Introduction has been undergoing an obvious socio-economic transformation

Introduction

There
is no denying that there are how significant agricultural policy reforms and  their impacts on both the EU and Turkey in the
last decade .Turkey ,as a growing -population country and a middle income
country is one of the initial land of the world`s 20 largest economies. Turkey
has been undergoing an obvious socio-economic transformation and is being
re-shaped by economy-wide agenda of policy reform since 2001 that is why the
country economy demonstrated equated annual groth figure more than 7% over the
years of 2002 and 2007 – a record among OECD countries and showed up remarkable
resilience in weathering between the years of 2008-9 economic crisis.   What
if we look through the ancient history of Turkish agriculture then we can
realize that Turkey is geography where has hosted various civilizations
throughout Anatolian history, so due to the climate diversity of region , agricultural
activities of these civilization decreased 
in a wide variety of areas. Assyrians, Hittites, Seljuks, Anatolian
Seljuks and Ottomans can be considered as the most important of these
civilizations. In Anatolia, which is an old geography and the trade center of
the ancient world vigorously, a wide range of agricultural activities have been
maintained since ancient times. Even before World War II,
 the countries of Europe had traditionally been net importers of food.
Shipments of food were especially vital in the post-war years, and this may
have been when the idea of food self-sufficiency took off. In the 1950s, the
six founding members of the European Union (Germany, France, Italy,
Netherlands, Belgium, and Luxemburg) – still called the European Economic
Community – created a common market, and in 1962 started its ‘common
agricultural policy’. The political aim of this was to help the crippled
agricultural sector of post-war Europe to produce more and to guarantee farmers
an adequate standard of living. Then
objectives are almost the same betweet the comparisons of oldest Turkish
agricultural history and last ten years` overall view .

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Turkish
Agricultural Policies: The Past and the Future

The economic,
social and environmental dimensions of sustainable agriculture require
synchronization of agriculture related national and international policies. It
is unavoidable that international and policies will have an impact on the
national policies even without considering sustainability issue in agriculture.
In addition, the national policies of large trading countries changes the
structure of world trade, and hence resource allocation worldwide. The
countries in the Mediterranean Region can be grouped as the EU and South and
Eastern Mediterranean countries (excluding Israel) with respect to achieving
different phases of sustainability in agriculture. EU was able to achieve a
comparable standard of living for the farmers using the past CAP schemes. As a
result of past policy reforms, the policy tools have been gradually changed to
reach the environmental sustainability with minor effects on the income of the
farmers, and no radical changes in the trade policies. The second group of
countries was not successful in following a consistent set of policies to
provide even a comparable income level to the farmers. For instance, the
average income level of the farmers in Turkey is about 40% lower than the
workers in non-agricultural sectors.  Turkey’s
agricultural sector has been a rather closed, domestically oriented and highly
protected sector.

