Rethinking structural reform in Turkish agriculture : beyond the World Bank’s strategy 9781608767182, 1608767183

Table of contents :
Rethinking structural reform in Turkish agriculture / Baris Karapinar, Fikret Adaman and Gokhan Ozertan --
Rural transformation trends and social policies in Turkey in the post-developmentalist era / Caglar Keyder and Zafer Yenal --
Modernization, globalization and development: the state problem in Turkey / E. Fuat Keyman --
How to dilute an agricultural reform: direct income subsidy experience in Turkey (2001-2008) / A. Halis Akder --
Agricultural policy reform in Turkey: sectoral and micro implications / Erol H. Cakmak and Hasan Dudu --
The logic of neoliberal agricultural reform initiatives: perspectives and consequences / Koray Caliskan and Fikret Adaman --
Agricultural transformation and the rural labor market in Turkey / Ipek Ilkkaracan and Insan Tunali --
Agriculture in Turkey towards a new climatic era: prospects and challenges / Ali Kerem Saysel --
Water in Turkey: neoliberal policies, challenges and the road ahead / Zeynep Kadirbeyoglu and Gokhan Ozertan --
Sustainability in agriculture: stakeholders' perceptions in Turkey / Baris Karapinar --
Legal-institutional framework and agrobiodiversity conservation in Turkey / Zuhre Aksoy --
Rethinking agricultural policy in Turkey in the context of new growth theory / Philipp Aerni --
Intellectual property rights and innovation: promoting new technologies in Turkish agriculture / Baris Karapinar and Michelangelo Temmerman --
The legal framework for agrobiotechnology in Turkey: the challenges to the implementation of the precautionary principle / Zeynep Kivilcim --
Risk assessment problems with biotech products / Michael Burkard --
Application of knowledge to rural development via new ICT-tools / Miriam Sahlfeld --
Biofuels in Turkey / Asli Isler and Filiz Karaosmanoglu --
A preliminary impact assessment of Doha round results on agricultural policies in Turkey / Christian Haeberli --
Standards and their impacts on the horticulture trade / Sufian Jusoh --
Beyond the World Bank's strategy / Baris Karapinar, Fikret Adaman and Gokhan Ozertan.

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AGRICULTURE ISSUES AND POLICIES

RETHINKING STRUCTURAL REFORM IN TURKISH AGRICULTURE: BEYOND THE WORLD BANK'S STRATEGY

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AGRICULTURE ISSUES AND POLICIES

RETHINKING STRUCTURAL REFORM IN TURKISH AGRICULTURE: BEYOND THE WORLD BANK'S STRATEGY

BARIS KARAPINAR FIKRET ADAMAN AND

GOKHAN OZERTAN EDITORS

Nova Science Publishers, Inc. New York

Copyright © 2010 by Nova Science Publishers, Inc. All rights reserved. No part of this book may be reproduced, stored in a retrieval system or transmitted in any form or by any means: electronic, electrostatic, magnetic, tape, mechanical photocopying, recording or otherwise without the written permission of the Publisher. For permission to use material from this book please contact us: Telephone 631-231-7269; Fax 631-231-8175 Web Site: http://www.novapublishers.com NOTICE TO THE READER The Publisher has taken reasonable care in the preparation of this book, but makes no expressed or implied warranty of any kind and assumes no responsibility for any errors or omissions. No liability is assumed for incidental or consequential damages in connection with or arising out of information contained in this book. The Publisher shall not be liable for any special, consequential, or exemplary damages resulting, in whole or in part, from the readers‘ use of, or reliance upon, this material. Any parts of this book based on government reports are so indicated and copyright is claimed for those parts to the extent applicable to compilations of such works. Independent verification should be sought for any data, advice or recommendations contained in this book. In addition, no responsibility is assumed by the publisher for any injury and/or damage to persons or property arising from any methods, products, instructions, ideas or otherwise contained in this publication. This publication is designed to provide accurate and authoritative information with regard to the subject matter covered herein. It is sold with the clear understanding that the Publisher is not engaged in rendering legal or any other professional services. If legal or any other expert assistance is required, the services of a competent person should be sought. FROM A DECLARATION OF PARTICIPANTS JOINTLY ADOPTED BY A COMMITTEE OF THE AMERICAN BAR ASSOCIATION AND A COMMITTEE OF PUBLISHERS. LIBRARY OF CONGRESS CATALOGING-IN-PUBLICATION DATA Rethinking structural reform in Turkish agriculture : beyond the World Bank's strategy / editors: Baris Karapinar, Fikret Adaman and Gokhan Ozetan. p. cm. Includes bibliographical references and index. ISBN 978-1-61209-214-0 (eBook)

Published by Nova Science Publishers, Inc.  New York

CONTENTS Preface

vii

Chapter 1

Introduction: Rethinking Structural Reform in Turkish Agriculture Baris Karapinar, Fikret Adaman and Gokhan Ozertan

1

Chapter 2

Rural Transformation Trends and Social Policies in Turkey in the Post-Developmentalist Era Caglar Keyder and Zafer Yenal

11

Modernization, Globalization and Development: The State Problem in Turkey E. Fuat Keyman

29

How to Dilute an Agricultural Reform: Direct Income Subsidy Experience in Turkey (2001–2008) A. Halis Akder

