TURKEY : ESTIMATES OF SUPPORT TO AGRICULTURE

 

Contact person: Luis Portugal

Email: mailto:morvarid.bagherzadeh@oecd.org

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DEFINITIONS AND SOURCES

 

Country Total Support Estimate (TSE) and derived indicators in Table 1 cover all agricultural production, i.e. all agricultural commodities produced in the country. Definitions of basic data sets refer to the specific name of the programmes with specific sources indicated in square brackets. For the Producer Support Estimates (PSE) and Consumer Support Estimates (CSE), the description of policy measures indicates the commodities covered by the measures, as well as the method of allocation of the corresponding transfers among commodities. "MPS commodities", which vary across countries, are those for which market price support is explicitly calculated in Table 2.

Market Price Support (MPS) and Consumer Support Estimates (CSE) by commodity in Table 2 are calculated for the following commodities: wheat, maize, barley, sunflower, sugar, potatoes, tomatoes, tobacco, grapes, apples, cotton, milk, beef and veal, poultry meat, sheep meat, and eggs. Definitions are provided only for basic data sets from which all the other data sets in this table are derived, following the formula indicated in each commodity table. Specific sources are indicated in square brackets.

Producer Support Estimates (PSE) by commodity in Table 3 are calculated only for commodities produced in the country within a common set of commodities (wheat, maize, barley, oats, rice, sorghum, soybeans, sunflower, rapeseed, sugar, milk, beef and veal, pigmeat, poultry meat, sheep meat, wool, and eggs), provided that the value of production of that commodity exceeds 1 per cent of the total value of production in the country concerned. All data sets in the calculation of PSE by commodity come from Tables 1 and 2 where definitions are included.

Definitions of the indicators, criteria of classification of programmes included, and methods of calculation can be seen in OECD, Methodology for the measurement of support and use in policy evaluation [http://www.oecd.org/agr/policy].

 

Abbreviations:

DPT: State Planning Organisation.

DSI: General Directorate of the State Hydraulic works

EBK: General Directorate for the Meat and Fish Organisation

GDRS: General Directorate for Rural Services

MARA: Ministry of Agriculture and Rural Affairs

RUSF: Resource Utilisation Support Fund

SPSF: Support and Price Stabilisation Fund

TCZB: Turkish Bank of Agriculture or the "Agricultural Bank"(ZA)

TEKEL: General Directorate for Tobacco and Tobacco products

TIGEM: General Directorate for Agriculture Enterprises

TKK: Agricultural Credit and Co-operatives

TMO: Turkish Grain Board

TRL: Turkish Lira

TSFAS: Turkish Sugar Factories

ZB: Agricultural Bank

Table 1. TURKEY: Total Support Estimate

Definitions:

I. Total value of production (at farm gate): Total agricultural production valued at farm gate prices, i.e. value (at farm gate) of all agricultural commodities produced in the country [1].

1. Of which share of MPS commodities (%): Share of commodities for which MPS is explicitly calculated (in Table 2) in the total value of agricultural production.

II. Total value of consumption (at farm gate): Consumption of all commodities domestically produced valued at farm gate prices, and estimated by increasing the value of consumption (at farm gate) of the MPS commodities according to their share in the total value of agricultural production [(II.1) / (I.1) x100].

1. Of which MPS commodities: Sum of the value of consumption (at farm gate prices) of the MPS commodities as indicated in Table 2.

III.1 Producer Support Estimate (PSE): Associated with total agricultural production, i.e. for all commodities domestically produced [Sum of A to H; when negative, the amounts represent an implicit or explicit tax on producers].

A. Market Price Support: On quantities domestically produced (excluding for on-farm feed use -- excess feed cost) of all agricultural commodities, estimated by increasing the MPS for the MPS commodities according to their share in the total value of agricultural production [(A.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the MPS (net of price levies and excess feed cost) for the MPS commodities as calculated in Table 2.

