Turkey rapidly becoming importer of farm goods

Inflation is continuing to be a major issue for Turkey; consumer inflation at the end of 2014 will be between the 9 and 10 percent band. The biggest headache in inflation is food inflation, with steep hikes in food prices being the biggest complaint of the low and middle income classes, which constitute the predominant segment of the population. The reason for this is that kitchen expenditures constitute 35-40 percent of the total budget of this segment.

With the onset of a drought this year, the prices of certain vegetables and fruits have become non-affordable. It is an accepted opinion that agriculture is being neglected and adequate support is not being provided for agriculture from the general budget. As a result, Turkey, which used to boast that it was self-sufficient, is rapidly becoming a food-agriculture importer. It is experiencing “food supply insecurity,” alongside energy insecurity.

Turkey has a significant and major agricultural potential. According to Turkish Statistical Institute (TÜİK) data, as of end of 2013, there was 38.4 million hectares of agricultural land, 14.6 million hectares of which grassland, with the remaining 23.8 million hectares being used for agricultural production. There is still an important agricultural potential in Turkey despite the rapid loss of farm land in favor of residential and industrial developments. However, the agriculture sector, where 20 percent of the active population works, has not been modernized. The agriculture sector’s growth rate in 2013 was 3.5 percent; its share in gross domestic product was 7.4 percent. In 2014, there will be no growth in agriculture; instead, there will be a shrinkage – albeit of 1 percent, meaning agriculture’s share in the national income could even stay at around 7 percent.

The food sector stands out in consumer inflation; as of November, their annual price hikes reached 14 percent, while the “producer prices” of industrialists in the food sector have increased nearly 19 percent. This also means there will be new price hikes in the coming days for the consumer in food.

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