47

Agricultural Policy Reform in Turkey: Sectoral and Micro Implications Erol H. Cakmak and Hasan Dudu

63

The Logic of Neoliberal Agricultural Reform Initiatives: Perspectives and Consequences Koray Caliskan and Fikret Adaman

87

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Agricultural Transformation and the Rural Labor Market in Turkey Ipek Ilkkaracan and Insan Tunali

105

Chapter 8

Agriculture in Turkey Towards a New Climatic Era: Prospects and Challenges Ali Kerem Saysel

149

Water in Turkey: Neoliberal Policies, Challenges and the Road Ahead Zeynep Kadirbeyoglu and Gokhan Ozertan

169

Chapter 9

Chapter 10

―Sustainability‖ in Agriculture: Stakeholders‘ Perceptions in Turkey Baris Karapinar

Chapter 11

Legal–Institutional Framework and Agrobiodiversity Conservation in Turkey Zuhre Aksoy

189

211

vi

Contents Rethinking Agricultural Policy in Turkey in the Context of New Growth Theory Philipp Aerni

229

Intellectual Property Rights and Innovation: Promoting New Technologies in Turkish Agriculture Baris Karapinar and Michelangelo Temmerman

243

The Legal Framework for Agrobiotechnology in Turkey: The Challenges to the Implementation of the Precautionary Principle Zeynep Kivilcim

265

Chapter 15

Risk Assessment Problems with Biotech Products Michael Burkard

281

Chapter 16

Application of Knowledge to Rural Development via New ICTTools Miriam Sahlfeld

299

Chapter 17

Biofuels in Turkey Asli Isler and Filiz Karaosmanoglu

319

Chapter 18

A Preliminary Impact Assessment of Doha Round Results on Agricultural Policies in Turkey Christian Haeberli

341

Chapter 19

Standards and their Impacts on the Horticulture Trade Sufian Jusoh

355

Chapter 20

Conclusions: Beyond the World Bank‘s Strategy Baris Karapinar, Fikret Adaman and Gokhan Ozertan

371

Chapter 12

Chapter 13

Chapter 14

Index

379

PREFACE Turkish agriculture has been experiencing a period of unique policy experiment over the last couple years. A World Bank-initiated project, called the Agricultural Reform Implementation Project (ARIP), has been at the forefront of policy change. It was initially promoted by the Bank as an exemplary reform package which could also be adopted by other developing countries. It was introduced in 2001 as part of a major International Monetary Fund (IMF)/World Bank-imposed program of ―structural adjustment‖ after the country had been hit by a major financial crisis. The project has finally come to an end in 2009, and there is now an urgent need for a retrospective assessment of its overall impact on the agricultural sector. Has it fulfilled its ambitious objective of reforming and restructuring Turkish agriculture? Or should it be recorded as a failure of the neo-liberal doctrine? This book aims at finding answers to these questions by investigating the legacy of ARIP from a multidisciplinary perspective. Chapter 1 - The book contains six parts. The chapters in the first part sketch the historical background of ARIP, offering a fresh analysis of rural transformation and the role of the state in the agricultural economy. The second part focuses on the assessment of the political and economic impacts of ARIP on Turkish agriculture. The third part looks at various demographic trends and analyzes the process of labor transition, also focusing on the impact of ARIP on the rural labor force. The fourth part of the book extends beyond the analysis of ARIP and looks at the environmental dimension of rural development. Contributions cover major issues such as climate change, allocation of water resources, policy discourse on sustainability, and environmental regulation. The fifth part examines technology and innovation, bringing in theoretical and institutional factors affecting innovation in rural economies, and discussing best practices around the world. The sixth part looks at international trade, in the context of the potential obligations and opportunities Turkey faces with respect to its WTO membership. Chapter 2 - With the ending of the national developmentalist era in the early 1980s and the opening of agriculture and the food industry to global currents, significant trends pointing to a social and economic transformation of the rural sector become apparent. The most vital of these trends is that agriculture is no longer the only or primary source of income for the rural population, and non-agricultural incomes are increasingly important for rural households. In addition, in the new era, new production patterns such as labor-intensive and diversified agriculture, as evidenced especially by contract-farming practices, become more pervasive in rural areas. As a result of the internationalization and deregulation trends in Turkish agriculture, the price, product, and production structure in rural areas has become

