GROWING UP

Turkey 2012 | AGRICULTURE | REVIEW: AGRICULTURE

A powerhouse in the region, Turkey's agricultural sector has seen phenomenal growth as demand continues to increase for its traditional food exports.


Turkey is a rural powerhouse, and the agricultural industry has significant importance in the country, both socially and economically. In 2010, the industry employed more than a quarter of the Turkish workforce, and contributed over 10% of GDP. Roughly half the country's total land area, around 39 million hectares, is devoted to agriculture. By way of comparison, this is equivalent to 22% of the total land area devoted to agriculture in the entire EU. Agriculture is predominantly a small-scale industry in Turkey, which is why it contributes so heavily to employment. Most of Turkey's 3 million agricultural holdings are small farms that employ family labor. The average farm size is just 6 hectares, compared to the EU average of 13 hectares. Despite the predominance of small-scale farming, Turkey has the largest agricultural economy in Europe, and the seventh largest in the world, up from fourth in Europe and 11th in the world in 2002.

According to statistics, 2011 was a good year for the agricultural sector in Turkey. Production grew by 5.3%, continuing a strong growth trend that has lasted for nearly a decade, in what the Ministry of Food, Agriculture, and Livestock has called the most stable period of sustained growth in the past half century. From 2002 to 2011, Turkey's agricultural GDP grew by 165% from $23.7 billion to $62.7 billion. Agricultural prices also saw a 13.3% increase in 2011, which has been a boon for farmers. As prices and production have risen, employment in the agricultural sector has also grown, rising by 25% between 2007 and 2011 in nominal terms. The growth of the agricultural sector has also attracted a significant increase in foreigninvestment. Over 2005-2010, FDI in agriculture grew from $7 million to $78 million.

CROP SECTOR

Turkey's agricultural strength lies in its massive fruit and nut production industries. Turkey is the world's leading producer of hazelnuts, apricots, figs, and raisins. It is also a huge producer of citrus fruits, almonds, pistachios, cherries, peaches, apples, and dates. In 2011, the country produced 17.2 million tons of fruit, worth $15.2 billion, an increase of 3.5% from 2010. More than half of production was concentrated in the country's top fruit and nut products: apricots, hazelnuts, grapes, apples, and citrus fruits, which brought in $8.7 billion in 2011, 57% of total fruit and nut revenues. Since 2006, the value of fruit and nut production has grown by 16.5% from $13.05 billion to $15.2 billion.

Turkey also boasts a large vegetable and melon production segment, which expanded by 5.8% in 2011, producing 27.5 million tons of vegetables, worth $14 billion. Unlike fruits and nuts, Turkey's vegetable production is primarily for domestic consumption. Tomatoes are the country's top vegetable product, comprising nearly 40% of total vegetable production, and in 2011, Turkey's tomato production increased by 9.5% to 11 million tons, worth $5.4 billion. Cucumbers, onions, peppers, and melons also ranked at the top of vegetable production, together accounting for an additional $5.8 billion, or 41% of production.

Turkey also has a considerable cereal and grain production segment, although it still lags behind the rest of Europe in terms of yield and productivity. Cereal production, which consists mainly of wheat (62%), barley (21%), and corn (13%), is highly subsidized in Turkey, and is concentrated primarily on small-scale farms. As a result, the average wheat yield is 1.95 tons per hectare, compared to the EU average of 5.66 tons per hectare. Still, cereal production is increasing. Turkey produced 35.2 million tons of cereal crops in 2011, up 7.4% from the previous year. Wheat production also saw an increase of 10.8%, up to 21.8 million tons.

