Is Turkeys fertile crescent a risk well worth taking? exploring
By Philip Clarke Europe editor
A QUICK glance at the official statistics on Turkish agriculture could be enough to put anyone off the idea of investing in the country.
Over 90% of farms are less than 20ha (50 acres) in size and the tendency is for them to get smaller, not bigger, due to the civil code on inheritance.
As well as the fragmented structure, the sector suffers from insufficient use of modern technology, weak producer selling and inefficient income support systems.
Gross domestic product in agriculture is also low, with earnings well below the $3000/ head/year national average. Growth is restrained by high interest rates and inflation, while productivity has been falling.
But the official data masks what is actually happening on the ground and opportunities do exist, insists the UK Food and Agricultural Working Groups Jeremy Elgin, who has recently returned from the GAP region in the south of the country.
"GAP stands for the Great Anytolian Project and encompasses a massive area of southern Turkey, where it borders Syria and Iraq," he says. "In the past it was known as the fertile crescent, which gives a clue to its potential."
The GAP project is mainly focused on irrigation and, when completed in about 2010, will include 22 dams on the Tigris and Euphrates rivers. It will cover an area of 75,000km sq – about the size of Scotland. As well as producing 22% of Turkeys electricity, it will irrigate 1.7m ha (4.2m acres) of prime agricultural land.
"The GAPs potential to produce and process food is enormous," says Mr Elgin. "The irrigation programmes will enable significantly higher yields from existing crops and the production of a much wider range of crops and livestock.
"The food processing sector is expanding rapidly and, in the case of dairy products, output is being constrained by insufficient quantities of fresh milk."
The GAP region is also well-placed for markets, with large and growing populations to the south, and the Mediterranean port of Iskanderun to the east. With a new airport and motorway included in the GAP plans, there is scope for exporting fresh and processed fruit and vegetables.
"There is also a working land market and land can be owned by foreigners," says Mr Elgin. "The government is still a large land owner, but is privatising its holdings. While average farm size is less than 10ha, 35% of the total land is owned by 3% of the farmers and the largest is 170,000ha.
"Local financing is possible, though interest rates are high and banks appear unwilling to extend long-term loans to small and medium-sized enterprises. There also appears to be a lack of land registry and maps."
Despite this, Mr Elgin is convinced there are serious opportunities for British agri-businesses. "The GAP regions importance as a major global food producer will only increase and the UK has the skills, capital and equipment to assist with this development."
Organic farming holds particular promise, with the conditions already in place, but with little understanding of the certification standards required for EU markets.
"There are also opportunities for direct investment in primary agriculture, equipment for precision farming, food processing, supply of genetic stock and supply of tractors and combines.
"Political events in Israel and Iraq to the south are an obvious cause for concern, but the bottom line is the population of the Arab states continues to grow and food will have to be supplied in increasing quantity and quality.
"It has also been agreed in principle to admit Turkey to the EU, which will give them unhindered access to markets in the west."
• Agriculture in Turkey will feature in a special conference on Farming in Central Europe and the Black Sea Region, being organised by farmers weekly, Trade Partners UK, Advantage West Midlands and DEFRA at Shuttleworth College, Beds on Thurs, July 11, at 4.30pm. More details from Jeremy Elgin (07860-609979). *