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much more complex and inclusive of multiple components. Although these trends may differ from region to region, for a large proportion of rural households, agricultural support policies and state institutions have already lost their previous substance and were significantly less effective in organizing the agricultural sector. This paper argues that these developments have important implications for population dynamics as well. Chapter 3 - Relying on the analytical distinction drawn by both Joel Migdal and Nicos Poulantzas in their own groundbreaking works on the state, between the idea/type and the reality/form of the state, this chapter employs an understanding of the state as both a ―complex institutional ensemble with its own modes of calculation and operational procedures‖ and a ―site where the specific material condensation of power and domination relations among political forces and classes take place,‖ and applies it to the case of Turkey. In doing so, it suggests that while the strong-state tradition constitutes the idea, rheoteric or type of the state in Turkish modernity, the practice, reality or form of the state has been differential and open to remodifications in accordance with the specific condensation of political forces and classes. In substantiating this argument, the chapter will first provide an account of the strong-state tradition in Turkey, and secondly analyze the differential practices and transformations of the state in the process of continuity and change that Turkish modernity has been undergoing since the late Ottoman times, but especially since the decleration of Turkey as an independent nation-state in 1923. In exploring the differential practices and transformations of the state in the process of continuity and change in Turkish modernity, the chapter will also provide a brief account of the role of the state in agriculture at each stage and phase of capitalism and modernity. Chapter 4 - Turkey started in 2000–2001 an Agricultural Reform Implementation Project (ARIP) with four major components. The core component was ―the design and implementation of the Direct Income Support system.‖ The second component was the ―Farmer Transition Program‖ or, as the government called it, the ―Alternative Crop Program.‖ The third component was ―Agriculture Sales Cooperative Unions (ASCs/ASCUs) Restructuring.‖ The fourth component was the ―Public Information Campaign.‖ There were many institutions involved, but three of them actually provided resources for the formal enactment of ARIP: The Undersecretary of Treasury, the World Bank, and the Ministry of Agriculture and Rural Affairs. Therefore, they deserve to be called prominent players. Consumers, farmers, and processors remained outside the policy network during the formulation of ARIP. ARIP was intended to create simplicity and transparency and eventually to reduce the number of support instruments. However, right from the start, additions to and also reductions of the initial program diluted the reform. The project ended in 2009 without attaining any of the original goals. Chapter 5 - Turkey initiated an agricultural policy reform program in 2000, with the financial and technical support of the World Bank, in order to contribute to financial stabilization and to decrease the price-distorting impact of the prevailing support structure in agriculture. The reform program has never been implemented as was intended at its launch. Output-based deficiency payments eventually gained importance in budgetary transfers without any accompanying decrease in protection for highly protected crops. Expected welfare gains that might have occurred with the transition from border protection to deficiency payments have not been realized. One obvious benefit of the agricultural subsidy reform program has been its significant contribution to fiscal stabilization by making the support budget transparent and establishing accountability. Efficiency estimations show that

Preface

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there is significant inefficiency in agricultural production. As expected, the change in efficiency between 2002 and 2004 is not statistically significant. Efficiency analysis provides important clues about the relationship between efficiency and several characteristics of farm households. The farms in the northern and eastern regions are relatively less efficient compared with their western and southern counterparts. Efficiency performance of farms improves as the scale of operation increases, both in terms of area and of income from agricultural activities. The farm households producing export-oriented crops and using credits have relatively higher efficiency. A high level of efficiency is necessary to achieve competitiveness in agriculture and to increase the welfare of society. Low average efficiency scores imply that significant gains can be achieved by gearing policies towards the factors that may improve efficiency in agricultural production. Chapter 6 - The main presumption of neoliberal thought is that a clear boundary exists between economic forces and all other socially, culturally, and politically determined ones, and markets—if set free from the market-distorting effects of non-economic interventions— should be able to bring about economic prosperity. This chapter is a head-on theoretical challenge to the plausibility of that presumption. Authors argue that assumed market characteristics that facilitate economic analysis—such as information or rationality—are indeed highly relative and contextual, and thus that relying on the market mechanism alone as the only societal institution capable of organizing economic life is naïve if not ill-fated. The authors position is formulated on four clusters of research conducted on general and agricultural matters: price realization; commodity quality; the nature of exchange and production relations; and the relationship between global and domestic markets. In conclusion, authors note that these findings require a fundamental change in the way policy circles and researchers approach the market. Chapter 7 – After five decades of transformation, the share taken by agriculture in total employment in Turkey had decreased from 85 percent in 1950 to 36 percent in 2000. Despite significant technological progress, total agricultural employment remained in the 8–9 million range during much of this period. The pace of transformation hastened upon implementation of the Agricultural Reform Implementation Project (ARIP) in 2001. This process placed some two million additional inhabitants in the ―surplus labor‖ category as the share of agricultural employment fell to under 25 percent by the end of 2008. Authors rely on various data sources to trace the contours of this transformation and examine its manifestations in the rural labor market. Since the transformation burdens the urban labor market with the task of absorbing the surplus labor, authors also review the changes that have taken place in urban areas to gauge the prospects. Authors tease out the demographic manifestations of the transformation by breaking the aggregates down by gender, age, and education. Authors find that the agricultural labor force is ageing at unprecedented rates as the young and women opt for nonparticipation. Women, who typically contribute to the small family farm as unpaid family labor, face the biggest challenges as the distinctions between the rural economy and the urban economy become blurred. Although there are signs that the rural economy took a more diverse form in the post-ARIP period, rural labor markets do not appear to hold much promise for the working-age population. Chapter 8 – Agriculture is generally accepted as one of the sectors most vulnerable to anthropogenic climate change. Although the climate science community is able to create likely projections of expected weather patterns, the overall impact on the total resource base of agricultural production and the expected socio-economic response in technological,

