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Turkey Agribusiness Report Q3 2009Published by: Business Monitor International Published: Jun. 19, 2009 - 48 Pages Table of Contents
AbstractAs 2009 progresses, there is little to suggest an uptick in global economic health. Turkey is expected toexperience a full and deep recession, weighed down by a sizeable current account deficit, while its highlyproductive agricultural sector is foreseen to stumble through the year, to the detriment of the one-third ofthe population employed in rural husbandry. BMI 's latest Turkey Agribusiness Report looks at how, withEU accession looming, the Turkish government seeks to incorporate higher levels of productiveefficiency, through private investment and bilateral development partnerships.The prospect of joining the EU has forced the state to look at ways in which it can increase productivityin domestic farming without aggravating a precarious macroeconomic position. Subsequently, foreigndirect investment (FDI) has been targeted as being able to help consolidate the productive capacity ofTurkish agriculture, which at present is largely fragmented and family-run. In addition to improving thelocal supply outlook, stimulating household demand is a pertinent aim to helping the economy restrengthen. Since late 2008, some success has been achieved on the FDI front. The European Bank forReconstruction and Development (EBRD) has agreed to provide finance to the tune of US$193mn foragribusiness and small business development. The figure is reported to rise to US$300mn in 2010 andcould be used to marked effect in developing infrastructure. More recently, a group consisting of variousArab investment houses signalled its intention to facilitate substantial capital flows into Turkey; adevelopment which the government has used as a PR tool to highlight investor optimism in local farming. A range of agricultural sub-sectors are still supported through government subsidies, which must surelyweigh heavily on an already tight fiscal burden; this dynamic must surely be eradicated if real efficiencygains are ever to be realised. This will most likely mean that a number of small-scale producers maystruggle to stay afloat, thus the face of Turkish farming is set to change irrevocably, with a smallernumber of producers becoming increasingly influential. The potential for social unrest and economic instability associated with the disappearance of small ownedfamily enterprises, is notable. While productivity may improve, unemployment and unrest could providea more pertinent threat in future. However, with supply and demand fundamentals expected to performwell through to 2013, despite a rocky 2009, BMI believes that a more economically-minded approachwill translate into a brighter outlook for both aggregate production and consumption, boosting the entiredomestic outlook, while the value added sub-sectors stand to gain considerably. Get Full Details About This Report >> |
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