AGRICULTURAL OVERVIEW

IN TURKEY

REPUBLIC OF TURKEY

MINISTRY OF FOOD AGRICULTURE

AND LIVESTOCK

“Improving Agricultural Market Performance:

Creation and Development of Market Institutions”

THE 10TH MEETING OF THE COMCEC AGRICULTURE WORKING GROUP

28 September 2017, Ankara, TURKEY

1

Serkan YENAL (Phd) Coordination and Evaluation Branch Manager

2

INTRODUCTION

ABOUT TMO

DUTIES

FINANCIAL STRUCTURE

ORGANIZATIONAL STRUCTURE

PRODUCTS IN THE FIELD OF TMO’S ACTIVITY

STORAGE

CRITERIA FOR MARKET REGULATION

WHEN DOES TMO INTERVENE IN THE MARKET ?

MARKET REGULATION INSTRUMENTS

POPPY ACTIVITIES

SOCIAL PROGRAMMES

LICENCED WAREHOUSE SYSTEM

CONCLUSION

ABOUT TMO

Founded in 1938 as an

institution running on state

capital

Related with the Ministry

of Food Agriculture and

Livestock

Has administrative,

financial and decision-

making autonomy

Headquartered in Ankara

3

DUTIES

• To regulate cereal markets.

• To produce morphine and its derivatives from opium poppy which is required by pharmaceutical industry.

• To keep extraordinary cereal stocks that can be used in the state of emergency.

• To carry out the duties for other agricultural products which is given by the Cabinet Decree.

4

FINANCIAL STRUCTURE

• Capital is 2 billion 550 million TL

• Revised Programme Budget for 2017 is 6 billion 224 million TL (1.85 billion USD, 1.52 billion EUR)

• Profit for 2016 is 172 million TL (50.1 million USD, 42.0 million EUR)

Financial Resources;

• Capital

• Sales Revenue

• Internal and External Loans

• Treasury Loan

5

ORGANISATIONAL STRUCTURE

Decision Making

Body

Board of Directors General Directorate

6

Consists of 1 Chairman and 5 members:

• Chairman of the Board is the General Manager,

• Two members from Ministry of Food Agriculture

and Livestock,

• One member from Undersecretariat of Treasury,

• Two members from TMO Deputy General

Directors.

General Directorate consists of a General Director, 3 Deputy General Directors with headquarters and regional organisation.

Head Office;

• Inspection department,

• Legal advisory,

• 10 head offices

Regional Organisation;

• 33 Branches

• Afyon Opium Alkaloids Plant

• 116 Sub-Branches

• 71 Equipped Centers

Total: 221 permanent workplaces Total number of staff: 5.149

Executive

Body

PRODUCTS IN THE FIELD OF TMO’S ACTIVITY

Wheat

Barley

Rye

Triticale

Oat

Corn

Paddy Rice

CEREALS POPPY Other products

assigned by

Cabinet

Decision (Hazel

Nut-Raisin)

7

8

CRITERIA FOR MARKET REGULATION

• Domestic and foreign market prices

• Product costs

• Output

• Sustainability of production

• Producer Price Index (PPI) - Consumer Price Index (CPI)

• Food price inflation

• Carryover stock

• Public expectations

9

10

WHEN DOES TMO INTERVENE IN THE MARKET?

In the event of;

• The drop of producer prices below the level at which the

sustainability of production is ensured

• Enormous price increase to the detriment of the consumer

• Fluctuation in the market due to speculations

• The influence of fluctuations in the world market on domestic market

• Supply deficit in the market

MARKET REGULATION INSTRUMENTS

• Purchasing cereals from producers, producer organisations, merchants and cooperatives

• Providing advance payment for producers through depository purchasing

• Providing loan for producers, producer organisations, merchants and cooperatives through depository purchasing in return of warehouse receipt

• Importation and exportation

• Various product sales methods

• Strategic stock management

• Public disclosures

• Customs duty regulations

• Monitoring domestic and foreign market

• Consulting with non-governmental organisations (NGO) and private sector organisations

11

POPPY ACTIVITIES

Giving permission for

opium poppy cultivation

and purchasing poppy

capsules are carried out

only by TMO.