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managerial, and political terms are highly uncertain. Yet, by considering the scientific knowledge on projected climate patterns and on their direct impact on production at the farm level as a starting point, it is possible to create insights as to the likely paths of agricultural adaptation to climate change. For Turkey, climate projections predict increasing surface temperatures (an increase of 2–6°C by 2070–2090 compared with 1960–1990, according to IPCC‘s SRES A2 scenario) and decreasing precipitation patterns (of up to 35 percent in the Mediterranean basin) by the end of this century (Karaca, Sen and Kindap, 2007). Longer growing seasons, heatwaves and water stresses will become the major constraints and limiting factors in crop choices and for yields. From the western to the central and southern regions of Turkey, comprising the largest and most productive arable lands, the expected net reduction in the difference between precipitation and evapo-transpiration (P–E) is particularly alarming. This chapter reviews the environmental and social characteristics of agriculture in Turkey, the likely patterns of climatic change, and its possible consequences on the agricultural sector, fundamentally at the farm level. It argues for short-term and long-term policy options aiming to strengthen the farmers‘ adaptation potential, and addresses the research gaps in building informed agricultural adaptation strategies. Chapter 9 – In the neoliberal era, water is considered an economic good and its efficient allocation and long-term sustainability are claimed to be achievable via decentralization or privatization. Since privatization seems to be more difficult to implement due to public criticism and protest, decentralization, in the shape of devolving the operation and management of water to the users through the establishment of Water User Associations (WUAs), is the global trend within the irrigation management field. This chapter examines the WUAs in Turkey in order to evaluate the impact of their institutional setup, their potentials and problems, and, finally, the impacts of decentralization on use of water and farmers‘ livelihoods. The outcomes of decentralization show that seeing water as an economic good and providing it within a decentralized setting in the absence of monitoring and accountability-enhancing measures prevent the benefits of irrigation from materializing— especially in areas with significant inequalities in access to resources and power dynamics. Without the accompanying legal and institutional framework, and in particular without effective monitoring, enforcement, and regulations, the neoliberal policies are unsuccessful in accomplishing political and economic reforms. Chapter 10 – For decades, the agricultural policies of Turkey have been driven almost exclusively by economic objectives, treating other social and environmental concerns as issues of secondary importance. Similarly, the scope of various structural adjustment programs, including the Agricultural Reform Implementation Project (ARIP), did not extend beyond narrowly set economic goals. However, such a unidimensional approach to policymaking looks increasingly inadequate in dealing with new economic, social and environmental challenges facing Turkish agriculture. Hence, policy priorities need to be revised and new institutions should be developed to design and execute multi-dimensional policy objectives. In this context, the concept of ―sustainability‖ may offer a long-term policy framework. However, the questions of how to define sustainability and its relevance in setting policy priorities are contentious. This chapter discusses the results of a stakeholder perception survey, examining how different groups of Turkish stakeholders define sustainability and how they set or shift priorities when they face policy trade-offs. The results of the survey show that although the vast majority of stakeholders think that Turkish agriculture is not sustainable, there are marked variations among them regarding their priorities on different

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dimensions of sustainability. There is a general convergence of opinion about the deterioration of the environment, whereas the stakeholders‘ perceptions about potential solutions remain divergent. Chapter 11 – Conservation of agrobiodiversity in Turkey is of great significance for the future of its crop genetic resources. On-farm conservation has been a crucial mechanism for the preservation of these resources and the broader agroecosystem. This form of conservation relies largely on farmers‘ choices as to which crops and varieties they plant, and their access to seeds. In this context, this chapter will focus on the link between processes of agrobiodiversity conservation and the legal–institutional framework in Turkey that provides the scope of action. The chapter examines the debates surrounding the Law On the Protection of Breeders‘ Rights for New Plant Varieties (Law No. 5042, 2004), and the recent Seed Law (Law No. 5553, 2006) for the regulation of seeds, in which the main stated objectives are to improve the quality of plant production and to restructure the seed sector, reflecting a move towards privatization. In light of the debates on intellectual property rights over crop plants and the concept of farmers‘ rights, the chapter also evaluates the potential implications of the new legal–institutional framework on farming practices in relation to agrobiodiversity and the cultivation of traditional seed varieties. The chapter argues that privatization of the management of genetic resources stands in sharp contradiction to the very nature of crop genetic resources and the conservation practices of farmers. Chapter 12 – As in many other protectionist countries, the pressure for agricultural reform in Turkey comes mostly from foreign institutions, be it the World Bank, the IMF, the WTO or the EU. The influence of these institutions on Turkish agricultural policy has however decreased in recent years, and therefore reform efforts have been abandoned in many areas. In this paper, authors argue that Turkey should start designing a homegrown agricultural reform policy that is based on New Growth Theory, the economic theory of the new knowledge economy. Such a policy would be focused on facilitating change through entrepreneurship and innovation on the countryside and differ substantially from the policy advice that has been given so far by foreign institutions. Chapter 13 – Despite the robust evidence that rate of returns on investment in agricultural research and development is high in developing countries, such investment has not been a priority in Turkish agricultural policy. However, making rapid technological progress is vital for the sector if it is to recover from economic stagnation and improve the viability of its small farms. Furthermore, tackling new challenges such as climate change, environmental degradation, and benefiting from increasingly competitive international markets, requires new technologies tailored to local circumstances. Hence, this chapter highlights some new applications of biotechnology which offer a range of opportunities in this context. It also underlines the role of establishing an effective intellectual property rights (IPR) regime, as part of a wider institutional environment, in promoting innovation and technological progress in agriculture. It explains how domestically tailored IPR systems, benefiting from the flexibilities provided by international and regional intellectual property laws, which would allow Turkey to strike an optimum balance between the goals of enhancing the accessibility of new technologies to small farms and strengthening the incentives for the private sector to innovate new pro-small-farm technologies. Chapter 14 – The work on setting up a legal framework for agrobiotechnology in Turkey is largely based on using the international regulations as a benchmark, with the Cartagena Biosafety Protocol and the European Union legislation being the two main influences. The

