Turkish farmers worse off than EU counterparts

DW carries an article about Turkish farmers who are sinking into debt to stay afloat, Caliber.Az reprints the article.

Faced with years of chronic price inflation and what agriculture industry representatives say is insufficient state aid, Turkish farmers are sinking into debt to stay afloat.

All over Europe, farmers have been taking to the streets to protest in recent months, snarling traffic with their tractors. Farmers in Türkiye haven't yet taken to the streets, but the agricultural sector there is just as incensed by an adverse economic situation and dissatisfied with state subsidies. Turkish farmers face worse conditions than their counterparts in Poland, Germany and elsewhere, representatives for the sector say.

"One of the driving forces behind agricultural protests in Europe was that aid for agricultural diesel was being cut," said Baki Remzi Suicmez, president of the Chamber of Agricultural Engineers of Türkiye. "In Türkiye, there are no tax benefits for agricultural diesel anyway."

"While inflation is constantly going up and is almost at the 70 per cent mark, the financial support isn't enough," Suicmez says.

Annual inflation stood at 64 per cent last year in Türkiye, according to official figures. Analysis by the Inflation Research Group (ENAG) calculated it at 127 per cent. Germany, by contrast, saw annual inflation around 5.9 per cent in 2023.

Insufficient budget boost

In response, the Turkish Ministry of Agriculture's budget for support for farmers was increased by 44.5 per cent for 2024, totaling around 2.7 billion euros ($2.9 billion).

For comparison, German farmers received around 6.9 billion euros in EU agricultural subsidies, plus a further 2.3 billion euros from the national budget in 2022, analysis by the Cologne Institute for Economic Research shows.

In Türkiye, the cost of key farming supplies is also steadily rising, data from the Union of Chambers of Agriculture of Türkiye (TZOB) shows. Agricultural diesel prices rose 76 per cent last year, for example, while fertilizer costs surged up to 25 per cent.

With state aid insufficient to cover rising costs, Turkish farmers have to take out loans, which means they are getting deeper into debt, Suicmez said.

Türkiye's currency crisis 

The head of TZOB, Semsi Bayraktar, paints a dark picture. "Our farmers already have to start thinking in winter about how they will pay for agricultural diesel in spring. Agricultural diesel is absolutely essential for production," Bayraktar said.

Türkiye's monetary crisis has been going on much longer than Europe's current inflation issue. The Turkish lira has lost value dramatically. In 2014, you had to pay around 2.90 Turkish lira for 1 euro. Today, 1 euro is worth 34 lira.

Dramatic debt surge for farmers

The amount that farmers owe the banks rose by 80 per cent last year. According to official statistics, they now owe the banks 118 times more than they did 19 years ago.

In contrast, financial aid has not kept pace over the same period, explains Orhan Saribal, a member of parliament from the largest opposition party, the Republican People's Party (CHP).

Saribal is himself an agricultural engineer and farmer. "In 2004, the loans used for production in agriculture, forestry and animal husbandry amounted to 1.7 times as much as state aid. In 2023, the loans amounted to 9.6 times as much," he stressed.

According to industry representative Suicmez, farmers owe some $22 billion (20 billion euros), mostly to banks but also to the Ministry of Agriculture and to private companies.

Saribal is calling for more state support. "Farmers are not receiving enough support from the state. That's why, out of desperation, they are turning to private banks," he added.

Agriculture: A significant sector

According to official figures, agriculture accounts for 5.8 per cent of Türkiye’s economic output, compared to just 0.8 per cent of Germany's or 1.4 per cent across the European Union. Some 4.6 million people work in agriculture in Türkiye, which is 16 per cent of all workers.

Turkish farmers are also rallying the state to do more, arguing that it will ultimately benefit all workers. "If a farmer cannot repay his debts, he loses his land, his tractor, or his animals," Suicmez warns. To solve the problem, production costs must be reduced and farmers' incomes increased. It all goes together."

"If that doesn't happen, production costs will spiral out of control," he said. "Then maybe consumers will start to see certain products on supermarket shelves they can't even afford."