Opium poppy production is

carried out in the framework

of annual planning for a

limit of 700,000 decares

given by United Nations.

12

SOCIAL PROGRAMMES

• Pakistan; 50,000 tons of flour (2005),

• Palestine; 15,400 tons of flour (2006-2016) and 2,155 tons of rice (2016),

• Somali; 50,000 tons of wheat equivalent flour (2011-2016),

• Syria; 35,000 tons of flour (2012 - 2015) and 50,000 tons of wheat equivalent flour (2016)

Also in 2017, 86 thousand tons of wheat equivalent flour to be granted for Somalia, Syria, Palestine, Yemen and South Sudan has been tendered.

International Aids: TMO aids flour to needy countries due to natural disaster, drought etc. as well as aiming humanitarian aid with the Council of Ministers’ Decision.

13

The Campaign for Preventing Bread Waste : It was initiated in 2013. The

Campaign was disclosed as a “model practice” to the world by FAO.

Raisin Distribution to the Schools: Our institution was assigned with providing

and distributing raisins to the students of preschools, practice classes, nursery

classes and first graders (elementary school) in 2016. Raisins are distrubuted to

5.7 million students throughout the country in 2016/17 education period.

LICENSED WAREHOUSE SYSTEM

14

Agricultural Products Licensed Warehousing Act No. 5300 was published in 2005.

In order to make the system functional, TMO-TOBB LİDAŞ (50% TMO share - 50% TOBB share) was established in 2010.

TMO - TOBB LİDAŞ is the first company that got licence and started its activities in 2011.

3,26 million tons of licensed warehouse is being built by TMO with long term renting guarantee.

15

CONCLUSION

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THANK YOU

Presentation Content

• General information and statistics

• Marketing of Agricultural products and value chain

• Markets and price creation

• Market Regulators/Institutions affecting the Market

• Food and Agricultural Products Market Monitoring

and Evaluation Board

• Problems and solution suggestions

AGRICULTURE IN TURKEY

Total Population 79 Million

Rural Population 17 Million(22%)

Urban Population 63 Million(78%)

81 Province

941 City

40.000 Village

Land Usage Area Mha %

Agricultural Land 38,2 49,1

Farm (Cultivated) land 24,0 31,5

Natural grass land 14,6 18,8

Forest Land 21,5 27,6

Setlement and others 4,0 5.0

Total 77,8 100.0

AGRICULTURE IN TURKEY

As in the whole world, agriculture in our country

an increasing sector of importance

Agricultural sector is important

• feeds 79.5 million country and 350 million

tourists,

• $ 56 billion Agricultural Income

• $ 17 billion with Agricultural Export

• contains 23% of our population,

• provides 24% of employment,

• constitutes 8% of GNP,

• 12% of total exports are realized

• Supplies raw materials to industry

• And supplies food safety

IN EXPORT

Nut, Apricot, grapes,

fig and quince 1st

Wheat flour, cherry ,

Yoghurt, Macaroni,

Lentil, lemon,

Mandarin, Chickpea

(Nohut), Orange, Olive

and Tomatoes

2n

d-5

th

Grape, Tobacco, Chess

nut, Strawberry, Olive

oil, Egg, Aubergine and

Peach 6th

-10

th

IN PRODUCTION

Nut, Apricot and Cherry

1st

Melon, Water Melon,

Strawberry, Fig, Lentil,

Olive, Apple, Tomatoes,

Tea, Antep pistachio, Nut,

Walnut, Aubergine, Sheep

milk, sugar beet and honey 2

nd

-5th

Wheat, Barley, Grapes,

peach, Mandarin, Lemon,

Almond, Olive oil and

sheep meat. 6th

-10

th

TURKISH AGRICULTURAL ECONOMY IS A GLOBAL ACTOR The first Agricultural Economy in EU

Turkey is sufficient country in terms of food

1,707 agricultural and food products were exported in 190 countries in 2016.