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basis of the international regulation and particularly of the EU legislation is the ―precautionary principle.‖ This principle separates the legitimate public decision from scientific expertise and transforms the rule-setting processes. The precautionary principle is policy based and requires taking into account public perception of the risk and the social acceptability of the actions in a transparent and participatory forum. ―Procedural rationality‖ and ―procedural legality‖ in the rule-setting and decision-making processes are at the core of the principle. This chapter will critically assess the national legislative work on agrobiotechnology in different ministries and public institutions from the point of view of both substance and procedure, and particularly with a view as to whether these conform to the requirements of the precautionary principle. Chapter 15 – The Panel in the World Trade Organization (WTO) dispute EC—Biotech decided that the Cartagena Protocol is not applicable in WTO disputes as long as not all WTO Members are also parties to the Cartagena Protocol. On the other hand, the Panel declared that the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) is not only applicable to food safety risks from biotech products, but also to environmental risks from biotech products. Hence, the risk assessment principles of the SPS Agreement should be taken into account in particular by countries which have yet to develop coherent regulatory frameworks for novel technology applications in agriculture, like biotechnology and nanotechnology. Chapter 16 – This chapter looks at the application of knowledge to rural development via new information and communication technology (ICT) tools as. After a closer look at which technologies and devices would be suitable and affordable for knowledge transfer of specific knowledge to rural areas in developing countries, it will examine best practices in that regard and analyze the conditions under which the potential of ICTs can be used successfully to promote rural entrepreneurship and environmental sustainability, without destabilizing the targeted societies. Chapter 17 – Biofuels are a form of renewable energy produced from biomass. Biofuels, as a clean alternative to the fossil fuels, are of wide interest due to the increasing world energy demand and high fossil fuel prices. Using biofuels to partly replace fossil fuels has environmental and economic benefits and it is also an important way of utilizing renewable sources and providing a variety of sources of energy. Production and use of biofuels have a lot of advantages at local, state, and national levels. Biofuel production provides additional income to the local economy and households, while also contributing to job creation. Benefits to agriculture and the rural economy are of crucial importance to the countries that produce biofuels. Biofuels are classified into first, second, third, and fourth generations in this chapter; first-generation biofuels are examined in detail by focusing on bioethanol, biodiesel, bioheat, and bioelectricity production, while emphasizing their potential for today and for the future by considering alternative policies. The importance of biofuels in Turkish plant and energy agriculture, the opportunities they provide, and related research and development are also explored by taking into account the world‘s and the EU‘s positions. Chapter 18 – Turkey‘s membership in the World Trade Organization (WTO) constitutes the single most important international regulatory framework for its agricultural policy, today and in the near future. There is a balance between rights and obligations: market access rights are guaranteed by the WTO schedules of concessions, whereas the rules for agricultural support policies are mostly defined in the Agreement on Agriculture, with Turkey‘s own WTO schedule laying down the quantitative limits for government support measures and

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import tariffs. These opportunities and constraints are likely to remain unchanged for as long as the Doha Round negotiations on multilateral trade are pending. The presently foreseeable outcome will improve Turkey‘s export opportunities but it also entails considerable import tariff reductions and domestic policy space restrictions. In order to cope with these challenges considerable groundwork is required now, leading to the policy adjustments necessary to ensure that Turkey can continue to benefit from agricultural trade as a source of economic growth. If ―Doha‖ is to avoid exacerbating the already important dichotomy of Turkish agriculture, special adjustment measures will be necessary for the less competitive producers. The ongoing agricultural reform process in Turkey is of course a crucial element in assessing and reformulating Turkey‘s agricultural trade policy. This chapter aims at contributing to the debate from a global and interdisciplinary perspective. Chapter 19 – Many standards are imposed to protect the public against food safety risks, but there are other standards, including private ones, that deal with issues such as food quality, environmental and social factors, and sustainable development. From legal and economic perspectives, both private standards and public standards affect international trade in fresh horticultural crops. These standards are increasingly important for countries exporting agricultural products, such as Turkey, as producers and exporters are required to comply with these standards in order to gain access to foreign markets. Public standards are set by Governments and their agencies and are subject to the international trade rules under the World Trade Organization of which Turkey is a Member, whereas private standards are by definition privately imposed by business and non-governmental organizations such as GLOBALGAP and are not subject to any international regulations. This chapter explores the differences between public and private standards and their impact on farmers in the developing countries, in particular on producers and exporters of horticultural products in Turkey. Chapter 20 - The Word Bank-initiated Agricultural Reform Implementation Project (ARIP) has been at the forefront of Turkey‘s agricultural policy agenda since 2001. As the project officially came to an end, this book has undertaken an ex post assessment of its overall impact on the agricultural sector. Has it fulfilled its ambitious objective of reforming and restructuring Turkish agriculture? Or should it be recorded as a failure of the neo-liberal doctrine? Various chapters of the book have exclusively dealt with these questions. Given that the end of ARIP has also left considerable uncertainty about the future of the country‘s agriculture, the book has gone beyond an assessment of the impact of ARIP to offer a new multidimensional policy agenda. Bringing together an international group of expert economists, environmental scientists, political scientists, sociologists, and lawyers, it has dealt with a variety of issues which are increasingly important, yet have been rather neglected in policy formulations. The policy agenda proposed here involves a new and more dynamic approach to agricultural development, and includes institutional and regulatory development in the fields of environmental sustainability and climate change, innovation and technology, and international trade.

