The Turkish Food Economy is Stalling

BY ELANUR URAL

Turkey’s economy is suffering. Consumer inflation is stuck above a 20% rate, and unemployment has increased by over 30% since 2012.[1][2] The Lira dipped down to one-seventh of the U.S. dollar in August of 2018; it is currently at almost one-sixth of the dollar value.[3][4]

Food and non-alcoholic beverages make up over 23% of Turkey’s consumer-price index, making it the component with the highest percentage.[5] As such, the country’s food economy is not immune to these troubles. Not long ago, Turkey was one of the only countries in the world whose agricultural supply met its demand, albeit some major supply-chain issues. Now, the country’s food inflation is at 25%, compared to the OECD average of 1.8%.[6] Even worse, the six food products with the highest price inflation are all staples to the Turkish diet: eggplants are in first place at almost 37%, onions at number five at 16%, and potatoes at number 6 at nearly 10%.[7] In March, a New York Times article mentioned a woman who recalled that “her hands were trembling as she handled peppers that have tripled in price”.[8]

Some grocers have cleared their shelves of eggplants and peppers completely, otherwise charging unhinged prices.[9] And while this is partially due to the recent flashfloods in Antalya, which took an especially bad toll on green peppers, weather-based conditions are only one factor. A majority of the administration’s economic policies in recent years have been aimed towards infrastructure and development in urban areas, rather than at agriculture. Many growers, especially small farmers, have been unable to afford to continue their trade, moving to already-packed cities to seek employment. In the past ten years, the number of registered farmers has dropped from 2.8 million to 2.1 million, and in the past seventeen years, over 7.4 million acres of farmland have been taken out of cultivation.[10]

Another issue for Turkish farmers is that the government has increased imports for foodstuffs, which are far cheaper than domestic options. Turkish Grain Board (TMO) manager Ahmet Güldal plans to import 200 thousand tons of onions, 700 thousand tons of barley, and 1 million tons of wheat by the end of May this year, amongst other goods. Partially as a result of the preference for foreign goods, domestic production of nearly every staple grain, vegetable, and pulse has decreased. This includes hay, which Turkey began to import in 2010. Currency depreciation is one factor in the slowing of growing, as the price of fuel, fertilizer, pesticides, and others continue to rise as the Lira falls. Since most of these inputs are imported, producers have little choice but to cut production.[11]

Turkey’s Republican People’s Party (CHP) has pointed blame at the ruling Justice and Development Party (AKP) for utilizing consistently failing economic policies.[12] President Recep Tayyip Erdoğan in return has accused middlemen to foreign markets of dirty handling, as well as accusing his political opposition of exaggerating the extent of financial concerns: “Tomatoes, potatoes, aubergine, green peppers, etc.; my siblings, all of this is just a gimmick.”[13]

Erdoğan has also accused grocers of stockpiling produce and distorting prices during the current economic downturn.[14] He sent police to raid the warehouses proclaiming them “food terrorists,” and has ordered regular inspections of prices on tomatoes, onions, and other produce. Erdoğan has vowed that his administration will “not allow those [price gougers] to launch this terror.”[15]

In early February, the AKP-run government began purchasing produce directly from growers, pitching mobile food stalls in several cities to sell artificially cheap vegetables. In the first week, over 3,200 tons of vegetables were sold in Istanbul and Ankara.[16] These stalls remained open until Turkey’s municipal elections on March 31st.[17] CHP proved victorious in both cities, foreshadowing a potential end to Erdogan’s administration via the next presidential elections in 2023.[18]

References

[1] Koç, Çağan. “Turkey’s Inflation Jolted by Food as Two-Month Slowdown Ends”. 3 February 2019. Bloomberg.com. Bloomberg L.P. https://www.bloomberg.com/news/articles/2019-02-03/turkish-food-price-spoiler-could-spell-end-of-inflation-slowdown.

[2] World Bank Indicators. “Unemployment, total (% of total labor force) (modeled ILO estimate)”.2018. WorldBank.org. International Labour Organization. https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS?locations=TR&view=chart.

[3] Ahval News. “Turkish inflation nudges higher as food prices surge”. 4 February 2019. AhvalNews.com. Ahval News. https://ahvalnews.com/turkey-inflation/turkish-inflation-nudges-higher-food-prices-surge.

