculture sector as a result of a combination of falling
exports and the consequent decline in prices in the domestic market. It was estimated that the
agriculture sector had contracted by 6.2% in real terms in 2016, compared with a growth of 9.1%
in 2015.
The share of the agricultural sector in gross domestic product (GDP) had nevertheless remained at
7.5% in 2016, the same as in 2015. There was in fact no decrease in agricultural output, and indeed
Turkey’s plant and livestock production had increased, with the exception of grain production. Since
the producer prices of 18 out of 34 main products decreased, and the market prices of 24 products
out of 38 increased, it would appear that both producers and consumers lost in 2016,
whereas middlemen appear to have made money out of this system.
The agricultural sector was undoubtedly hard hit by the sanctions imposed by Russia in 2016. Most
of these restrictions have since been lifted. Turkey’s poultry exports to Iraq, which was once its
largest market, also saw a sharp decline last year.
In the past, Turkey’s farm policies were very protectionist with very high levels of support to
farmers and heavy protection against imported foodstuffs. Turkey’s efforts since to introduce
liberal policies have not been popular, because the Turkish farmers had always taken government
support for granted.
Recent policy reforms, notably in integrating environmental concerns into agriculture,
strengthening the legal framework, reforming institutions and improving rural policy, have brought
about important improvements. However, the productivity and efficiency of the Turkish agricultural
sector still remain low, due to small, fragmented farms, low education attainments and poor
agro-ecological conditions. Turkey needs to shift its output-based farm support policies toward
measures that help farmers increase competitiveness, raise farm incomes and tackle environmental
problems.
The agriculture sector in Turkey is clearly going through a difficult time. Some of its problems may be
classified as necessary growing pains. There is a need for liberalisation and institutional reform in
order for the sector to become more competitive and be more successful in marketing products to
developed economies such as those of the European Union. The sector has in recent years been
unfortunate in that it has been adversely effected by geo-political tension in the region. However, the
agriculture sector has still grown substantially and showed that it has the resilience, determination
and capability for it to assume the role of grocer for Europe and the Middle East.