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 1

INTRODUCTION: RETHINKING STRUCTURAL REFORM IN TURKISH AGRICULTURE Baris Karapinar1, Fikret Adaman2 and Gokhan Ozertan3 1

World Trade Institute, University of Bern, Switzerland Department of Economics, Bogazici University, Turkey 3 Department of Economics, Bogazici University, Turkey 2

Turkish agriculture has been experiencing a period of unique policy experiment over the last couple of years. A World Bank-initiated project, called the Agricultural Reform Implementation Project (ARIP), has been at the forefront of policy change. It was initially promoted by the Bank as an exemplary reform package which could also be adopted by other developing countries. It was introduced in 2001—as part of a major International Monetary Fund (IMF)/World Bank-imposed program of ―structural adjustment‖—after the country had been hit by a major financial crisis. The project has finally come to an end in 2009, and there is now an urgent need for a retrospective assessment of its overall impact on the agricultural sector. Has it fulfilled its ambitious objective of reforming and restructuring Turkish agriculture? Or should it be recorded as a failure of the neo-liberal doctrine? This book aims at finding answers to these questions by investigating the legacy of ARIP from a multidisciplinary perspective. The end of ARIP has also left considerable uncertainty about the future of Turkey‘s agricultural policymaking. Since the country‘s institutional capacity has also been occupied by efforts to comply with burdensome European Union (EU) legislation in the process of accession negotiations and with fulfilling its multilateral commitments to the WTO, recent developments at the regional and global levels have further exacerbated this uncertainty. The fact that the country‘s EU bid now faces serious difficulty—with eight chapters of its entry negotiations being suspended—and the lack of progress in the ―Doha Round‖ suggests that any policy strategy should be developed at the national level at least in the short and medium terms. This means that Turkey urgently needs to design its own post-ARIP strategy that could realistically meet the challenges and opportunities ahead. Hence, this book brings together an international expert group of economists, environmental scientists, political scientists, sociologists, and lawyers, and it also offers a new policy agenda which involves a more dynamic approach to agricultural and rural development, including institutional and

2

Baris Karapinar, Fikret Adaman and Gokhan Ozertan

regulatory issues in the fields of environmental sustainability and climate change, innovation and technology, and international trade. The book contains six parts. The chapters in the first part sketch the historical background of ARIP, offering a fresh analysis of rural transformation and the role of the state in the agricultural economy. The second part focuses on the assessment of the political and economic impacts of ARIP on Turkish agriculture. The third part looks at various demographic trends and analyzes the process of labor transition, also focusing on the impact of ARIP on the rural labor force. The fourth part of the book extends beyond the analysis of ARIP and looks at the environmental dimension of rural development. Contributions cover major issues such as climate change, allocation of water resources, policy discourse on sustainability, and environmental regulation. The fifth part examines technology and innovation, bringing in theoretical and institutional factors affecting innovation in rural economies, and discussing best practices around the world. The sixth part looks at international trade, in the context of the potential obligations and opportunities Turkey faces with respect to its WTO membership.

RURAL TRANSFORMATION AND THE ROLE OF THE STATE The grand visions and overarching themes of rural development (or rural transformation) that prevailed in the 1960s and 1970s gave way to micro-level studies with ―post-modern‖ themes in the 1980s and 1990s. While the dominant ―Washington Consensus‖ paid no particular attention to development (e.g. de Janvry, Key and Sadoulet, 1997; Kydd and Dorward, 2001; Onis and Senses, 2005), concentrating exclusively on market-driven growth, academia lost interest in the big questions of agricultural and rural development. Similarly, the vigorous debate amongst the Turkish intelligentsia, especially its leftist contingent, on ―developmentalism‖ suddenly ceased. Studying agricultural and rural development has become a fashion passé. In this context, Chapter 2 by Keyder and Yenal, offers a fresh assessment of the new trends of social and economic transformation in rural areas. It particularly highlights how rural economies have been experiencing a rapid transition from traditional low intensity activities towards more diversified economic structures with high labor mobility and new forms of production patterns such as contract farming and a growing share of non-agricultural incomes in rural areas (e.g. Ashley and Maxwell, 2001; Hazell and Diao, 2005; Karapinar, 2007). The chapter also analyzes how the existing institutions, which were designed to address the concerns of the past, are now failing to adapt to the realities of this more dynamic economy, losing their policy relevance. This calls into question the role of the state in agriculture in a new phase of capitalism and modernity. In Chapter 3, Keyman sketches the background of the strong state tradition in Turkish modernity, while making a distinction between the ―idea/rhetoric/type‖ of the state, which may not correspond to the ―practice/reality/form‖ reflecting the outcome of the complex relationships among political forces. The chapter places the differential practices and transformations of the state into a historical context and looks back to see how it has been losing its ―strength‖—as Turkey has become a more complex society and the processes of For the debate and its substantial reviews, see Boratav (1969), Erdost (1969) Cinar and Silier (1979), Keyder (1983), Seddon and Margulies (1984), Aksit (1985, 1993).