DEVELOPMENTS IN AGRICULTURE (2003-2016)

Crop production increased;

from 98 million …... to 117 million ton

Livestock production;

12 million ton -----23,5 million ton

Value of agricultural production;

24 Billion $ ----- 56 Billion $

Agricultural export;

4 Billion $ -----17 Billion $

TURKEY in the World in 2014 Turkey has exported 1,681 varieties of agro-food products to 190 countries.

Living Area

(17 million)

Employment

(5 million)

Food

Production

Row Material For

Industry

Export İncome

TURKEY is the heart

of the Region

RUSSIAN

FEDERATION

TURKISH

REPUBLICS

NORTH AFRICA

MİDDLE EAST

TURKEY is up to 4 hours flight distance where have one third of world GDP and about one fifth of world population.

RICH BIODIVERSITY 12.054 Plant Species grown in Turkey. of these species, 3,906 are endemic.

Kaynak: FAO, DTÖ, BM

EU-27

7

AGRICULTURAL SECTOR IS REGIONAL POWER AND TRADE BRIDGE

In this Geography

Population 1,3 Billion Agricultural GNP 564 Billion $ Agricultural Export 578 Billion $ Agricultural Import 680 Billion $

National Document(s) Related To Strategic

Framework For Agriculture

WHAT HAPPENED? WHAT IS HAPPENİNG?

• 1) National Rural Development Strategy (2007-2013 / 2014-2020)

• 2) Rural Development Plan (2010-2013)

• 3) Rural Development Plan (2015-2018)

• 4) Yearly Programmes

• 5) Rural Development Plan Monitoring Committee

• (2015-2018)

• Rural Development Strategy and Action Plans; is prepared with

- Under the coordination of our Ministry (GTHB),

- Technical support of the Ministry of Development and

- the participation of relevant Ministries and Institutions

NATIONAL DOCUMENT(S) RELATED TO STRATEGIC

FRAMEWORK FOR AGRICULTURE

STRATEGİC PLAN (2013-2017)

Strategic Topics

1. Agricultural Production

2. Food Security

3. Phitosanitary, Animal health and

welfare

4. Agricultural Infrastructure and

Rural Development

5. Capacity building

• Agricultural Strategy

Document (2004)

• Agricultural Law (2005)

• MoFAL Strategic Plan

(2013 / 17 - 2018 / 22).

• There is very strong relationship between rural development and

agriculture

• Rural development includes multi-sectoral activities

Ministry Studies

All production sites and stakeholder are registered (ÇKS - TÜKAS -

TIKAS ...)

Farm Accounting Data Network established

Each kind of product is kind of;

- Which region?

- which provinces and districts?

- even in which parcel of the operator and how much inland is it

produced?

- production technique, production costs

- what production inputs are used?

- sales and revenues traceability provided

Marketing Information system was established and monitoring studies

started

- As a pilot study; the prices of the 35 products in 4 provinces, including

underground vegetable crops, are monitored on a daily basis.

What is a Marketing Information System? Cost information of agricultural products based on county /

business,

Input prices,

Seed,

Agricultural medicine,

Fertilizer,

Workmanship,

Mechanization,

Transport

Agricultural product income based on county / business;

The yields obtained from unit area /

The prices of the farmers,

Net income on business / district basis.

Integrating with the Wholesale Market Hall Information System

(based on district data via the database)

Product Quantities,

Prices,

Product entry dates

What is a Marketing Information System?

Monitoring the prices and quantities of agricultural products

from the producer to the last consumer;

Quantity of Production,

The quantity offered on the market,

The marketing costs from the production point to the last

consumption point,

Prices of production point, state, last consumption point

(such as local district bazaar, markets)

All imported agricultural products;

Prices,

Quantities,

Origin,

Product entry dates

Evaluate the compiled information to develop decisions for

the benefit of the producer and consumer

Why Marketing Information System?

Generally, the producer gives the production decision according to the

production conditions as well as the prices of the previous period. This

leads to significant fluctuations in the prices of agricultural products.

By Market information systems;

- Before deciding on production, it may be possible to know what

products will be added and the possible prices.

-Measures may be taken to reduce risk and uncertainty in

production,

-It will have the opportunity to make market-oriented production

planning that will increase its income.

