Union of Turkish Chambers of Agriculture

Istanbul, 30 April-1 May 2006

 

“AGRICULTURE IN TURKEY-EU INTEGRATION” 

 

Dialogue with farmers’ organisations

by David King, IFAP Secretary General

 

Mr. Chairman,

 

It is a pleasure to be back in Turkey with the Turkish Chambers of Agriculture (TZOB). I bring you the greetings of your farming colleagues throughout the International Federation of Agricultural Producers (IFAP).

 

Last November 2005, TZOB organised the 9th session of IFAP’s Mediterranean Farmers’ Committee in Antalya, under the theme “The Barcelona Process: ten years later”. I would like to thank TZOB President, Semsi Bayraktar, for hosting this event which has relaunched IFAP’s policy work in the Mediterranean region.

 

In May 1994, here in Istanbul you hosted the 31st World Farmers’ Congress. That congress was opened by the President of the Turkish Republic, H.E. Süleyman Demirel, which shows the importance of agriculture in Turkey at the highest level of the state. Again this morning, the participation of the Prime Minister of Turkey in this Conference shows how important agriculture is in Turkey,

 

I would like to congratulate TZOB for taking the initiative to hold this international conference, for agriculture is becoming more and more an international affair. Today, all farmers are working in a global agri-food system. Farmers everywhere have to work under the international trade rules of WTO, they have to meet global food safety standards under the Codex Alimentarius Commission and the International Organisation of Animal Health, and they have to conform to the environmental conventions, etc. It is good that farmers are taking the lead in discussions on these issues. 

 

In this global agri-food system, farmers are facing enormous challenges. These challenges are global and they apply to farmers everywhere, whether or not they are inside the EU or outside of it. I would like to mention five of these challenges:

 

• Pressure to be competitive. As trade barriers continue to come down as a result of successive rounds of WTO negotiations, farmers need to organise themselves to be more and more competitive. They will have to clearly identify which niche in the market they wish to serve and then focus on delivering high-quality products at low cost to sell into that market. This is important, not only for farmers to conquer export markets but also for them to survive in their local markets in the face of competition from outside.

 

• Withdrawal of governments from supporting agriculture. Governments in OECD countries are no longer willing to support agriculture. Food security has been achieved in the OECD area, and so farmers are therefore more and more on their own in competing to supply the market. However, for IFAP, governments still have an important responsibility towards their farmers. In particular, governments have a duty to provide a stable regulatory framework in which farmers can work and invest. Governments should also facilitate access of farmers to market instruments such as cooperatives or collective bargaining groups to negotiate contracts or inter-professional agreements. Farmers need risk management tools such as insurance, and governments should help to facilitate that too. As leaders of farmers’ organisations, we need to remind governments that they still have a role in the agricultural sector, even if that role is changing.

 

• Increasing demands of consumers. Today’s consumers are demanding high-quality food products that are healthy and safe. They want guarantees that their food is healthy and safe. Consumers today also want to know where their food comes from and how it was produced. Thus traceability and certification systems are critical for farmers if they are going to still be in the market in the future. Farmers’ organisations need to prepare for this as soon as possible. If they do not take the initiate to put in place low-cost traceability systems, then it will be the processors that step in and set up plants for export, and impose standards on farmers. This would not likely benefit small-scale producers. Too often it is the farmer who has to pay for traceability and food safety systems, e.g. for ear tags on cattle and required documentation to trace the animal through the food system. However, farmers rarely get a price premium that compensates for the extra cost involved. It is critical therefore for farmers’ organisations to push for public-private partnerships between farmers’ organisations, processors and the government to develop effective but low-cost traceability systems.

 

• Increasing regulatory burden. The demands on farmers from society are changing. Citizens want farmers to protect the environment and biodiversity; they want farmers to provide attractive landscapes.  They want more hedges and ponds for wildlife habitat, and they want animals to be treated well. These demands of society are being translated into more and more rules for farmers to follow. Such environmental rules are very developed in the EU. However, citizens everywhere are demanding these services from farmers.

 

• Rising production costs. The cost of farm inputs and equipment continues to rise faster than the prices that farmers receive for their products. This has been aggravated by recent steep rises in oil prices which have been passed on as cost increases to farmers for their fuel and fertilisers. I understand that here in Turkey input cost rose by 16 per cent last year, while the prices paid to farmers for their products fell by 25 per cent. This is an unsustainable situation. In the past when farmers returns were below their costs of production they could go to the government to make up the shortfall. However, today this is no longer possible. Farmers therefore need to press governments to reduce duties on imported inputs and technology, make sure that credit is available at prices that farmers can afford, and in general work with their farmers’ organisations to reduce the costs in agriculture.  Individual farmers also have to face the challenge of looking critically at the cost structure of their farming operations and how they can increase productivity.

 

 

Mr. Chairman, these are challenges that farmers must face if they are to survive anywhere in the world. Farmers in Turkey have to face them too. They must overcome these challenges for Turkey, for the needs of their own country, and not only to adjust for accession to the EU.

 

How can farmers adjust to address these global challenges?

