Agricultural Policy in Turkey
Dr. Nüvit SOYLU
21 April 2014
Turkey, a middle-income country, with a growing population of approximately 76 million,is one of the world’s 20 largest economies. Historically, the agricultural sector has been Turkey’s largest employer and a major -contributor to the country’s Gross Domestic Product (GDP), exports and rural development. With an annual average population growth of 1.8%, the population has more than doubled since 1970, leading to high rates of migration from the rural provinces to the urban centres, particularly from east to west.
Turkey is characterised by large regional disparities, which broadly follow a westeast pattern. These disparities are associated with substantial differences in geographical features and climatic conditions, as well as migration flows. In particular, the main centres of economic activity are located in the western part of Turkey, while the poorest are on the eastern border. The more affluent regions have important shares of production and employment in manufacturing and services, whereas in most of the other regions agriculture is the most important source of income and employment.
Turkey is an important producer and exporter of agricultural commodities on world markets and is estimated to be the world’s 7th-largest agricultural producer. Although, in relation to the industrial and service sectors, agriculture has been declining in importance, it nonetheless continues to play a fundamental role in Turkish society, employing about a quarter of the workforce and generating most of the income and employment in rural areas.62 billion $ came from agricultural area in total gross product in 2012. Primary agriculture’s share in employment decreased from 50% in 1980, to 25% in 2009, but its contribution to GDP also declined – going down from 23% to 8.3% over the same period. Agriculture’s share in total exports remains stable at around 11% of total exports as 16 billion $ in 2012.
Agricultural production and activities.
The climatic and geographical conditions across the country permit a wide range of farming activities. Turkey is largely self-sufficient in foodstuffs. Roughly 55% of Turkey’s agricultural area is devoted to arable crops (of which about 11% is fallow land, and 24% is irrigated); 38% to permanent meadows and pastures; and 8% to permanent crops.
Agricultural production, particularly crop production, has grown rapidly over the past two decades. Arable farming dominates the agricultural sector, accounting for about 75% of output value, with the value share of fruit and vegetables at over 44%. The main crops are cereals (wheat, barley and maize); other crops (sugar beet, cotton, potatoes and tobacco); vegetables (tomatoes, cucumbers, dried onions and watermelons); and fruits and other perennial crops (apples, citrus fruit, grapes, figs, hazelnuts, olives and tea).
Turkey is a first country to some fruite and vegetables production in the world.
The livestock sub-sector (which consists mainly of cattle, dairy, buffalo, poultry, sheep and goats) includes traditional and commercial activities. Climatic and topographic conditions are favourable to fruit and vegetable production in the two coastal regions, while the predominantly rural and mountainous areas specialise in livestock and animal products.
Farming enterprises size
Despite the recent emergence of more commercial farms, the majority of farming enterprises still consist of small-sized holdings or family farms, with a high degree of fragmentation. The agricultural labour force (over half of which is made up of women, working mainly as unpaid family labour) displays high levels of poverty and low levels of education. Despite significant progress achieved over the last two decades, illiteracy levels of workers in the agricultural sector remain as high as 18%, compared with 7% for those employed outside agriculture.
Nearly two-thirds of farms are smaller than 5 ha.A relatively large number of the larger and more specialised farms are located in the Aegean and Mediterranean regions of Turkey. The structure and specialisation of farms are determined by the social and economic conditions in rural areas, as well as by climatic conditions.
Subsistence and semi-subsistence farming are important features of Turkish agriculture. Characterised by very low productivity, a high rate of hidden unemployment and a poor level of competitiveness, such farms are, nonetheless, of crucial importance in providing income security, and represent a source of livelihood for the majority of Turkey’s rural population.
The size of the average land parcel has continued to diminish over recent decades, largely as a consequence of Turkey’s inheritance laws. A major policy objective is to increase the average size of the country’s agricultural holdings.
These small farms are, nevertheless, sufficiently productive to have made Turkey a significant agricultural exporter and a world leader in certain agricultural products. Turkey is the world’s largest producer of hazelnuts, apricots and cherries; the 2nd-largest producer of figs, chestnuts, pistachios, cucumbers and watermelons; the 3rd-largest producer of apples, chick peas, onions, olives and sheep’s milk; and the 4th-largest producer of fresh vegetables and grapes, tobacco and tea. Production of wheat and cotton is also important.
Turkey’s main trading partners are the European Union (EU), the United States, the Middle East and the Russian Federation.
The principal objectives of Turkish agricultural policy
The principal objectives of Turkish agricultural policy, which have changed little over time, can be summarised as follows: meeting the food security needs of a growing population; increasing productivity and reducing vulnerability to adverse weather conditions; improving self-sufficiency levels; raising farm incomes and giving them more stability; enhancing competitiveness; developing rural areas; ensuring food safety; and harmonising the country’s agricultural and rural development policies and institutions, bringing them into alignment with those of the EU.
Until the early 2000s, these objectives were primarily addressed through a complex set of price supports for commodities, with domestic prices supported by intervention purchases. These initiatives were complemented by trade-related measures (particularly tariffs); subsidies for farm inputs; and investments in infrastructure.
The measures were carried out by the numerous government agencies which oversee agricultural policy, such as the State Economic Enterprises (SEEs); the Agricultural Sales Cooperative Unions (ASCUs); and the state-owned banks. These institutions were responsible for the determination of price support levels; distribution of budgetary support; instigation of marketing regulations; and provision of inputs to farmers.
Policy reforms in the agricultural sector
Policy reforms in the agricultural sector gained momentum in 2001, as part of an economy-wide effort to restore fiscal balances and increase the efficiency of the economy. World Bank Agricultural Reform Implementation Project (ARIP) main objective was to bring about a move towards a more market-oriented agricultural policy, through: the abolition of the administered output price and the elimination of input subsidies, including credit; the restructuring of state-owned enterprises and ASCUs; and the introduction of direct income support (DIS), decoupled from commodity production.
In addition to these measures, several additional steps have been taken to harmonise Turkey’s agricultural policies and institutional framework with those of the EU
However, area-based payments, such as the so-called “fertiliser” and “diesel” payments, are increasing in importance. Moreover, import protection remains unchanged, with major staples and related products being heavily protected, while protection on net-imported products and on intermediate inputs to export-oriented manufacturing is relatively lower.
Overall, since 1986, success in achieving the policy reform necessary for bringing about improved market orientation has been variable, and frequent ad hocchanges to policy settings have been made. In 2009, support as a share of gross farm receipts (% PSE) increased, and now exceeds the OECD average. Moreover, as much as 88% of support to producers is now provided in the form of market price support, as measured by the OECD, which is one of the most distorting types of policies.
OECD (2011), Evaluation of Agricultural Policy Reforms in Turkey, OECD Publishing.http://dx.doi.org/10.1787/9789264113220-en