Change necessary for Turkey’s agriculture sector

The Turkish Statistical Institute announced data for the first six month period of 2015; in the first quarter of the year Turkey’s economy grew 2.3%. The agricultural sector contributed 2.7% to this economic growth. According to this data, investments and efforts in agricultural production are evaluated as a concrete success. However, the Istanbul Commodity Exchange director Ali Kopuz also pointed out that there is a questionable situation; food prices have increased too.

As mentioned by Kopuz, observing an increase in agricultural growth, an increase in food inflation, especially in relation to the supply of agricultural commodities in Turkey, is leading a demand and price relationship. Day by day, commodity investments start to become more popular, especially in physical trading without involvement in the financial markets. Wheat, corn, cocoa, sugar, and agricultural commodities, such as cotton, all have a high volume of transactions.

“Cooperative wholesalers must make direct sales.”
Furthermore, according to Kopuz, with current State Law, which allows the major markets to buy agricultural products from the producers and sell them to consumers at lower prices, Turkey has not reached the expected decreased level of prices, he suggests that instead of the agents who are harming both the producer and consumer, wholesalers can make direct sales as cooperatives. Thus, he states that in this case we can prevent speculative price increases which are not related to the real market, so the consumers can make purchases at the most affordable prices.

"Licensed warehouse systems must be established"
Kopuz concludes by pointing out another critical point ; “With licensed warehousing, supply control will be ensured and speculative price increases will be prevented. As long as licensed warehouses are not established, it will be difficult to avoid speculative gains. The establishment of this system will ensure specialized stock exchanges through the formation of a free market. The logistics infrastructure also needs to be strengthened to eliminate the regional cost differences. The difference in cost of items among food traders and merchants in the Anatolia region and in Istanbul is too much. Naturally traders reflect the price difference in the products they sell. If the Food, Agriculture and Livestock Ministry and the government focus on efforts to improve the logistics infrastructure throughout Turkey, this will be visibly reflected in the prices. Therefore, many can say that investing in logistics, would mean a reduction in the inflation of food prices.”

Source: gidatarim.com