FISHERIES & AQUACULTURE

Turkey has a small but growing fisheries and aquaculture sector, although at present it is dominated by a few main products. Fisheries and aquaculture represent under 3% of the agriculture sector as a whole; however, the country is making significant strides in promoting the growth of the aquaculture segment. Between 2001 and 2011, the Ministry of Food, Agriculture, and Livestock invested over $400 million in promoting the development of aquaculture. As a result, aquaculture production has more than tripled over the past decade from 61,000 tons in 2002 to 185,000 tons in 2010. Turkey now has the fifth-largest aquaculture industry in Europe and the third-fastest growing in the world. Turkey's main aquaculture products are trout, sea bream, and sea bass. The trout segment comprises almost 50% of aquaculture production, and Turkey is the number one trout producer in Europe. The country has 720 inland aquaculture producers, with a total capacity of 197,000 tons, and 368 saltwater aquaculture producers with a total capacity of 174,521 tons. Turkey's inland and marine capture segment has not been growing as rapidly as aquaculture; however, it showed almost 5% growth in 2010. The marine capture segment focuses on small oily fish, mainly anchovies, sprat, and pilchards. Turkey's fisheries exports have shown strong growth, rising nearly 264% over the past decade to $448 million in 2011. About 80% of exports go to the EU, where Turkey supplies more than 25% of all sea bass and sea bream.

LIVESTOCK & POULTRY

Compared to the rest of Europe, Turkey has relatively low consumption rates for livestock products. Turkey's per capita meat consumption is one-fifth of the EU average, cow milk consumption is half of the EU average, and egg consumption is three-quarters of the EU average. The one exception is sheep products, which Turkey consumes at rates above those found in the EU. Despite overall low consumption, livestock and poultry products in Turkey—including meat, milk, cheese, wool, and eggs—are worth $23.4 billion, or 37% of the country's agricultural GDP. Poultry dominates the livestock sector in terms of volume, with 1.6 million tons of chicken produced in Turkey in 2011, worth $4.8 billion, or just over one-fifth of the of the livestock sector. Poultry production has increased almost six fold over the past two decades, with Turkey producing just 282,000 tons of chicken in 1995. The year 2011 saw a 12% increase in chicken production compared to 2010.

Turkey's second-largest livestock segment, cattle, has traditionally been heavily protected, resulting in years of high prices and low consumption. However, in 2010, Turkey began to relax restrictions on cattle imports, and in 2011 it imported 110,000 tons of beef worth $500 million. This is still a small amount compared to total domestic beef consumption, which was 644,000 tons in 2011, and brought in $6.6 billion. Although the tariff reductions on cattle were initially intended to be temporary, it now looks as though they will remain in place, as Turkish herd numbers fail to match demand.

Milk and cheese are also important products for the livestock industry, and indeed, Turkey is one of the largest dairy producers in the region. In 2011, Turkey produced 15 million tons of milk, an 11.2% increase on 2010. The majority of milk production (92%) is cow milk, with sheep milk, goat milk, and a very small amount of buffalo milk making up the remaining 8%.

INTERNATIONAL TRADE

Given the strength of Turkey's agricultural sector, it is unsurprising that Turkey is a major player in terms of global agricultural exports. Turkey has long maintained a trade surplus in agricultural goods, and the past decade has seen a monumental surge in exports, from $3.6 billion in 2002 to $14 billion in 2011. Turkey's agricultural imports, particularly of cereals and oil seeds, have also risen over this period, from $2 billion to $10.8 billion. However, the country's strength as a giant in the production of fruits and nuts has allowed it to increase its trade surplus from $1.6 billion in 2002 to $3.3 billion in 2011.

Turkey cultivates approximately 150 agricultural products for export, and is among the top five exporters for more than 30 agricultural products. However, the country is now working to move up the value chain by building brand recognition for Turkish agricultural products abroad. As Ali Kavak, Chairman of the Citrus Promotion Group, explained to TBY, “not having that brand recognition has been a weak point for Turkish producers and exporters for years. Now, creating this brand image is crucial in a highly competitive international market." Kavak explained that Turkish industry is working to “create a viable and internationally recognized 'Made in Turkey' brand." Recep Konuk, President of Pankobirlik, expressed a similar sentiment. Speaking to TBY, Konuk explained that “Turkey aims to produce food brands that are known globally and provide a feeling of trust to consumers worldwide."