Wednesday, January 31, 2007

Agriculture in Turkey

Orange groves overlooking a valley in southeastern Turkey

What is "European Union organic" versus "traditional Anatolian organic?"
It's not actually a botanical difference, or even an ethical question of production. The distinction, an important and highly lucrative one, is purely economics.

In Turkey, approximately 36 percent of the workforce is in agriculture and the majority (57 percent) of these farmers live below the poverty line.
The European Union is Turkey's largest trading partner, the destination for 59 percent of Turkish exports. Of all organic agriculture production in Turkey, more than 85 percent is exported to the EU, bringing in about $50 million dollars each year.
So where is the money going?
The truth is, much of it is lost before it reaches Turkish farmers.

The average farm in Turkey is family-run, less than 50 acres, and uses traditional methods of agriculture...meaning that it is organic by default. Expanded trade with the EU, and the exponentially-increasing demand from European consumers for organic produce, has revealed the potential for profits. Official organic labelling has spread across rural Turkey with farmers paying a premium for the certification and inspection processes.

Their return, though, averages just slightly better than neighbors who do use pesticides and synthetic fertilizers. The high price that organic produce sells for in the market is absorbed primarily by a long supply chain far from the farmers. The oragnization New Farm writes that "The majority of the increase is in retail markups and not in the [growers' wages]; the retail markups flow almost entirely to European-based exporters and supermarket chains."

Turkey has the potential to benefit enormously from economic globalization; in the form of easier access to foreign markets and an ever-increasing consumer demand for its valued produce. The current structure, however, does not allow the benefits to flow where they are needed the most. Turkey's farmers, the agricultual base of the society, deserve better.

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Monday, January 29, 2007

What is free-trade in Turkey?

Part of the current government's plan to enter the European Union involves extensive trade liberalization. Turkey has steadily been moving "Westwardly" since Ataturk led Turkey to independence in 1923, but much of the country's efforts are in the cultural, religious, and strictly political spheres. Restructuring the economy from government-domination to more reliance on private organizations is one aspect of the new economic approach. This liberal ideology, however, is not the current reality.

The Heritage Foundation's 2007 Index of Economic Freedom gives a brief overview of Turkey's current trading situation:
The average tariff rate is low and continues to remain low. On the other hand, Turkey makes extensive use of alternate barriers to a free market. One measure is collecting a hefty value-added tax (about 20 percent) on the majority of imports, and even higher for any goods classified "luxury." In a bureacratic system where foreign agricultural produce is considered "luxury," the domestic farmers have benefited greatly.

Still, on paper, Turkey "follows basic WTO rules to regulate imports and tariff structures and has adopted the EU's common customs tariff for imports."

It's a sign of shrewd policy-making that Turkey is considered by many to be a free-trade zone with a liberalized market. At the same time, the country's "prohibitive tariffs for agriculture and food products, significant import taxes and fees, export subsidies and other export promotion programs, import licensing, non-transparent and complex standards and regulations, and service market access barriers," are all part of a very successful protectionist program.