 

One of the main things that they need to do is to get organised. Farmers have to work together and support their farmers’ organisations.  This is the only way that they will be a powerful force to lobby governments for good farm legislation, and it is the only way that farmers can become more equal partners in the market faced with the domination of huge multinational companies.

 

I know that farmers are very independent people. But how can millions of individual family farmers compete in a global food system against a highly concentrated food retail system where a few companies like Wal-Mart or Carrefour have the market power? Unless farmers are organized into cooperatives, or collective bargaining groups to negotiate contracts, or into commodity chains or other structures, the supermarkets will continue to set the rules for farmers. They will impose their private standards on how farmers run their operations. They will make farmers pay dearly for the shelf space for their products in the supermarkets, and they will make farmers pay the bill for programs to promote their products. Today, it has never been so important for farmers to be organised, nationally, regionally and at the global level, to ensure that they have a voice in shaping their future.

 

 

Mr. Chairman, farmers need to be organized, but even with strong farmers’ organizations they cannot overcome the global challenges alone. They need the help of their governments to provide them with the opportunities to solve their problems. Governments need to give farmers a fair chance. Turkey must give its farmers a chance to develop the great agricultural potential of this country.

 

 

Turkey has so many micro-climates and geographical zones that it can produce a wide range of agricultural products. There is a huge under-utilized agricultural potential in Turkey, maybe not the same as Brazil, but impressive all the same with 47 million ha of agricultural and forest area and the largest water resources in the region. We know that Turkey can produce excellent products, such as hazelnuts, apricots, figs and cotton, and we know that exports of agriculture and food products account for almost 60 per cent of total export earnings in Turkey.

 

However in order to realise this potential, farmers’ organisations must challenge governments to give farmers the regulatory framework, services  and marketing tools that are necessary for family agriculture to survive and grow under globalisation.

 

Farmers in Turkey are facing several serious disadvantages.

 

• Small farm size. The average size of farm in Turkey is 6 ha. This is fine if you are producing fruits and vegetables, but for cereals you need an area more like 300 ha in order to make a living in Europe. I know that action to improve farm structure is underway, but it needs to achieve results if farmers in Turkey are to have a real chance to succeed. If farms are not at their optimum size, farmers will not be able to use the best farming techniques in their particular commodity sector.

 

• Lack of education opportunities. Less than half the rural population of Turkey has access to primary education. Only 6 per cent have access to secondary school education and 2 per cent to higher education. In order to give farmers a fair chance, they need much better education opportunities than these. How can the children of farm families hope to succeed when they have such poor access to education?

 

• Lack of services and infrastructure. It is critical for farmers to see more investment in research and development so that they can employ the best farming technologies. For example, farmers need new varieties of crops that are adapted to the dry areas of Turkey. Farmers need extension services and training programs, and rural credit as well as vital rural infrastructure like schools, roads, electricity, irrigation equipment and communications.

 

• Low incomes. On average, incomes in Turkey are only 29 per cent of those in the EU. Farmers in Turkey deserve better than this. Since 2002, when Turkey introduced its reform policy, the economic performance of Turkey has been impressive by any standard. Economic growth averaged 8 per cent over the period 2002-2004, which is the same league as China and India. In 2005, and again this year, Turkey is expected to grow by 5 per cent – higher than the world average and a lot higher than growth in the Euro zone which is around 2 per cent. Inflation has fallen to 9 per cent, the lowest level for 35 years and interest rates have been reduced. As a result of this excellent performance, Turkey has been able to reduce its debt burden and to attract large inflows on foreign direct investment.  In fact, if this performance is sustained, Turkey could be a net contributor to the EU budget of 9 billion Euros per year from 2018 or 2020. This country is doing well, and there is no reason why the farmers should not benefit too.

 

• Lack of employment opportunities.  The EU’s Lisbon Agenda of 2000 sets a target of an employment rate of 70 per cent by 2010. The current employment rate in the EU is 63 per cent in the EU, so they have almost made it. In Turkey the employment rate is 44 per cent. Turkey is a large country, with a population of 73 million people. It is the second largest European country after Germany.  Almost a third of the population still lives in rural areas. Creating jobs in rural industries and services, especially for women, is therefore vital for Turkey to ensure the future prosperity of rural communities as the farm sector adjusts to EU conditions. If this is not done, more and more people will leave their villages and move to the cities or emigrate to other EU countries. Creating jobs is possible given present high levels of economic growth in Turkey, and increased inflows of direct foreign investment.

 

In conclusion, the challenges facing farmers and policy-makers in Turkey are very similar to those facing many other countries of the world, as they try to become more competitive in a more open and integrated global economy. I am confident that Turkey can be an example of how these challenges can be made into opportunities, so that when Turkey joins the EU sometime after 2014, farmers are in a position to benefit from increased access to EU markets and to the Common Agricultural Policy.

 

I thank the Turkish Chambers of Agriculture are holding this conference, for inviting IFAP to be part of it.  This Conference is drawing attention to the situation of the farmers, and to what measures are needed to for them to make their full contribution to the economic prosperity of their country. So my message to the Conference is “Give farmers a chance”. I am sure that they will take it.

 

Thank you.