Accurate and Current Data

Right Policies

Accurate Decisions

2015

Agricultural Information System

• Spatial databases

• Agricultural meteorology and observation

stations

• On-line monitoring and evaluation

• Risk Management

Crisis Management Risk Management

AGRICULTURAL INFORMATION SYSTEM AND MARKET MANAGEMENT (Management Support with Best Decisions)

Agricultural Production Existence

Management

da m3

ad

Agricultural Production

PRODUCTIVITY Management

kg/da

Agricultural Production

QUALITY Management

₺/kg

SUSTAINABILTYManagement

±₺varlık

Agricultural ECONOMY Management

₺existence+ ₺product

Agricultural Information System: Agricultural observation, Registration, Integration of Information and Management Systems into a Common Economic Community

Paydaşlar: Bakanlık Üretici Tüketici Birimler Kooper. Finans Sigorta ………..

Agricultural Production

MARKETING Management

₺x%

₺

talep

TBS

18

• All parcels will be recorded via TÜKAS .

• The current AGRICULTURAL INVENTORY will be created by TÜKAS.

Agricultural Production Registration System

Marketing Environments of Agricultural

Product

Licensed Warehousing

Product Specialized Stock Exchanges

Commodity Exchange

Live Stock Exchange

Auction Market

Wholesale Market Hall

Futures Market

Structuring of Foreign Trade

Cooperative, Producer Association roles

The marketing of agricultural

products in our country has a

complex structure.

• In very different market models,

• Multiactors

• Under the supervision of

different ministries and

institutions

Agricultural Product Markets, Organizations

and Marketing Actors

Producers

Agrıcultural

Products Marketplace, Organization Marketing Actors

Processor,

Wholesaler,

Retailer

Plant

Products

Livestock

Products

Fisheries and

Aquacultural

Products

public

bussines/economic

enterprise

Turkish Grain Board

Wholesale Market Hall

Auction Sale

District bazaar

Stock Exchange

Cooperatives

Supermarkets

Food stores

Others

Public

bussines/economic

enterprise;

Trader

Middleman/Broker

Producers

Bussinesman

Supermarkets

Greengrocer

İmporter and Exporter

Warehouseman

Restaurant, food

factory

Hotels, Hospitals,

Hostels

Other

Marketing Margin; product processing, transportation,

labor, tax, commission and so on. Depends on the

expenses.

-Not harvested

-Sold at the production stage,

-Unsufficent standard,

-Unpackaging, and unclassified

products.

-Producer prices; it is the lowest price on

the marketing channel.

-enwrapped

-Packed,

-Processed,

-Classified products.

-Market prices: it is the highest price on

the marketing channel.

PR

OD

UC

ER

Harvest

Transport Processing

Classifiying

Packing Transport

0.90 TL +0.20

+0.25 +0.16 +0.05

2,48 TL

Cherry Tomato High Tech. Glasshouse,

Selected seed,

Quality production,

Uniform product as

requested by the

consumer.

Bulk Tomatoes

2,65 TL. + 0.30

+ 0.10 +0. 61 +0.30 +0.32 +0.05

6.88 TL 4.28 TL

1,56 TL

Harvest

Transport

CO

MS

UM

ER

Factors Affecting Marketing Margin

1. Product variety and production system, Marketing channels - Direct sales, - Sales with intermediaries (single-lot) - sales through stores - ... 3. Operations and costs in marketing channels - product direct sale - product processing, packaging, packaging, - Transportation (distance between production and consumption centers) - Losses 4. Storage and stocking 5. Organization 6. Export and import 7. Taxes and commissions

The features of agricultural products, the length of marketing channels, the

surplus of intermediaries cause the margin to develop against the

producers.

Examples of Marketing Margin

100 kg. CHANGE OF SALES PRICE AT LOCAL DISTRICT MARKET

PRODUCT PRICE CHANGE SCALE *

DEGREE FOR PRODUCT PRICES (TL/kg.)

QUANTITY OF SALES (kg)

BEST PRICES SALES (THE MOST FRESH AND EXPENSIVE) 4,00 20

GOOD PRICES SALES (FRESH, EXPENSIVE) 3,50 20

AVERAGE PRICES SALES (NORMAL) 2,25 18

LOW PRICES SALES (UNFRESH PRODUCT) 1,75 17

VERY LOW PRICES SALES (WİZENED PRODUCT) 1,00 10

EVENING MARKET SALES 0,50 5

TOTAL 100

26

WHO HOW MUCH DOES TAKE PORTION FROM SHELF PRICES?

