TÜRK EKONOMİSİ - Deneme Sınavı - 1

They, as physiocrats, believed that the added value or real wealth can only be created through agricultural production, thus accepting that the only productive labor is agricultural labor.

Agricultural production and agricultural products have their own characteristics that create substantial differences compared to other parts of an economy. Let us have a look at the most important characteristics:

Agricultural production (still) relies mainly on climate conditions.

For many types of agricultural products, income and price elasticities of demand are considerably lower

Agricultural production has its own characteristics of supply

Agricultural goods production is geographically concentrated.

Agricultural production is bulky

The law of diminishing returns is an extremely important issue for agricultural production, particularly in conventional production.

There are mainly two types of agricultural producers, the first being the agribusinesses and the second being individual/small farmers.

Turkey is renowned for its high-quality tea and its level of production. The level in Turkey covers more than 5% of the whole production in the world and Turkey alone is one of the largest markets for tea by itself.

we can analyze current problems in Turkish agricultural sector in five separate segments:

• Small arable land per producer • Insufficient capital investment • Insufficient generation of added value • Domestic price levels and multinational competition • Rapid depletion of natural resources

World Wildlife Fund (WWF) claims that “half of the topsoil on the planet has been lost in the last 150 years. In addition to erosion, soil quality is affected by other aspects of agriculture. These impacts include compaction, loss of soil structure, nutrient degradation, and soil salinity”.

Production The most important and the largest part of the whole agricultural sector in Turkey consists of field crops production. The production levels for product groups are represented in Table 4.3:

Table 4.3 Changes in Production Level, Product Groups, 2002-2018.

Product Type    2002 (tonnes)    2018 (tonnes)    % Change (2002-2018)

Field Crops        58,124,516        64,404,453           10.8

Fruits                13,273,350        20,494,028            54.4

Vegetables         25,823,567        30,032,827           16.3

Tea and Spices   884,700            1,784,876             101.7

According to World Bank data, the latest measurement of economically active children between the ages of 7 and 14 was generated in the year 2006. The calculated rate of child employment in the Turkish agricultural sector seems to be 57.06%. This means that more than half of the economically active -working- children are employed in the agricultural sector in Turkey.

Compensation payments and livestock supports account for about 50-55% of the total support value since 2013. Another important proportion is the area-based supports with about 20-25% while other supports and biological and bio-technic control combined account for the rest.

It can be deduced from Table 4.7 that between the years 2002 and 2018, both the amount imported and the amount exported tripled in terms of fruits but the important subject here is value. In about one and a half decades, the total import value went up from 34,865,000 $ to 513,240,000 $. In other words, the increase in value is about 13.7 times. However, for the exports, the value went up from 392,000,000 $ to 3,767,263,000 $, corresponding to an 8.6 times increase.

Similar to GDP ratio, as countries develop, their agricultural/rural employment levels in whole employment tend to decrease and this is in high correlation with labor-saving capital stock. However, for underdeveloped and emerging countries the ratio remains relatively higher despite a general tendency to resemble a decreasing trend.

The vast majority of countries support farmers by at least one but usually a combination of;

• Income supports

• Trade barriers

• Subsidies

• Price controls

Wheat, sugar beet and barley are the largest products in the agricultural sector, two of them -wheat and sugar beet- being produced more than 20 million tonnes in 2017.

Cottonseed and cotton lint are agricultural products with high added value and are important ingredients for the textile sector. According to the Food and Agriculture Organization of the United Nations, Chinese demand for cotton is declining while Indian demand for it increases along with the rest of the world. Turkish cotton production is not self-sufficient and Turkish imports trend on cotton tends to increase, similar to Indonesia and Vietnam...The trend for cotton production has clearly increased until early 1970s and after that it became weaker despite keeping the trend direction. After the year 1994, the trend started gaining strength in favor, yet it once again lost its pace in the early 2000s. As seen in the graph, the trend seems to be stabilized since then. Note that a sharp decrease in production was captured after 2007 and it lasted until 2009, arguably being a result seen after a global economic crisis, which resulted in a fall in global demand.

Using this as a starting point, we can analyze current problems in Turkish agricultural sector in five separate segments

• Small arable land per producer

• Insufficient capital investment

• Insufficient generation of added value

• Domestic price levels and multinational competition

• Rapid depletion of natural resources

For example, according to “Standard Layout for UNECE Standards on Fresh Fruit and Vegetables 2017” an agricultural product in this category must have the minimum requirements of being:

• Intact

• Sound

• Clean (at some point, soil is acceptable)

• Free from pests

• Free from damage caused by pests

• Free of abnormal external moisture

• Free of any foreign smell and/or taste

After a close look at the Turkish agricultural sector, it is useful to grasp and understand how the sector finds its place in the whole economy and how this place changes in time. In this section, we are going to take a look at macro level data for production, GDP ratio, employment and foreign trade of the sector as a whole.

According to Turkish Exporters’ Assembly, the largest exports from the sector were made to Iraq with a total worth of 3,634,464,000$ while Germany and the United States followed it with 1,525,941,000$ and 1,005,459,000$ respectively in 2018. In the 2014-2018 period

Physical capital investments embodying modern technologies are of high importance for the sector in terms of productivity increase.

The ministry has five subsidiaries:

• Ataturk Forest Farm Management

• The General Directorate of State Hydraulic Works

• Turkish State Meteorological Service

• The General Directorate of Forestry

• Turkish Institute of Water