[4] Bloomberg.com. Bloomberg L.P. https://www.bloomberg.com/quote/USDTRY:CUR

[5] Trading Economics. “Turkey Consumer Price Index (CPI)”. 2019. TradingEconomics.com. Trading Economics. https://tradingeconomics.com/turkey/consumer-price-index-cpi.

[6] Ahval News. “Turkey’s food prices catapult compared to OECD average in 2018”. 5 February 2019. AhvalNews.com. Ahval News. https://ahvalnews.com/turkish-inflation/turkeys-food-prices-catapult-compared-oecd-average-2018.

[7] Ahval News. “Could Turkey face food insecurity?” 23 January 2019. AhvalNews.com Ahval News. https://ahvalnews.com/turkey-food/could-turkey-face-food-insecurity.

[8] Gall, Carlotta. “Erdogan Tries to Ease the Pain of Turkey’s Bad Economy. It’s Still Hurting.” 4 March 2019. NYTimes.com. The New York Times Company. https://www.nytimes.com/2019/03/04/world/europe/turkey-economy-erdogan.html.

[9] Bilgic, Taylan and Ercan Ersoy. “Erdogan Hunt for Treason in Price Hikes Depletes Veggie Shelves”. 29 January 2019. Bloomberg.com. Bloomberg L.P. https://www.bloomberg.com/news/articles/2019-01-29/turkish-supermarkets-stop-selling-some-vegetables-hurriyet.

[10] Gall, Carlotta. “Erdogan Tries to Ease the Pain of Turkey’s Bad Economy. It’s Still Hurting.” 4 March 2019. NYTimes.com. The New York Times Company. https://www.nytimes.com/2019/03/04/world/europe/turkey-economy-erdogan.html.

[11] Ahval News. “Could Turkey face food insecurity?” 23 January 2019. AhvalNews.com Ahval News. https://ahvalnews.com/turkey-food/could-turkey-face-food-insecurity.

[12] Hurriyet Daily News. “Turkish government should be held ‘responsible for economic crisis,’ CHP leader says”. 25 February 2019. HurriyetDailyNews.com. The Hurriyet Daily News. http://www.hurriyetdailynews.com/turkish-government-should-be-held-responsible-for-economic-crisis-chp-leader-says-141477.

[13] Gall, Carlotta. “Erdogan Tries to Ease the Pain of Turkey’s Bad Economy. It’s Still Hurting.” 4 March 2019. NYTimes.com. The New York Times Company. https://www.nytimes.com/2019/03/04/world/europe/turkey-economy-erdogan.html.

[14] Ahval News. “Could Turkey face food insecurity?” 23 January 2019. AhvalNews.com Ahval News. https://ahvalnews.com/turkey-food/could-turkey-face-food-insecurity.

[15] Hurriyet Daily News. “Turkish President Erdoğan launches war on food price ‘terror’”. 11 February 2019. HurriyetDailyNews.com. The Hurriyet Daily News. http://www.hurriyetdailynews.com/turkish-president-erdogan-launches-war-on-food-price-terror-141168.

[16] Koç, Çağan. “Turkish Food Inflation Slows After Cut-Price Veggie Sales”. 20 February 2019. BloombergQuint.com. BloombergQuint. https://www.bloombergquint.com/global-economics/turkish-food-inflation-said-to-slow-after-cut-price-veggie-sales.

[17] Yackley, Ayla Jean. “Turkish grocers pull peppers, eggplants after Erdogan warns of price ‘treason’”. 31 January 2019. Al-Monitor.com. Al-Monitor. https://www.al-monitor.com/pulse/originals/2019/01/turkish-vegetables-vanish-inflation-efforts.html.

[18] Daily Sabah. “CHP’s Imamoğlu leads Istanbul, Yavaş leads Ankara in Turkey’s local elections”. 31 March 2019. DailySabah.com. Daily Sabah. https://www.dailysabah.com/elections/2019/03/31/peoples-alliance-leads-in-istanbul-tight-race-for-ankara-in-turkeys-local-elections.

Image source: xinhuanet.com

About the Author

Elanur Ural is a junior fellow at the ERA Institute. Her research interests include gender, resource politics, and Turkic Eurasia.


This article is produced by the Eurasian Research and Analysis Institute, Inc. a 501(c)(3) nonprofit, nonpartisan e-think tank. All views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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