A Report on the significant economic and agricultural changes in Turkey.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
Turkey- the Next Rising Tiger
Agriculture in the Economy
Muhammed Ali Alkis
Economists generally describe Turkey as a newly industrialized country, while the World Bank and The
Economist magazine describe it as an emerging market economy. Some economists even describe it as
a “Eurasian rising tiger”.
Turkey – The Next Rising Tiger?
A Report on the significant economic and agricultural changes in Turkey
Turkey and Turkish Economy
Turkey is a democratic and secular country located in Western Asia and Southeast Europe. Besides
being a bridge between two continents, Turkey is a financial gateway for the region which welcomes the
whole world. Turkey has 74.7 million citizens in its 783,562 sq km of land. Turkey is slightly larger
than Texas in terms of total area. Turkey’s official language is Turkish and 99.2% of the population is
Muslim. Seventy percent of the population lives in urban areas whereas 30% of the population lives in
rural areas. The estimated urbanization rate is 1.7% annually. The most populated cities are Istanbul
with 13.6 million people, Ankara (the nation’s capital) with almost 4.8 million, and Izmir with 3.9
million. Seventy-two percent of the population is under the age of 35 and 40 % is under the age of 15.
Turkey’s literacy rate is 88.7%. In 2010, Turkey’s GDP was the 17th largest in the world at $735 billion
($13,400 per capita).
The Turkish economy is mainly driven by the service and industry sectors, but the traditional agriculture
sector is still important, as it accounts for nearly 30% of total employment. Turkey is also an important
producer of textiles; motors, ships and other transportation equipment; construction materials and home
appliances. Turkey also has some important natural resources such as coal, copper, marble, boron and
iron ore. Economists generally describe Turkey as a newly industrialized country, or an emerging
Turkey has the 23rd largest labor force in the world with 25.64 million citizens. Including Turkish
people working abroad, this number reaches 27 million. Both export and import rates are rapidly
increasing. r. Imports rates changed from $140 billion in 2009 and $185 billion in 2010 to $240 billion
in 2011. Turkey’s main imports include machinery, chemicals, semi-finished goods, fuel, and transport
equipment. Turkey imports from all over the world, mainly Russia (11.6%), Germany (9.5%), China
(9.3%), U.S. (6.6%), Italy (5.5%), France (4.4%), and Iran (4.1%), based on 2010 imports. Export levels
rose from $102 billion in 2009 and $113 billion in 2010 to $134 billion in 2011. Turkey exports many
things including apparel, foodstuffs, textiles, metal manufactured goods and transport equipment.
Turkey primarily has European export partners; including Germany (10.1%), United Kingdom (6.4%),
Italy (5.7%), France (5.3%), Iraq (5.3%), and Russia (4.1%), based on 2010 exports rates.
The Turkish economy grew in part thanks to privatization programs which reduced state involvement in
many sectors to minimal levels. It was not until the 1980s that privatization was initiated. Until then,
Turkey had strict government planning programs, and limitations on private sector and foreign
investment. However, Turkey`s economy changed in response to a sharp shift from a quasi-statist
approach to a much more market-based economy in the 1980s. However, the Turkish banking system
could not adjust quickly enough to this change and in 2001, an inevitable Turkish stock market crash
caused widespread damage to the Turkish economy. However, Turkey initiated several major bank
reforms and took some precautions to prevent similar incidents from occurring in the future. Thanks to
the 2001 crisis and the reforms that occurred at that time, Turkey found itself well-prepared for the 2008
global economic crisis Because of this, Turkey is being used as an example by many economists as a
country with a strong banking sector. As a result, Turkish and foreign entrepreneurs are increasingly
recognizing the strength of the Turkish economy, and even underscoring Turkey as Eurasia’s rising tiger
after an 11% growth rate in the first quarter of 2011, surpassing both Argentina 9.9% and China 9.7%.
