World Grain - April 2006 - 20

countryfocus
25,000

Turkey grain situation
(in 1,000 tonnes)

20,000

Maize

15,000

Barley

10,000

Wheat

5,000
0
2005-06

2004-05

2003-04

2002-03

2001-02

2000-01

1999-20

1998-99

1997-98

1996-97

1995-96

* Estimates

Source: USDA

according to the project manager, GAP Regional Development
Administration.
Turkey has about 3.7 million farmers operating in a highly
fragmented landscape, as farmers traditionally divided land
among heirs over generations. Farming is therefore inefficient
relative to large-scale production.
A 2004 World Bank report cited a field survey revealing that
Turkish farmers cultivated an average 8 to 30 plots. About 65%
of these holdings are small (0.1- to 5 hectares).
Turkey has been liberalizing its economy since 1980. Agriculture had been tightly controlled to meet policy objectives,
which included maintaining stable grain prices, increasing
yields and production, developing exports, expanding the irrigation infrastructure and promoting modern techniques.
To this end, the government created agencies, including the
State Economic Enterprises (SEE) and Agricultural Sales Cooperative Unions (ACSU), to procure commodities at support
prices, maintain stocks, execute exports, issue export licenses
and provide input subsidies.

The Turkish Grain Board (Toprak Mahsullei Ofisi), or TMO,
which oversees grains and pulses, is the largest SEE still playing a significant, though diminishing, role.
TMO's role is to make intervention cereal purchases to maintain price stability and hold intervention stocks. Procurement
prices are set in late May or early June and revised during the
year because of Turkey's chronic high inflation and frequent
currency devaluation.
In most years, market prices are higher, resulting in most
farmers selling to traders and millers. But TMO remains the
residual buyer, taking poorer quality grain that private traders
reject.
TMO also regulates grain imports and exports through strict
licensing conditions, but this role is being phased out in favor of
more private involvement.
In 2001, the government adopted major agricultural reforms following a financial crisis that caused the Turkish lira
to collapse. Working with the World Bank, which will lend
U.S.$600 million to help implement the 2001-07 reforms, Turkey agreed to replace subsidies based on agricultural inputs and
production with direct income support to farmers.
It also agreed to phase in privatization of SEE and transform
ACSU into autonomous bodies.
In 2004, the government adopted more reform to be carried
out from 2006-10. These include stepping up farm registrations,
consolidating fragmented land holdings, setting up demanddriven, small-scale processing, marketing and other off-farm
businesses in provinces with 50% grants, rebuilding rural infrastructure, building stronger farmer organizations and encouraging environmentally sustainable practices by providing grants.
By 2004, nearly 90% of farmers had registered for direct income
support. The World Bank report states that the government spent
U.S.$700 million on subsidies in 2003, cutting its subsidy and

"IFP Spomax

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Circle No. 40 on the Reader Service Card or see page 74.

April 2006 / World Grain / www.World-Grain.com

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World Grain - April 2006

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