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globalization have delimited its ―power‖ over society. It draws conclusions as to how the agricultural sector may illustrate that the strong state tradition has been weakening in its role in the agricultural economy.

ARIP: NEO-LIBERAL HYPE OR PREMATURE HOPE? Against this background of rural transformation and a relatively strong role of the state, Turkey has a long history of ―structural adjustment‖ programs. In the early 1980s, it was one of the first developing countries to have experience of such policy packages, after being hit by a major financial crisis at the end of the 1970s. With the backing of five successive structural adjustment loans supplied by the World Bank between 1980 and 1984 (Onis, 2000), a new economic program was adopted, which changed the fundamentals of the macro-management of the Turkish economy. Its early 1990s version, the ―Washington Consensus‖, was similar in nature, imposing financial liberalization and tight monetary policies involving limited government spending, wage repression and widespread privatization. Then the very foundations of the Washington Consensus were undermined, resulting in the emergence of the ―Post-Washington Consensus‖ (PWC). However, it was argued that the new line of thinking has not gone far enough in overcoming the limitations of the neo-liberal policy agenda in addressing pressing development challenges such as income distribution, poverty, and sustainable development (Onis and Senses, 2005). The Turkish economy experienced a highly volatile period in the second half of the 1990s, and it slipped into a deep crisis in 2001. Together with the IMF, the government initiated a major stabilization program aimed at restoring macro-economic and fiscal stability. As part of this program, the ARIP was designed by the World Bank and the Turkish Treasury. The main objective was to restructure Turkish agriculture, and, especially, to reform agricultural subsidy policies towards a decoupled system of support (Furtan, Guzel and Karantininis, 2007). As described by Akder in Chapter 4, ARIP had four major components. It introduced a unified national program phasing out all subsidies for fertilizer, as well as all credit and price supports in order to link domestic prices to world prices. The potential negative short-term impacts resulting from the removal of the subsidies were to be addressed by a unified national program of direct income support (DIS) for all farmers. However, from the beginning, the objective was not to compensate farmers fully, but rather to ―cushion‖ their short-term losses (Akder, 2007). The second component involved the privatization of parastatals and quasigovernmental sales cooperative unions, reducing government involvement in the production, marketing, and processing of agricultural commodities. The third component was to encourage farmers to make the transition from previously subsidized products to alternative crops. The final component was the ―Public Information Campaign.‖ Chapter 4 by Akder investigates how some important stakeholders were excluded from participating in the designing of the project. It also evaluates whether or to what extent the official goals of ARIP, as set out at the beginning of the project, have actually been achieved. Chapter 5 by Cakmak and Dudu focuses on to the assessment of the economic impact of ARIP at the sectoral level. Using macro-economic data series and the results of the panel data collected by the Treasury in two waves in 2002 and 2004—by surveying more than 5,000

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rural households—the aim of this chapter is to estimate the quantifiable impact of ARIP on Turkish agriculture. At the macro-level, it assesses to what extent ARIP has led to a transition from border protection to deficiency payments, realizing significant welfare gains as a result. At the household level, on the other hand, the chapter offers a thorough analysis of agricultural productivity, providing important clues about the relationship between efficiency and several characteristics of farm households. Chapter 6 by Caliskan and Adaman goes back to the neoliberal theory and challenges the plausibility of the main presumption of the neoliberal thinking that there is a clear boundary between economic forces and all other socially, culturally, and politically determined ones, so that markets—if set free from the market-distorting effects of non-economic interventions— would be able to bring about economic prosperity. The authors argue that assumed market characteristics that facilitate economic analysis—such as information or rationality—are indeed highly relative and contextual, and therefore singling out the market mechanism as the only societal institution capable of organizing our economic life is naïve if not ill-advised.

LABOR TRANSITION IN RURAL AREAS The book then turns to the impact of ARIP on the agricultural labor force. Although total agricultural employment had remained unchanged for a long period before 2000, in Chapter 7, Ilkkaracan and Tunali argue that the pace of transformation accelerated upon implementation of ARIP. They illustrate how this dynamic process placed millions of additional inhabitants in the ―surplus labor‖ category—as the share of agricultural employment fell to under 25 percent by the end of 2008. Tracing various factors, the chapter also looks at the potential reifications of such a transition for the urban labor market whose absorption capacity has already been strained. In line with other contributions to the book, this chapter highlights that the diminishing boundaries between the rural and the urban economies are also affecting the rural labor force. Temporary migration, mainly of men, to urban areas to engage in casual work, often taking part in the informal economy, is increasingly common. Looking at trends in gender, age, and education, it identifies some major challenges facing young people and women in the workforce in rural areas.