Recent Economic Structure
It is a clear fact that the Turkish economy is climbing at a time when many of its neighbors are
struggling with turmoil and bail-outs. Greece, for example, has an unstable economic situation and now
Greek businessmen are looking to Turkey as a new trading base. According to the Izmir Chamber of
Commerce (IZTO), 93 new Greek firms have applied to do business with Turkish firms in the just first
five months of 2011. It would not be wrong to state that Turkey was successful at dealing with the 2008
global economic crisis as a result of precautions taken after its own 2001 crisis. According to World
Bank growth forecasts (June 2011), the real GDP growth average in the world is expected to be 3.2 in
2011, 3.6 in 2012 and 3.6 in 2013. Turkey’s growth rate expectations are 6.1, 5.1 and 5.3 respectively.
Turkey’s rates are higher than not only the average rates, but also some highly developed and still
developing countries such as the European Union with 1.7, 1.8, 1.9: Japan with 0.1,2.6,2.0: Russia with
4.4, 4.0, 4.1 and Argentina with 6.3, 4.2, 4.3. However, recent economic instability in Europe affected
the Turkish Economy. Turkish government growth forecasts were upgraded from 4.5% to 7.5% for
2011 but lowered from 5% to 4% for 2012. IMF also cut Turkey growth forecast from 2.5% to 2.2% for
The Organization for Economic Co-operation and Development (OECD) also updated its growth
forecasts for Turkey to 7.4 in 2011, 3.0 in 2012 and 4.5 in 2013; and for the World average 3.8 in 2011,
3.4 in 2012 and 4.3 in 2013.
Turkish Agricultural Sector
The Turkish economy has many strong sectors, one of which is the traditional agriculture sector due to
Turkey’s diverse geographical and climatic conditions. Turkey is geographically close to the European,
Middle Eastern and North African markets and is one of the leading producers in agriculture and related
industries. Proximity to these markets is one key reason for Turkey’s rising agricultural export rates.
Historically, Turkey has always been involved in agricultural production. Earlier, with traditional
agricultural methods, production was on the level of just self-sufficiency. However, with the
government initiatives starting from the 80s, the domestic agricultural economy was integrated into the
global economy and Turkey is now also an important exporter. Some of these initiatives include
privatization, reduction of trade barriers in the agricultural sector, irrigation, financial aid projects and
infrastructure improvements. With the help of these, Turkey’s agricultural exports increased from $2.0
billion in 2001 to $5.1 billion (excluding processed food) in 2011. Improvements in Turkish agriculture
also resulted from a sequence of changes aimed at adapting to European Union harmonization rules.
Turkey’s potential membership to the European Union brought modern agriculture and agricultural
technology. Turkey’s membership in the European Customs Union is one of the most important results
of its harmonization so far. Other than this, financial assistance, agricultural courses, modern irrigation
and farming techniques were introduced to the Turkish agriculture sector under these rules. Its
membership to EU would lead to even more new trade opportunities if Turkey does become a member.
Turkey is also a major importer of agricultural ingredients, which are often integrated into its exports.
As the service sector compromises a larger and larger percentage of GDP, the agricultural percentage
decreases every year. However, this does not necessarily mean the agricultural contribution decreases.
On the contrary, it nearly doubled in last 10 years. This basically shows that agricultural efficiency in
Turkey has been rising with the help of improvements in the sector. The agriculture sector also helps
decrease the unemployment rate by employing nearly 24% of the total workers in Turkey.
Forty percent of Turkey’s land is arable and this abundant amount of land offers various opportunities
for many agricultural products including field crops, vegetables, fruits, and livestock. Field crops rank
number one in terms of both volume and value of production with 80 million tons and $16 billion,
respectively. While fruit production reached $14.2 billion with 17.7 million tons, vegetable production
amounted to $12.2 billion with 26 million tons. Livestock production has jumped in recent years
reaching $31.2 billion in total production value in 2010.
Field Crop Production
The field crop production in Turkey compromises nearly 40% of the crop production values. The most
important products in this category are grains with 58% of the total field crop production and $17.7
billion value in 2010. Wheat, barley and corn are the to three with 62.3%, 17.7% and 12.2% of the total
grain production respectively in 2010. Although there was a drought in 2007 and it affected the grain
production, precautions and government supports accelerated the recovery in 2008. Financial support
and improved irrigation techniques helped the recovery, increasing wheat production from 17.2 million
tons in 2007 to 20.6 million tons in 2009. While wheat carries importance as an essential part of flour
and flour related products, another grain, barley, is generally used as feed. Estimated production rate has
been stable since 2007 and it is around 7.3 million tons per year. Corn production is developing, as
statics clearly shows that it nearly doubled in eight years from 2.1 million tons in 2002 to 4.3 million
tons in 2010. With other grain products, grain exports play an important role in the Turkish economy.
