Market development and promotional activities currently are very limited, with total government promotional expenditures estimated at less than $1 million for 1996. Industry expenditures for export market promotion are estimated at $19.7 million for 1996, although little information is available on industry promotions.
In general, Turkey's has two broad agricultural export strategies--one for horticultural products (mainly fruits and vegetables) for which Turkey generally is price competitive on world markets and the other for bulk commodities (and products) for which Turkey generally has not been competitive on world markets. The export strategy for horticultural products involves market promotion activities (mainly market research), transportation subsidies and production support, including subsidized credit and inputs as well as government support for cooperatives (whose main function is to support prices) and exporters' union (whose main function is to provide information). Because Turkey's agricultural support prices for bulk commodities were at or above world price levels until recently, Turkey's overall export strategy for bulk commodities largely involved production support as well as both direct and indirect export subsidies, transportation subsidies, and other price leveling mechanisms, rather than market promotion. In general, the bulk of export promotional spending has been directed toward horticultural products, while agricultural support expenditures and export subsidies largely have been directed toward bulk commodities.
Government assistance to export market promotion in Turkey represents only a small share of total government assistance to agricultural exports. The government of Turkey provides indirect subsidies through marketing boards and direct export subsidies for other agricultural products. As its budget permits, the government of Turkey also provides export credits, transportation subsidies, tax and investment incentives, and input subsidies. Of greatest interest are the activities of the Turkish Grain Marketing Board and the direct export subsidies. In both cases, the level of activity has decreased due to budget limitations and GATT reductions.
The Turkish Soil Products Office (Grain Marketing Board) was established In 1938 to administer purchases of wheat, barley, and other products; to sell these products on domestic markets when authorized by the government, to import and to export surpluses.
The government also provides direct export subsidies for a decreasing number of agricultural exports. During calendar 1995, 19 commodity groups were eligible for export subsidies, including fresh and processed fruit and vegetable products, flour, malt, pasta, and margarine. Direct export subsidies for 1995 were estimated at $30 million.
The main governmental organization involved in export promotion and market development is the Export Promotion Center for Turkey (IGEME), located under the Office of the Prime Minister. IGEME provides minimal funding to private firms to defray the cost of promotion. IGEME also conducts a limited amount of in-house market research and maintains and develops market information. IGEME had an estimated budget in 1995 of less than $1 million and a staff of about 100. Less than 10 percent of the staff (and budget) are involved in promoting agricultural exports. Other funding for agricultural exports from the government of Turkey.
IGEME's main function is to conduct market research studies, to develop and to maintain contact and product information and to facilitate international projects in the food or agricultural sector (such as a recent grant from Japan aimed at improving managerial and technological efficiency in the food processing industry). IGEME also provides funding to private (or quasi-private) concerns to conduct a variety of export promotional activities, including research, product development, risk capital, packaging improvements, fairs and exhibits, and assistance to open and operate sales offices abroad. Those fees are paid to the Treasury and are not available to IGEME for additional market promotion activities.
In addition to funding, IGEME develops and maintains product and contact information and performs market research. The bulk of agricultural promotional efforts appears to center on higher-value, processed commodities, mainly to Europe and the Middle East. IGEME also maintains an export promotion office in Rotterdam, established in 1987 with Dutch government funding, at a cost of about $15,000 per year. The Rotterdam office functions as an information center. IGEME has no plans to open additional overseas offices.
Exporters' Unions are associations of producers and exporters of similar products. Currently, 52 Exporters' Unions represent Turkey's major agricultural, industrial and mineral commodities. The Unions operate under the auspices of the Under secretariat of Foreign Trade, which appoints top Union officers. Approximately 95 percent of Turkey's exports are done by Exporters' Union members. Funding for Union activities is derived from membership fees as well as charges assessed on the volume of members' exports. Charges generally equal about 0.1 percent of commodity value (f.o.b. basis) and, thus, total about $2.5 million for agricultural exports. Since the Unions are both numerous and independent of each other, it is difficult to gather aggregate information. However, in general, the Unions maintain regional offices in producing regions and no Union maintains an overseas office. The Unions' major activities focus on domestic issues and include: market information, trade servicing, research and lobbying. Market development activities largely are restricted to participation in international trade fairs and exhibits, but several agricultural exporters' unions are considering a more active role in international market promotion. For example, the Hazelnut Exporters Union is considering joint promotion activities with U.S. hazelnut producer associations.
A large percentage of Turkey's promotional activities are assumed to be directed toward Europe, particularly the European Community. Textiles, processed food, fruits, vegetables and nuts are among the major commodities promoted. Expenditures in the Mediterranean region appear fairly stable while expenditures for new markets in the FSU and North America are increasing. Fresh fruit and vegetables, processed foods, flour and vegetable oils comprise the bulk of exports to the FSU. Most expenditures for new markets in North America and the Far East are for market research.