Could Turkey face food insecurity?

Late in 2018, after farmers had brought in their final harvest of the year, Turkey’s ruling Justice and Development Party (AKP) began a campaign against those they accused of stockpiling staple goods to manipulate prices.

Government-friendly media outlets sent reporters to film police raiding warehouses to count potatoes and onions, which were presented in the press reports in the same vein as the illicit goods found in a drug bust.

Months after likening the alleged hoarders to traitors for storing tonnes of staple goods in warehouses, two new decrees signed by President Recep Tayyip Erdoğan last week have demonstrated the dire situation of Turkey’s agricultural sector and how backward the anti-stockpiling policy was. Faced with shortages of basic products, the president has waived import duties on onions until the end of February and on other agricultural goods until the end of 2019.

The manager of the state Turkish Grain Board (TMO), Ahmet Güldal, has outlined plans to import 200,000 tonnes of onions. For the third year running, the board has also been tasked with importing a million tonnes of wheat, 700,000 tonnes of barley, 700,000 tonnes of corn, 100,000 tonnes of dried beans and 100,000 tonnes of rice by the end of May.

Similarly, imports of livestock, animal carcasses and meat have by now become routine, again with import duties waived. Last year, the state Meat and Milk Board (ESK) was authorised to import 500,000 cattle, 475,000 sheep and goats and 750,000 tonnes of red meat.

This was a move to keep down the price of meat, which in Turkey has skyrocketed. It had the added effect of crippling Turkey’s domestic livestock industry.

The government had offered incentives to livestock producers through low interest loans from state-run Ziraat Bank. The decision to later waive import duties spelled serious trouble, not only for the hundreds of entrepeneurs who had taken out loans to get into the trade, but also for two of the sector’s most established companies, Kayseri-Develi and Saray Halıcılık, which filed for bankruptcy protection in late 2018.

The disorganised and unplanned import of meat has left the ESK with 25,000 tonnes of surplus red meat in its warehouses, and the board is making preparations to export it. This has done nothing to reduce prices, which remain high everywhere except discount supermarkets BiM and A101, known for their ties to the AKP government, and another supermarket chain, Migros.

While Erdoğan and Agriculture Minister Bekir Pakdemirli have brushed off criticism of their policies to declare that agricultural producers have never had as much support, figures published by the Statistical Institute of Turkey tell a different story.

Turkey over 17 years of the AKP’s rule has gone from being a significant exporter of livestock to a net importer. It is now the biggest importer of meat and live animals in Europe.

Part of the reason for this lies in the battle against Kurdish insurgents linked to the Kurdistan Workers’ Party (PKK), which has been one of the Turkish state’s fiercest enemies since launching an armed separatist struggle in 1984.

Fighting broke out again in 2015 after the breakdown of peace talks, and predominantly Kurdish areas in east and southeast Turkey, regions that traditionally make up the backbone of the country’s livestock sector, stopped producing due to the security situation.

In addition, the Statistical Institute’s data shows, not only has production of almost every staple grain, pulse and vegetable decreased significantly, so too has production of the hay used to feed livestock. Turkey became an importer of hay in 2010.

So with food production down so dramatically, what has taken its place? The answer, in part at least, is flowers. Orchid production in particular has grown by more than 16 percent, and chrysanthemum production is up 7 percent.

The agriculture minister recently advised Turks to cut down consumption of red meat to keep prices low. Word is already circulating in Ankara political circles that Pakdemirli will be one of the ministers to face the pruning shears when Erdoğan makes changes to his cabinet after local elections in March. Besides questionable remarks, the minister has had a tough time since being appointed last July.

Russia, once one of Turkey’s biggest export markets for fruit and vegetables, cut imports completely in 2015 after Turkey shot down a Russian jet over the border during operations in Syria.

Though the embargo has been lifted, exports to Russia are still far below pre-embargo levels. Pakdemirli managed to raise tomato exports to Russia by 50,000 tonnes this month, but the current quota of 100,000 tonnes is still only a third of its previous level. In return Turkey will waive import duties on 5,000 tonnes of Russian red meat. Meanwhile, Russian exports of grains and other agricultural products to Turkey in 2018 were worth $1.9 billion.

The most serious crisis faced by the minister came last September, when tens of thousands of cattle imported from Brazil were discovered to be suffering from anthrax poisoning. The outbreak led to scores of people admitted to hospital and quarantines across Turkey, including in Istanbul and Ankara.

It would be remiss, however, to pin the blame on Pakdemirli. Since the AKP came to power, institutions that had played a crucial role in the agriculture sector have either been shut down or privatised.

Meanwhile, though tariffs on tractors and farm machinery were raised in 2017 to protect Turkey’s domestic producers, Indian company Mahindra and Mahindra Ltd. took hold of a significant share of the sector that year, when it bought 75 percent of farm equipment business Hisarlar Makina and acquired full ownership of tractor maker Erkunt.

The government’s privatisation of 14 Turkish sugar factories last year has already left its mark on sugar beet producers, whose production had dropped by more than 10 percent by the year’s end. Production is expected to continue falling this year, while imports of corn syrup are expected to increase.

As the Turkish lira fell by 28 percent against the dollar last year, driving up food prices, the government set up a committee to keep prices under control and decrease food imports. Yet the prices of fuel, fertiliser, pesticides, seeds, fodder and vaccines – necessities for producers – continued to rise as the lira lost value, leaving producers who faced price controls on their goods no option but to cut production.

The latest Agriculture Ministry figures show 3.2 million hectares of farmland have lain fallow. Meanwhile, some of Turkey’s most productive farmland and pastures were opened for the construction of new power plants.

Contractors with links to the government have been granted permission to build hydroelectric stations particularly in the Black Sea region, where the power plants block the flow of rivers and streams to farmland.

Erdoğan’s government is still tackling 20-percent inflation. A large part of this is down to food prices, and Treasury and Finance Minister Berat Albayrak has responded by setting out a new law designed to cut out the commission charged by middlemen by assigning parliamentary commissions to deal with logistics. The law aims to cut down added costs from an average of 170 percent to 30 percent.

But this will clearly not solve the problem. First, producers need organisation and support. Against the $17 billion spent annually on food and livestock imports, only 14.5 billion lira ($2.7 billion) went to subsidies for domestic producers in 2018, with 16.1 billion lira set aside for that purpose in the 2019 budget.

To qualify for government support, producers are not only required to use certified seeds, but also to be free of debt to banks and water and electricity suppliers. Since domestic production of certified seeds is far outweighed by demand, producers will again be forced to import.

The country lost its place among the world’s most self-sufficient food producers 10 years ago, and is now quickly on its way to being import-dependent and open to food insecurity.

Erdoğan’s government took drastic action late last year, enlisting police and local constabularies to enforce a 10-percent discount on food prices. Nevertheless, while inflation dropped by 0.44 percent in December, food prices rose by 1.4 percent. And, against the country’s 4.5 percent growth in the third quarter of last year, growth in the agriculture sector was limited to 0.7 percent.

The six products with the highest price inflation in December were all staple foods, with aubergines in first place at almost 37 percent, and onions and potatoes in fifth and sixth place at 16.4 percent and 9.36 percent, respectively.

Without the production reforms, strategic support and subsidies necessary to breathe life into Turkey’s ailing agricultural sector, Erdoğan’s strategy of waiving import duties on food will likely be repeated again and again this year.