During the drought of 2007, grain exports amounted $66.6 million. However, this number increased
nearly five times in three years and reached $349 million in 2010.
Potato and pulses including broad beans, peas, chick peas, dried beans, and lentils also have economic
importance, reaching $2.4 billion in 2010. Other field crops such as oil seeds, especially sunflower,
tobacco, sugar beets and cotton, are also important to the food industry and textile sectors, contributing
to the Turkish economy nearly $4.5 billon as raw materials in 2010.
Turkey offers various fruit varieties throughout the year because of its different climatic zones and
conditions. Fruit, beverage and species crops help the Turkish economy roar with $14.2 billion
production value. With its different uses such as fresh for table consumption, dried for raisins and
processed into wine and other products, grape is the leading fruit in terms of value of production at $2.2
billion. Olives follows grapes with $2.01 billion, while apple comes third with a production value of
$1.8 billion in 2009. Citrus fruit (orange, mandarin, and lemon), nuts (walnut and hazelnut), stone fruits
(peach, apricot cherries), banana, kiwi and figs have also a major contribution, approximately $8.3
billion in 2009. Turkey is one of the most important fruit producers in the world. When Turkish
agricultural exports amounted to $4.5 billion in 2009, fruit contributed over $3billion of this total.
Vegetable production in Turkey is growing.. Because of increasing use of automation, vegetable
production started to be more efficient in Turkey. In 2009, total vegetable production amounted 26
million tons and $12.2 billion. In 2008, total vegetable production amounted to 27.2 million tons and
$11.3 billion. When these two-years are compared, it is a clear that while production is decreasing;
value is increasing as a natural result of rising efficiency. In vegetable production, tomato production
has the top position with $4.74 billion and 10.7 million tons. As Turkey is also able to cultivate
tomatoes in the winter thanks to its ecological conditions, this leads Turkey to be a major tomato
exporter in the region. Many nearby countries, especially Germany and Russia, are dependent on
Turkey for their tomato importation. After tomatoes, melons are the second most important vegetable
(classified as a vegetable in Turkey). Melon and watermelon production was 5.4 million tons in 2009,
worth $1.65 billion. Peppers, cucumbers and onions were worth $1.01 billion, $0.87 billion and $0.78
billion in 2009, respectively.
The number of cattle, sheep and goat and poultry in Turkey is increasing to meet increasing meat
demand. The number of cattle reached 11.4 million, increasing 6% , while the number of sheep and goat
reached 29.9 million, increasing 9% in 2010. The demand for cattle and sheep and goat increases at
certain times throughout the year, especially during the religious Sacrifice season. During this religious
event, nearly 0.5 million cattle and 2.5 million sheep and goat are sacrificed reaching a value of nearly
$1.5 billion. The government also tries to support livestock farmers by applying high taxes on imports
and giving support payments for improving farms. The number of poultry also increased 2.1% reaching
238.9 million in 2010 while the number of laying hens increased 6.7% reaching 70.9 million. Although
there are many countries importing poultry from Turkey, the most important ones are Middle Eastern
countries such as Iraq, Azerbaijan, Tajikistan and Iran. In 2010, poultry meat and offal exports
amounted to $229 million, increasing 49% from the previous year. Iraq still keeps it title as Turkey’s
largest market, worth $135 million in 2010.
Milk production also increased 8% reaching 13.5 million tons whereas fleece, animal hair and animal
hair production showed slight changes, reaching 42, 2.6 and 200 thousand tons respectively. Fishery
production reached 653 thousand tons which is a 4.8% increase. Although there were steady increases in
livestock, apiculture and sericulture production did not keep up with these increases.
Turkish Agricultural Economy
As a result of improved agricultural production, the Turkish economy benefits in terms of both domestic
production and exports. Turkey’s agricultural exports amounted to $5.1 billion, increasing 13% in 2010.