During the last
decade agricultural sector in Turkey registered a very low growth rate (0.4%)
with wide fluctuations. The historical development of real agricultural value
added for the last half century suggests that, stagnation in agriculture is not
a new phenomenon and appears to be a rule rather than an exception. Growth in
real value added in the past has been in upward jumps in every 7-9 years. The
magnitude of the jumps became smaller over time with fluctuations around the
established levels due to weather conditions (Akder, Kasnakoglu and Cakmak,
2000). Different policy weights in agriculture contributed to the jumps in the
agricultural output: Increase in area sown in early 60’s; support to using
chemical fertilizers in late 60’s; increase in irrigated area and support to
mechanization in 70’s; support to use of high yielding seeds, fallow reduction
programs and new crop rotations in 80’s have been the major technological and
input augmenting developments that contributed to jumps in agricultural output.
No significant productive advance has been realized in the last decade which
resulted in the continuation of the stagnation of the earlier period.
Stagnation of growth in agriculture is not valid for all sub-sectors. Cereals
and pulses have a negative impact on the growth of output. Among cereals yield
decline, especially of wheat is the major source of this negative contribution.
The negative contribution of these major crops is offset by industrial crops,
tuber crops, vegetable and fruits (Akder, Kasnakoglu and Cakmak, 2000). Widely used support instruments were price
supports and subsidies for input, product or credit. Price support was the most
important part of Turkish agricultural policy. State owned economic enterprises
and Agricultural Credit Cooperatives were commissioned to buy commodities such
as cereals, tobacco, tea and sugar beet from farmers at prices determined by
the government. From 1993 onwards, deficiency payments were used first for
cotton and later on for olive oil, cotton, sunflower, etc. Markets were also protected
by import tariffs. Output control over tobacco, hazelnuts, tea and sugar beet was
applied in different ways. Input subsidies were provided on a temporary basis
for fertilizers, seed, feed grain, agricultural chemicals, stud and insemination
with the purpose of reducing the cost of inputs. Product based dairy and meet
incentives were also implemented periodically. Credit subsidies, on the other
hand, were available for input gathering in general and were more advantageous
in comparison to market conditions. However, protectionist policies adopted for
agriculture have been very frequently criticized by many circles and scholars.
Some of the criticisms widely heard may be summarized as follows: these
policies not result in a strong growth of agricultural output and Gross Value
Added (GVA) in agriculture. On the contrary, ‘the development of rural areas
and agriculture in particular has been impeded by heavy government intervention
in the sector, which was often counterproductive.’ Since agricultural policies
were abused by politicians seeking votes, a coherent and consistent formation of
policy was lacking. The combination of high support prices and input subsidies,
and their inconsistent use over time, slowed the agricultural sector down
rather than stimulating it. Mismanagement of agriculture discouraged production
of products in which Turkey has a comparative advantage squeezed out private
sector marketers and subsidized inefficient production technologies.
Additionally, those policies created  heavy
burdens on the budget and resulted in negative effects to the whole economy, either
through payments from the state budget or implicit transfers from consumers. While
the clear failure of the previous policies necessitated undertaking a more radical
step, the 2000 agricultural reforms of Turkey were the result of a variety of internal
and external factors.  Internally,
decreasing the burden of agriculture on the economy after the 1997 and 1999
economic crises was one important stimulus for reforms. On the other hand,
internationally binding and non-binding pressures played an important role in
the reform initiatives. These are the Uruguay Round agreement on agricultural
trade, the accession negotiations with the EU which put ‘adjusting to the CAP’
on political agenda, the 1999 agreement with the IMF reforming agricultural policy,
and the agreement with the World Bank as an important financial supporter for the
Agricultural Reform Implementation Project (ARIP). The major objective of the
2001-2008 ARIP was a move towards a market oriented agriculture policy by the
abolition of administered prices and of input and credit subsidies, a
restructuring of agricultural state-owned enterprises and agricultural sales
cooperatives, the introduction of the Direct Income Support scheme (DIS), and gradual
reduction of tariffs and the restructuring of the agricultural production.
Under the reform program, output price supports, input subsidies and grants in
various forms were to be phased out and replaced by direct payments to farmers
based on land holding (decoupled from type or quantity of production). ARIP in
the 2000s ignited a public debate on the possible consequences of these reforms
for the agriculture and rural population. Some scholars argued that ‘…(with
the agricultural reforms) the desired results were not gotten and the
agriculture sector experienced a worse process.’18 One widely-heard contra-reform
argument was that they were externally imposed on Turkey by foreign economic
powers and therefore serve their own interests together with measured negative
impacts on the incomes of farmers and labours, on the productivity and trade
capacity of the sector, and on the prices of the agricultural products.19. The
reforms not being tailor-made to the country- specific problems in the
agricultural sector and not taking into account regional and local differences
have increased poverty in rural and agricultural areas, while leaving old
problems unsolved such as great income inequality in the sector. 20 Some others
maintained that DIS is implemented in developed countries where there is high productivity
and excess agricultural product in order to increase producer incomes without
causing a rise in production. In Turkey DIS system cannot improve the ill-balanced
agricultural structure and resolve existing problems in agriculture. On the
other hand, the reforms have been evaluated more positively in some circles and
by some authors. These positive approaches to the reforms are mainly based on
the premise that the reforms prepare the sector for competitive global trade by
liberalization and privatization, and Turkey for EU membership by facilitating adaptation
to the CAP. At TUSIAD report, Akder defends DIS for Turkey should avoid the
support policies which may increase the agricultural product prices which are already
in rise in the world due to oil prices and which are already very high in
Turkey due to production costs. Against the argument that DIS is a tool for
developed countries with production surplus in order to decrease production, he
holds that the objective of DIS is not to encourage for non-production but to
support farmers whatever they produce. Expected result is that farmers
discontinue with excess products and produce products which may more easily be
produced according to natural conditions of the farm and be sold according to
market conditions.  However, even the
reform advocates criticized the way that the reforms were applied and the
inconsistencies between the implementation and the initial plans. Reform
process could not pursue its original reasons, aims and objectives since it
lacked

Costs of Support to Agriculture ;  This rather dismal performance of the sector
coincided with an increase in the transfers to producers.1 Prior to the start
of structural adjustment program in 1999, total producersí subsidy in Turkey
showed a significant increase. The contribution of agricultural policies to the
farmers’ revenue increased by 2.7 folds, from USD 2.7 billion to USD 7.6
billion from mid-80s till the end of 90s (Table 1). Intervention to the product
prices is the main source of support to producers.

 

Table 1. Producer Support and Transfer to
Agriculture in Turkey (million USD)

Year

1986-88

1997-99

1998

1999

      2000               2001               

Producer
Subsidy Estimate

2,670

9,285

9,955

7,636

      7,840              
3,962

Market
Price Support

1,702

7,238

8,002

5,589

      6,736              
2,764

Total
Transfer Estimate

2,983

12,939

13,840

12,087

      10,649            
6,262

 

Another category in the total transfers is the
General Services Support Estimate (GSSE) which consists of private or public
general service provided to agriculture generally and not individually to
farms. Simply put, it is just the difference between the total transfers and
PSE. The most important item in this category is the financial cost of the
intervention agencies. In the recent years the costs of intervention agencies
approached the transfers individually received by the farmers. GSSE
expenditures increased, by almost 10 times, to about USD 3.5 billion during the
period.

The increase in the
financial cost of the intervention can be easily seen in Table 2. The share of
GSSE in total transfers increased from 11% in 1986-88 to almost 40% in
1998-2000.

Table 2. Indicators
of Transfers to Agriculture (%)

Year

1986-88

     1997-99

1998

1999

2000     2001

TSE/GDP

3,6

      6,7

 6,9

6,5

5,3

% PSE

13,9

      26,3

25,2

22,8

24,0        
15,0

GSSE/TSE

11,1

      28,4

28,1       

36,8

25,1          36,7

R and D/TSE

2,0

      0,3

0,3

0,2          

0,2             0,4

% CSE

-12,9

      -25,8

-25,3     

-22,0     

-25,0         -14,0