Turkey tackling a ‘meaty’ problem
There is something strange going on nowadays: During every visit by President Recep Tayyip Erdoğan to foreign countries, a ‘meat deal’ appears on the agenda. For example, just in fall of 2017, Erdoğan went to Poland, Bosnia, and Serbia, where he returned from all countries having made a deal to purchase meat from them.
Even Sudan - a country to which Turks send meat donations every year during the Feast of Sacrifice - offered to sell Turkey good quality meat for the reasonable price of 4 TL per kilogram.
When we take a closer look at what’s happening, we see quite a few interesting things. For example, in November 2016 the Minister of Customs and Trade, Bülent Tüfekçi responded a parliamentary inquiry about meat imports but denied giving information about foreign companies selling meat to Turkey on the grounds that this information is a ‘trade secret.’
However, one can easily attain this information through the U.S. Department of Agriculture (USDA), from which we discovered that by the end of 2017 the number of countries Turkey imported livestock and carcass (raw meat) from increased to 26 and that Turkey imported carcass meat from 11 of those countries. The information from the USDA also pointed out that Turkey’s meat imports will continue to increase in 2018 and cutting the price of meat in Turkey is not a problem that can easily be tackled.
According to the figures provided by the Turkish Statistics Institute (TÜİK), beef production in Turkey has decreased significantly. As of September 2017, total beef production was equal to 1 million 65 thousand tons, meaning an annual beef consumption of 12,5 kilograms per person. Don’t forget that in just 2014, the Minister of Agriculture at the time, Faruk Çelik, was proud of increasing the annual consumption of meat per person to 14,7 kilograms. Morever, this figure does not take into account the meat consumed by refugees living in Turkey and tourists visiting the country; hence, the annual per person consumption is in fact lower.
The USDA points out important problems related to this decrease in production: “60-70 percent of the feed used in Turkey is imported. Hence, the price of animal feed increases as Turkish lira depreciates. In addition to that, depreciation increases the prices of fuel and in turn costs of the producers. As a result, animals are sent to slaughter without being sufficiently fed and even if the number of animals sent to slaughter increases, the amount of meat production falls.
According to numbers provided by the National Meat Council, last year, the wholesale price of carcass beef and lamb increased by 5 and 12,90 percent, respectively. The annual inflation in consumer prices is 12,98 percent, while it is 17,30 percent in producer prices. Therefore the increase in meat prices is lower than inflation, which undoubtedly a result of increase in imports.
Turkey imports meat in two ways. The first one is importing livestock. In 2016 the amount of livestock imports raised to 426 thousand, increasing by 177 percent. In July 2016, the government decreased custom duties and allowed the Meat and Milk Institute (ESK) to buy 500 thousand cattles and 475 thousand sheeps. That means Turkish imports doubled in 2017.
Moreover, despite the increase in imported livestock, the number of livestock in Turkey has not increased in a parallel fashion, which obviously means that the animals were slaughtered immediately.
The second method in meat imports is to buy carcass and nowadays you can see carcass being sold in many supermarkets targeting lower income families. According to figures provided by the Minister of Agriculture Eşref Fakıbaba, Turkey imported 41 thousand tons of carcass meat between 3 July 2016 and 20 July 2017 and it was expected to import 66 thousand tons between 20 July-31 December 2017. The ESK has planned to import 51 thousand tons carcass meat between January 1-May 31 2018.
These figures only show the amount of meat imported by the ESK. In addition to these, for the private sector, the duties for carcass imports the taxes for importing carcass meat was decreased to 40 percent from 135 percent in 2017 until the end of 2018. This is also why Georgia and Iraq are among the countries that are highest meat exporters to Turkey, although the ESK does not purchase meat from those countries. It is the private sector who buys from these two.
According to the reports of the Ministry of Agriculture, the ESK purchases meat from Belgium, France, Poland, Romania, Latvia, Spain and Hungary. We should add Bosnia Herzegovina and Serbia to the list of countries which Erdoğan recently struck a deal with for purchasing meat from. Therefore, the number of countries Turkey buys carcass meat has increased to 11.
Moreover, the foreign companies in Europe the ESK purchases meat from is another problem. Most of those companies buy cattle, pig and white meat from other countries. That means there is no guarantee that the meat they are selling to Turkey is produced domestically.
In summary, this is what is happening: The government is trying to keep the price of red meat low ahead of the upcoming 2019 elections by boosting imports and countries that see what is happening are jumping at the opportunity to enter to the Turkish market.
Meanwhile, the subsidies paid to the 1.1 million meat producers in the country have been increased. Ziraat Bank and the Agriculture Credit Cooperative have postponed the producers’ debt payments and are providing new credit with lower interest rates.
Yet, none of the above-mentioned measures offer a permanent solution to the problem of meat production in Turkey.