B. Payments based on output

1. Based on unlimited output

Cotton premium: Per tonne payments to cotton producers.

Milk incentive premium: Paid to farmers per litre of milk delivered to dairies to encourage the delivery of milk to certified dairies [RUSF].

Meat incentive premium: Paid to farmers per tonne of meat to encourage the delivery of meat to certified abattoirs. Abolished in 1995. The share of each livestock category was allocated on the basis of the slaughtered quantities in abattoirs for each respective year. (EBK then RUSF).

Tea pruning premium: Per tonne payment to tea producers, to prune tea bushes by one fifth of licensed tea plantations, each year over five years, from 1994. This programme was extended for another 5 years till 2004. Compensatory payment, for lost revenues associated with this programme, granted at the prevailing leaf price on 70 per cent of each grower’s average harvest over the previous two years.

Other prices premium: Per tonne payment to producers of olive oil, oilseeds, mohair and silkworm.

2. Based on limited output

Tobacco premium: Per tonne payment to tobacco producers introduced in 1994 with the implementation of a production quota. The payment applies to the difference between the last three years average quantity of tobacco sold (to TEKEL and tobacco traders) and the production quota.

C. Payments based on area planted/animal numbers

1. Based on unlimited area or animal numbers

2. Based on limited area or animal numbers

D Payments based on historical entitlements

Direct Income Support (DIS) payment: A unified national annual payment granted under the Agricultural Reform Implementation Project (ARIP, 2001-2004) to all farmers to cover the short-term losses associated with the removal of administrative prices and input based payments. DIS payment is granted at the same rate per hectare to all farmers, but limited to a maximum of 50 hectares per farmer.

1. Based on historical plantings/animal numbers or production

2 Based on historical support programmes

E. Payments based on input use

1. Based on use of variable inputs

Interest concessions

Difference between commercial rates and rates applied to farmers multiplied by outstanding loans for the purchase of variable inputs, and including interest rates rebates, interest free debt deferral, and debt write-offs.

Value of interest rebates on loans to sugar beet growers [Sekerbank).

Value of interest rebates on loans to viniculture and viticulture: 9 years maturity with 34 per cent interest rates, no reimbursements take place the first 3 years [no data available].

Value of interest rebates on loans for the purchase of inputs; allocated to all commodities, except sugar for which identified data are available, using the share of each commodity in the total value of production.

Value of interest rebates on interest free loans to buy seeds from TIGEM in regions damaged by disaster calculated on the basis of the purchase of specific seeds.

Value of interest rebates on loans for the purchase of inputs deferred for 3 years: 1 year without any interest and 2 years with 4 installments as a result of natural disaster. These are allocated according to each commodity share in the value of production.

Value of interest rebates on loans of which recovery was deferred for 1 year: debts of livestock breeders to TCZB and TKK with maturity in 1997 and 1998 were deferred for one year without any interest, when pasture and meadows owned by the village’s legal entities and individuals were damaged due to natural disaster and other reasons in 1997. Allocated to livestock commodities share according to their share in the total value of production

Value of outstanding debt write-off: in 1992, TRL 1.24 trillion debt owed by some crop farmers was written-off; allocated to all commodities according to their share in the total value of production.

Feed payments

Compound feed subsidy: Payment to livestock producers per kilo of industrial feed purchased, paid by TCZB from 1985 to 1988. Since 1989, payments are made to industrial feed producers to compensate for a rebate of 20 per cent on prices paid by farmers. Individual figures by livestock commodity are provided. [Incomplete time series]

Pasture improvement: Public expenditure on sowing and fertilisation work of meadows and pastureland in 1991 and 1992 in the framework of pastureland reclamation project; allocated equally between the sheep/goat and cattle and dairy sectors (1/3 each).

Sugar pulp for feed: Total value of sugar beet pulp returned by TSFAS free of charge to beet producers and used as feed.

Fertiliser payments: Value of fertilisers provided free-of-charge and in kind to sugar beet growers.