However, when processed products are included, this reaches $10.49 billion, a14% increase from the
Turkey is the largest producer of hazelnuts, apricots, cherries and poppy seeds in the world and the
second largest producer of quinces, leeks, figs, vetch, melons, cucumbers and strawberries. It is the third
largest producer of chickpeas, honey, apples, lentils and walnuts in the World In terms of quantity.
Turkey’s top agricultural exports consist of hazelnuts with $710 million, wheat flour with $596 million,
food preps with $535 million, unmanufactured tobacco with $490 million and prepared nuts with $413
million. Turkey’s top agricultural imports include cotton lint, wheat, sunflower oil, soy beans, and
While Turkey’s main agricultural exports to the U.S. are tobacco, processed fruits, olive oil, tree nuts,
spices and snack foods, the main U.S. agricultural exports to Turkey are cotton, soybeans, feed
ingredients, juices and tree nuts. In 2011, Turkey’s total export to the U.S. amounted $4.5 billion
whereas total imports from U.S. were $16 billion. Most of what Turkey imported was bulk ingredients
that were further processed in Turkey, and in many cases exported however most of what Turkey sent to
the United States was value-added consumer ready products.
Having some important port cities such as Istanbul, Izmir, and Mersin provides many trade
opportunities for Turkey. As a result, the location of Turkish ports has a great influence on the trade of
bulk commodities. Turkey’s top agricultural bulk commodity imports included wheat with 2.25 million
tons, soybeans with 1.75 million tons, cotton lint with 889 thousand tons, sunflower seed with 648
thousand tons and maize with 452 thousand tons; worth $650 million, $734 million, $1.7 billion, $346
million and $123 million, respectively. Turkey’s top agricultural bulk commodity exports were wheat
flour with 1.8 million tons, wheat with 1.7 million tons, tomatoes with 573 thousand tons, lemons with
407 thousand tons, and mandarins with 364 thousand tons: worth $604 million, $200 million, $475
million, $277 million, and $288 million, respectively.
Among Turkey’s top 20 agricultural imports soybeans, sunflower oil and seed, cocoa beans, and sesame
seeds show sharp increases in recent years. There is also a constant increase in the exportation of flour,
food prepared foods, pastry, raisins, chocolate, dry apricots, sugar confectionery, and vinegar. Although
the products above are in the thousands of tons at least, there are other imports which are lesser in
quantity, but which also are increasing sharply. For example, fine goat hair imports increased from 5
tons worth $37 thousand to 18 tons worth $1.05 million (2754% increase) in the last five years. Maple
sugar and syrup imports increased from 1 ton worth $5 thousand to $7 tons worth $76 thousand (985%
increase) in the last five years.
Turkish Consumption of Agriculture
The Turkish consumption patterns changed as a result of the socio-economic conditions. A growing
young population, increasing GDP and rising number of full time employed female population changed
Turkey’s overall consumption patterns. Turkey is one of the largest markets in baked goods, with a high
per capita consumption of bread and bread products. emerging rapidly increasing number of large
shopping malls now offer various kinds of products, leading Turkish consumers to become increasingly
demanding. Traditional consumption habits are being replaced with modern, international ones.
High value products such as coffee, chocolate, cookies, crackers, breakfast cereals, and alcohol are
consumed highly by the majority of the society, resulting in higher usage of packaged and processed
food. The young population, who is inclined to try new brands and products, prefers both international
and domestic brands rather than small scale locally produced products. High value products such as
fresh meat, roasted coffee, sugar, and dairy products are also preferred by the Turkish consumers.
A growing tourism sector is also leading to changing consumption patterns as hotels and restaurants in
tourist areas change in order to compete with neighboring tourism countries and to meet the demand of
guests. This includes importing various kinds of alcoholic beverages. The tourism sector attracts
millions of international visitors to the country. This went from 13 million tourists in 2002 to 31 million
tourists in 2011. Therefore, the Turkish domestic market served more than 100 million people in 2011.
Still, the market is not fully sufficient to meet the demands of all these consumers and there is still
plenty of opportunity for continued growth in the Turkish agricultural sector.