Speaking about the increasing potato and onion prices, Turkish Minister of Finance Nihat Zeybekci said: “We've experienced a lot price fluctuation in these two products lately and so we've actively started to intervene to stop this. The Ministry of Agriculture is also monitoring the market very closely. We will allow onion and potato exports in certain amounts to drive down the prices. We want to stop onion and potato prices being driven higher by speculative brokers.”
However growers associations are extremely disappointed with the import measures the government is planning to take. Associations argued that imported products will not solve the problem and on the contrary it will lower the production in the country.
High onion and potato prices were welcome news for wholesalers and retailers who are enjoying record level margins on these products, however growers and consumers are the one’s who are suffering from the current situation. Growers are selling their products at a very low price where they barely break even, whereas consumers have to pay very high prices for these staple products.
Associations close to the government are putting the blame on wholesalers who, they claim, are keeping products in their facilities and only offering limited amounts to the market to drive the prices up. On the other hand, there are some disagreements with this analysis. Odemis Chamber of Agriculture Vice President Mehmet Dinlemez: “The problem does not stem from the wholesalers keeping stock. Summer potatoes cannot be held in storage facilities, there is simply a very limited amount of potatoes and onions coming from the growers. In previous years, the buyers were very picky in purchasing products from the buyers. Most of the growers are left with tons of products in their hands as a result of this. Consequently they have started to reduce their potato and onion production areas, which obviously led to a decline in production numbers. Just in our region, we have 60 % less production in potatoes. Additionally bad weather conditions and some diseases in potatoes reduced the production numbers even more. There is also a significant difference between grower and retail prices, sometimes as much as 3 or 4 times and there are no regulations to stop this.
The potato harvest will start in a week, first in Manisa, then in Bursa, Nigde and Nevsehir, which will solve the shortage of supply problem and drive down the prices a bit. The import solution proposed by the government will not solve anything. The wholesalers will use the threat of imports to drive down the prices at the grower even more which will lead to growers losing even more money and stopping with potato production. The government should take measures to protect the growers. We well potato between 0.25 USD per kg and 0.4 USD per kg. It is sold for 1 – 1.5 USD per kg at retail so the wholesalers are earning all the money in this trade. The costs of the growers are also increasing continuously as the fertilizer, seed and petroleum prices are all going up. “
Turkish Growers Union General Secretary Lokman İsik: “The government always regard agriculture as a strategic sector but it is difficult to see this focus in their actions. They are proposing import products during harvest time of local products. Imports are not a solution, it will hurt the production even more. The number of growers are constantly declining because they keep losing money and get out of production business. Instead of allowing imports, government should provide some incentive and breaks for growers such as electricity and water at a lower cost. They should also regulate the wholesalers and all the middlemen who are driving up the prices with their high margins. However apparently government has already decided on imported potatoes and onions so some people close to the government will make some money out of it. These products will probably come into the Turkish market at the same time when the harvest start in 3 different production areas. So these imported prices will force down the prices of these new harvested products which will be sold at a loss. The importers and wholesalers will continue to win whereas the growers will keep losing if the government insists with this policy.”
The rise in prices are not only limited to potatoes and onions but also other agricultural products as well. Potatoes and onions almost doubled in price from May to June. There is a similar sharp increase in green pepper, apricot and peach as well. Also for every product, the price difference between the grower and retailer is huge, almost 3 or 4 times more. This shows that the problem is more with the middlemen who are increasing prices with high margins and playing with the market conditions by stocking products and creating artificial shortage of supply in the market.
One positive news regarding the potato and onion crisis in the market came from Amasya, one of the main production areas for onions in Turkey. The hope is that onions from Amasya will balance the supply and demand balance in the market and reduce the prices as a result.
Grower Celalettin Celik from Amasya: “The government has no fault in this crisis. The reason behind the crisis is the late arrival of the harvest season due to heavy rains and some sly middlemen in the market who wanted to profit from this issue. The weather was both too hot and too rainy at the same time. This caused a lot of problems in the production, not only in terms pushing harvests to a later date but also causing various diseases in the products, especially in the Hatay and Adana production fields. The number of the production fields is still the same. Some middlemen are using this as an opportunity to increase their profit margins but it will come to an end very soon.
Starting from the last week of June, we will begin harvesting 3,000 tons of onions on a daily basis which will balance the market. We will even have enough onions to export. Last year Iran had a similar crisis with onions but they have not imported any onions. We should be calm and weather the storm and not import any potatoes and onions. We are almost at the end of supply shortage and we must avoid doing anything which might hurt domestic growers.“
Source: NTV