Payment to farmers per kilo of fertiliser purchased for crops other than sugar beet: corresponding to a 50% rebate on the purchase value of fertilisers paid by TCZB, funded by SPSF. Since 1998, payments are made to fertiliser producers, importers and distributors, compensating for a 20% rebate on the purchase price to farmers. Payments are determined according to fertiliser type (up to 40% of the fertiliser expenditure). The payments are allocated to individual crops taking into account its share in total fertiliser consumption.

Seed payments

Hybrid seed subsidy: Payment to seed producing enterprises per kilo of hybrid seed purchased at rebate prices by farmers (paid by TCZB which is funded by SPSF).

Seed loans: Value of interest rebate on interest free loans to farmers for seed purchases.

Pesticides payments: Payment to pesticide producers per kilo of pesticides purchased by farmers to compensate for a rebate on the value of pesticides purchased (paid by TCZB funded by SPSF) plus direct government expenditures on crop protection.

Water payments (irrigation): Budgetary expenditure by DSI on operation and maintenance costs of irrigation structures net of farmers'fees, allocated to irrigated crops according to their value of production. [Expenditure on investment amortisation and on support to irrigation associations is not available].

Electricity payments (irrigation): Price rebate on electricity used for irrigation allocated to irrigated crops according to their value of production.

2. Based on use of on-farm services

Artificial insemination: Budgetary expenditure for public and private laboratories for insemination of cows and ewes. Allocated to livestock commodities according to their relative value of production.

Machinery services: Budgetary expenditure covering cost to TSFAS of machinery used for sugar beet cultivation.

Pest and disease control: Budgetary expenditure on measures to control cattle diseases (allocated to beef and milk), plus rebates to farmers for the purchase of drugs and chemicals used in animal husbandry of which 25 per cent is allocated to beef cattle, 25 per cent to dairy cattle, 15 per cent to sheep, 15 per cent to goats, 15 per cent to poultry, and 5 per cent to other animals. (TCZB funded by SPSF).

Agricultural extension and applied research project (financed by foreign loans and reimbursed by Treasury) [no data available]

3. Based on on-farm investment

Capital grants: Budgetary expenditures on grants paid through the RUSF for livestock housing. Data are provided by livestock commodity. No grants were given from 1996 onwards.

Interest concessions: Interest concessional loans to farmers for investment [no data available].

Livestock improvement: Budgetary expenditure to support the purchase by farmers of imported breeding stock to improve livestock.

Livestock replacement: Budgetary expenditure to support the purchase by farmers of imported breeding stock to replace animals injured following natural disasters [data needs to be improved].

On farm development work: Budgetary expenditure on development work such as field levelling, drainage, soil improvement, soil protection and land consolidation, allocated to wheat, cotton, sugarbeet and sunflower [GDRS].

Farmer transition payments: A one-off payment to farmers granted under the Agricultural Reform Implementation Project (ARIP, 2001-2004) to cover the costs to divert production from crops currently over-produced (namely hazelnuts and tobacco) to other commodities.

F. Payments based on input constraints

1. Based on constraints on variable inputs

2. Based on constraints on fixed inputs

3. Based on constraints on a set of inputs

G. Payments based on overall farming income

Tax concessions: income tax concessions (no data available).

1. Based on farm income level

2. Based on established minimum income

H. Miscellaneous payments

1. National payments

2. Sub-national payments

III.2 Percentage PSE [(III.1) / ((I) + (Sum of B to H)) x 100]

III.3 Producer NPC: For all agricultural commodities the Producer NPC is estimated as a weighted average of the producer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Producer NPC = [domestic price received by producers (at the farm gate) + unit payments based on output] / border price (also at the farm gate).

III.4 Producer NAC [1 / (100 - (III.2)) x 100]

IV. General Services Support Estimate (GSSE): total budgetary expenditure to support general services provided to agriculture [ Sum of I to O] .