FRANCE

vergi

27

Oranlar TÜİK üretici ve tüketici fiyat endeks grubu içerisindeki fiyatlar baz alınarak hesaplanmıştır.

Üretici Fiyatı

(TL/kg)

Tüketici Fiyatı

(TL/kg)

Üreticiden Tüketiciye

Fiyat Değişimi

(%)

Kiraz 3,6 6,5 80,6

Dometes 1,2 1,9 58,3

Elma 1,1 2,6 136,4

Kaynak: TÜİK, 2015 yılı ortalama ürün fiyatları

WHO HOW MUCH DOES TAKE PORTION FROM SHELF PRICES?

TOMATO SALES GRAPHICS

MANDALİNA DETAYLI SATIŞ GRAFİĞİ

WHAT HAS BEEN DONE ? WHAT WILL BE DONE ?

30

• The effectiveness of the marketing information system is being improved.

• Production planning according to the market demand

will be made. • Storage, packaging and processing facilities are being

developed. • Efforts are being made to ensure the integration of

agricultural subsidies with marketing. • Efforts are being made to increase the effectiveness of

producer organizations.

31/13

Coordination: Ministry of Food, Agriculture and Livestock

Secretariat: The Central Bank

Members:

Minister of Economy, Minister of Customs and Trade, Minister of

Finance, Minister of Development, Undersecretary of Treasury, Head

of Central Bank, President of TURKSTAT

Goal:

Food and agricultural products; to monitor and evaluate the short

and long term supply and demand, export-import and production-

consumption changes and the developments in these changes and

developments in the distribution chain, and to make

recommendations about the measures to be taken and the policy to

be implemented if necessary.

Food and Agricultural Product Monitoring and Evaluation Committee.

32/13

Duties of Food and Agricultural Product Monitoring and Evaluation Committee.

- To monitor and evaluate food and agricultural product markets.

- If necessary, make suggestions about the measures to be taken and the policy to

be implemented.

-To ensure cooperation and coordination among the institutions.

- To create subcommittees, advisory groups, temporary and permanent working

groups so that the activities of the committees can be carried out in an integrated

manner and in an efficient manner and coordination can be ensured.

-To evaluate the results of the subcommittees, advisory groups, and the results

submitted by the temporary and permanent working groups and to make a

decision.

- To analyze market regulations in harmony with the Government Plan,

Development Plan, Medium Term Plan, Strategic Plans and 2023 Vision.

- Report decisions to the Economic Coordination Board.

33/13

Marketing Margins in Agricultural Products.

The difference between producer prices and consumer prices

has always been a matter of debate and research in all

countries.

Goal

- Ensuring price stability.

- Prevent price fluctuations.

- To protect both the producer and the consumer.

Agricultural Market Institutions

www.icpcem.com

Islamic Countries Products Common Exchange & Market Web Portal for International Collobration and e-Trade for OIC member

countries producers

The project “Establishment of Database, Network Connection and Web Pages of

Smallholders/Family Farmer’s Agricultural Cooperatives between COMCEC Member

Countries”

and under project the establishing

The purpose of this project is to facilitate international trade and market

place among Organization of Islamic Cooperation Member countries.

Current Economic Cooperation with other Members of the OIC Countries:

37/13

• Each of OIC member country should be support

www.icpcem.com for expanding of members of portal.

• There should be established and kept each agricultural

product’s datas for database and digital records which have

been taken by member countries according to each production

session.

THANK YOU FOR YOUR ATTENTION Dr. Melik AYTAÇ melik.aytac@tarim.gov.tr

Thanks for listening

Questions, comments and

suggestions are welcome

Historic Peninsula, Istanbul

İslam İşbirliği Teşkilatı üyesi ülkelerinin ve üreticilerinin refahı işbirliğinin geliştirilmesi ve dayanışmanın güçlendirilmesine bağlıdır.