Agriculture makes a relatively small and declining contribution to Turkish gross domestic product. Market development and promotional activities are very limited, with total government promotional expenditures estimated at $2 million in 1999. Little information is available on industry promotions.

In general, Turkey has two broad agricultural export strategies--one for horticultural products, mainly fruits and vegetables, for which Turkey generally is often price competitive. The other is for bulk commodities and products, for which Turkey is not competitive.

The export strategy for horticultural products involves promotion activities, mainly market research, transportation subsidies and production support. Support includes subsidized credit and inputs as well as government assistance for cooperatives, whose main function is to support prices, and exporters' unions, whose main function is to provide information. Turkey's agricultural support prices for bulk commodities are significantly above world price levels. Thus, its strategy for bulk commodities largely involves production support, 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 and processed products. Agricultural support expenditures and export subsidies have been directed toward bulk commodities.

Turkey’s Government invests little in agricultural exports. The Government 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. During 1999 Turkey provided about $200 million in export subsidies for wheat and barley. Direct subsidies occur when the government exports its grain stocks at a price below acquisition cost. Indirect subsidies are provided when these stocks are sold to domestic processors at world market prices to support exports of flour and pasta. Support prices for wheat increased substantially in recent years as did direct and indirect export subsidies. Both direct and indirect subsidies should decrease, however, during the next several years if Turkey implements a recently-negotiated letter of intent with the International Monetary Funds, which requires lower treasury outlays for direct agriculture supports.

The Export Promotion Center for Turkey (IGEME), located under the Office of the Prime Minister and working with the Under Secretariat of Foreign Trade is the main government export promotion and market development organization. IGEME provides funding to private firms to conduct a variety of export promotional activities, including research, product development, risk capital, and packaging improvements. It also finances fairs and exhibits, and assists in opening and operating sales offices abroad. IGEME's main functions are to conduct market research, promote products, and to facilitate international projects in food or agriculture. A new web site informs Turkish exporters of potential importers of their products. IGEME had an estimated 1998 budget of $3 million and a staff of over 100 people. It has offices in Ankara, Istanbul, and Izmir with representatives in 13 other cities. Only a third of this amount is actually spent on promotional activities, and only a small part of this is spent on agricultural products.

Most of IGEME’s agricultural promotions center on higher-value, processed commodities, mainly to Europe and the Middle East. Recent activities have focused on developing new markets in Syria, North Africa, and the former Soviet and Turkish Republics. There is also focus on traditional markets in Russia and the Far East. IGEME maintains an export promotion and informational offices in Rotterdam, established in 1987 with Dutch government funding, and an office in Northern Cyprus.

Turkey’s 57 exporters' unions are associations of producers and exporters of similar products, that represent its major agricultural, industrial and mineral commodities. Commodities represented are: fresh fruits and vegetables, processed fruits, tobacco, dried fruits, grains, textiles, leather, hazelnuts, wool carpets, olive oil, and cut flowers. The unions operate under the auspices of the Under Secretariat of Foreign Trade, which appoints some top union officials. Approximately 95 percent of Turkey's private sector exports are sold by union members. Funding for union activities is derived from membership fees as well as charges assessed on the volume of members' exports. Charges generally range from .05 percent to .1 percent of commodity value, free-on-board basis. Since the Unions are both numerous and independent, it is difficult to gather aggregate information. In general, however, the unions maintain regional offices in producing regions and no union maintains an overseas office.

Last modified: Sunday, March 17, 2013