TBY talks to Mehmet Eker, Minister of Agriculture and Rural Affairs, on the technology-driven aspects of the agriculture sector, attracting FDI, and investment opportunities and benefits.
TBY How is the Ministry of Agriculture investing in R&D to promote advanced technological processes across the agricultural sector?
MEHMET EKER The Program on Supporting Rural Development Investments was implemented by our Ministry in 2006. Grant support at a rate of 50% is provided for investments in the processing, storage, and packaging of agricultural products, the construction of new greenhouses that use alternative energy resources, pressurized irrigation systems, and facilities that produce alternative energy in support activities, as well as projects involving sheep, goats, and buffalo. To date, 3,203 facilities have been established with grant payments for these investments totaling TL575 million.
What is your Ministry’s strategy to encourage international investment in the Turkish agricultural sector?
Turkey has become an attractive country for both national and international investors, with its explosion of activity in recent years, stable political structure, and improving sound economy. Investments have been increasing gradually in agriculture, and Turkey provides many significant opportunities to investors, such as a dynamic and young population, affordable and qualified labor, improved industry and trade, convenient land, air, and marine transportation, arable land, qualified production, suitable weather conditions, and proximity to important markets. Turkey’s agricultural GDP increased from $23.7 billion to $62.7 billion over the period from 2002 to 2010, registering an increase of 165%. The export of agricultural products has also increased from $4 billion to $15.3 billion between 2002 and 2011, showing 282% growth.
What trends in investment can you identify?
The profile of investors who want to invest in agriculture has diversified and expanded in recent years. While small-scale investors with a limited budget were previously at the forefront, the number of medium- and large-scale investments has been increasing gradually. Companies in different service sectors are beginning to look toward agriculture. These developments are important indicators that support allocated to agriculture is successful. In total, $190 million in foreign investment was realized in the agricultural sector between 2005 and 2010. Although it is considered under the umbrella term of “manufacturing,” the amount of foreign investment entering our country in the segments of food, drink, and tobacco has increased from $68 million to $145 million, an increase of 13% in the period between 2005 and 2010. In total, there has been $1 billion and $784 million of foreign investment in these sectors over the same period. Meanwhile, there has been an increase in the number of foreign companies in the agricultural sector. By the end of 2010, over 25,800 foreign companies were operating in Turkey, two-thirds of which were established in the last seven years.
Which sectors are the most attractive for investment?
Livestock, organic agriculture, aquaculture, and poultry are some of the sectors that have become prominent in our country in recent years. Due to the support provided by our Ministry in order to improve the sector, increase its productivity, and carry out important projects, livestock has become an especially attractive investment area. Another current investment focus is organic agriculture. Increasing sensitivity in terms of health and nutrition has made organic farming more important, a practice that is carried out without using materials that are harmful to the environment and human health, such as chemical fertilizer, pesticides, and hormones. Furthermore, this sector provides inputs for other industries, such as textiles, which makes it more attractive for investors. Studies into organic agriculture have been accelerated, with 1 million hectares of potentially usable land, improved legal infrastructure, and incorporation into the support system. While the sector boasted 310,000 tons of production and 150 product varieties in 2002, in 2010 this production had reached 1.34 million tons and 216 product varieties. Another prominent sector is aquaculture, which has been the most rapid-growing sector in the world according to FAO data. Our country ranks third in the world in the aquaculture sector, as Turkey is suitable geographically and enjoys increased production as a result of government support. Aquaculture production reached 653,000 tons in 2010, showing a year-on-year increase of 5%. Cultivation production was 167,000 tons in 2010, marking 5.3% year-on-year growth and 173% relative to 2002. The poultry sector is a third area that is growing and developing rapidly in our country, and according to TurkStat figures production increased to 1.6 million tons in 2011.
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