I. Research and development: Budgetary expenditure for the Crop Production Development Project, the first and second TYUA Projects and the Bingol and Mus Rural Development Projects (TUGEM figures), plus research projects financed by the World Bank and IFAD and reimbursed by treasury, plus expenditure under the Agricultural Reform Implementation Project (ARIP, 2001-2004) to establish the Farmer Registration System on the basis of which DIS payments are granted.

J. Agricultural schools: Budgetary expenditure on professional schools.

K. Inspection services: Budgetary expenditures by MARA, GDRS, and TSFAS.

[No data available on other government and foreign expenditure, such as expenditure on imports inspection by the General Directorate for Protection and Control, and food inspection services: benefiting from an EC grant starting 1998 for improving existing laboratories, increasing the capacity of existing staff and establishing a computer network or the inspection of agricultural products for exports paid by the Under secretariat for Foreign trade.]

L. Infrastructure: Budgetary expenditure on interest rate concessions on loans for agricultural villages development co-operatives provided by TCZB; for the improvement of infrastructures provided by TSFAS, TEKEL and ÇAYKUR; and for the construction, maintenance and repair of road, water and electricity mains and sewage facilities.

M. Marketing and promotion: Budgetary expenditure for covering losses of government agencies (TMO, TSFAS, TEKEL) associated with market intervention procedures plus debt write-off of loans of those agencies.

Duty loss (TMO, TSFAS, TEKEL, ASCUs, EBK)

Debt write-off (TMO, TSFAS, TEKEL, ÇAYKUR)

Equity injections from Treasury to TMO, TSFAS, TEKEL, ÇAYKUR

Transfer to ASCUs from support and price stabilisation fund

ASC/ASCU restructuring under the Agricultural Reform Implementation Project (ARIP, 2001-2004).

N. Public stockholding: Operation and maintenance cost of public stockholding, including TMO, EBK, TEKEL, ÇAYKUR. [no data available].

O. Miscellaneous

V.1 Consumer Support Estimate (CSE): Associated with agricultural production, i.e. for the quantities of commodities domestically produced, excluding the quantities used on-farm as feed -- excess feed cost. [Sum of P to S; when negative, the amounts represent an implicit tax on consumers].

P. Transfers to producers from consumers: Associated with market price support on all domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(P.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the values of transfers from consumers to producers associated with market price support for the MPS commodities as calculated in Table 2.

Q. Other transfers from consumers: Transfers to the budget associated with market price support on the quantities imported of domestically produced commodities, estimated by increasing the transfers calculated for the MPS commodities according to their share in the total value of production [(Q.1) / (I.1) x 100].

1. Of which MPS commodities: Sum of the transfers to the budget associated with market price support on the quantities imported of the MPS commodities as calculated in Table 2.

R. Transfers to consumers from taxpayers

S. Excess Feed Cost: Associated with market price support on quantities domestically produced and used on-farm as feed as calculated in Table 2.

V.2 Percentage CSE [(V.1) / ((II) - (R)) x 100]

V.3 Consumer NPC: For all agricultural commodities the Consumer NPC is estimated as a weighted average of the consumer NPC calculated for the individual MPS commodities and shown in Table 2. For each commodity Consumer NPC = domestic price paid by consumers (at the farm gate)/ border price (also at the farm gate).

V.4 Consumer NAC [(1 / (100 -(V.2)) x 100]

VI. Total Support Estimate [(III.1) + (IV) + (R)] and [(T) + (U) - (V)]

T. Transfers from consumers [(P)+(Q)]

U. Transfers from taxpayers [(III.1)-(P)+(IV)+(R)]

V. Budget revenues [(Q)]

Sources:

Data collected by MARA from different source, including DPT, GDRS, HDTM, SIS, TCZB.

 

Table 3. Producer Support Estimate by commodity

 

Definitions and Sources: see Definitions and Sources for Tables 1 and 2 above.