ENVIRONMENT: CLIMATE CHANGE, WATER MANAGEMENT AND SUSTAINABILITY For decades, the agricultural policies of Turkey have been driven almost exclusively by economic objectives, treating environmental concerns as issues of secondary importance. Similarly, the scope of various structural adjustment programs, including ARIP, did not extend beyond narrowly set economic goals. However, such a one-dimensional approach to policy-making looks increasingly inadequate in dealing with new environmental challenges. In addressing environmental challenges, it is often argued that public institutions and legislation are ineffective due to lack of actual implementing power, corruption, and clientelism (Adaman, 1997; Kalaycioglu, 2001; Adaman and Arsel, 2005). Hence, this book

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also offers a technical, political and regulatory assessment of environmental challenges facing Turkish agriculture. Chapter 8 by Saysel offers a detailed account of the current scientific knowledge on projected climate patterns and on their direct impact on farm production. At the regional level, Saysel maps out the projected impacts of climate change, namely increasing surface temperatures and decreasing precipitation patterns. He also highlights the alarming prospect of the extreme climate events which will increase volatility in production and constrain crop choices and yields. His chapter concludes by underlining the importance of short-term and long-term adaptation strategies, aimed at improving farmers‘ capacity. It also identifies serious research gap in this field. In this context, Turkey urgently needs to address its water policy in agriculture (Adaman and Ozertan, 2007). In the neoliberal era, water is considered an economic good and its efficient allocation and long-term sustainability are claimed to be achievable through decentralization or privatization. Since privatization seems to be more difficult to implement due to public criticism and protest, decentralization, in the form of devolving the operation and management of water to the users through the establishment of Water User Associations (WUAs), is a global trend within the irrigation management field. Chapter 9 by Kadirbeyoglu and Ozertan examines the WUAs in Turkey in order to evaluate the impact of decentralization on use of water and on farmers‘ livelihoods. It illustrates how it prevents, in the absence of monitoring and accountability-enhancing measures, the benefits of irrigation from materializing—especially in areas with significant inequalities in access to resources. However, addressing these environmental concerns requires policy priorities to be revised and new institutions to be developed. In this context, in Chapter 10, Karapinar argues that the concept of ―sustainability‖ may offer a long-term policy framework. Yet the questions of how to define ―sustainability‖ and its relevance in setting policy priorities are contentious. Hence, the chapter scrutinizes the concept and analyzes how it has evolved in public and policy discourses in Turkey. It presents the results of a stakeholder perception survey, examining how different groups of Turkish stakeholders define ―sustainability‖ and how they set or shift priorities when they face policy trade-offs. The chapter shows the extent to which major stakeholders consider Turkish agriculture to be ―sustainable‖, and how they perceive potential solutions to the problem of how to achieve sustainability. Developing effective regulatory mechanisms is also crucial to address growing environmental problems. For instance, conservation of agrobiodiversity is of great significance for the future of crop genetic resources (Aksoy, 2005). In this context, Chapter 11 by Aksoy focuses on the link between processes of conservation of agrobiodiversity and the legal–institutional framework in Turkey that determines the scope of action. It examines the debates surrounding the Law on the Protection of Breeders‘ Rights for New Plant Varieties, and the recent Seed Law for the regulation of seeds, in which the main stated objectives are to improve the quality of plant production and to restructure the seed sector, reflecting a move towards privatization. The chapter argues that privatization of the management of genetic resources stands in sharp contradiction to the very nature of crop genetic resources and the conservation practices of farmers.

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INNOVATION AND TECHNOLOGY: DEVELOPING A KNOWLEDGE-BASED RURAL ECONOMY The need to integrate Turkish agriculture into the global knowledge economy is ever more pressing in the era of increasing globalization. Investments in human capital and improved access to knowledge and technology relevant to business will be an important precondition for ensuring a smooth transition from conventional agriculture to knowledgeintensive farm practices that combine consumer preferences on the demand side with the use of innovative practices and technologies on the supply side. This long-term approach to innovation policy would allow rural areas to take advantage of the new opportunities offered by the more advanced technologies of the knowledge economy (information and communication tools (ICTs), biotechnology, etc.) and use them as tools of social empowerment. It would also generate off-farm employment and improve agricultural diversification and competitiveness. Therefore, there is an urgent need for advanced socioeconomic research leading to feasible policy suggestions for promoting, innovation and technology in rural areas. Chapter 12 by Aerni, therefore, aims at developing a scientific basis for decision-making regarding the future of Turkey‘s technology policies in agriculture (Aerni, 2007). Based on the foundations of New Growth Theory developed by Paul Romer (1990, 1994) and the seminal book by David Warsh ―Knowledge and the Wealth of Nations‖ (2006), it first investigates theoretical and institutional factors affecting innovation, technology transfer, and entrepreneurship in rural economies. It then identifies ―best practices‖ in institutional development by comparative case analysis, mainly focusing on New Zealand. It explores the extent to which some institutional reforms adopted in other countries could help to make Turkish agriculture more innovation-driven. Aerni argues that such a theoretical and practical approach focusing on facilitating change through entrepreneurship and innovation in the countryside would differ substantially from the policy advice that has been given to Turkey by international institutions, including the World Bank. Despite the robust evidence that the rate of returns on investment in agricultural research and development is high in developing countries, such investment has not been a priority in Turkish agricultural policy. However, rapid technological progress is vital for the sector if it is to recover from economic stagnation (see Chapter 5 by Cakmak and Dudu) and improve the viability of its small farms. Furthermore, as noted by Karapinar and Temmerman in Chapter 13, tackling new challenges such as climate change, environmental degradation, and being able to benefit from increasingly competitive international markets, requires new technologies tailored to local circumstances (Lipton, 2005). Hence, Chapter 13 highlights some new applications of biotechnology which offer a range of opportunities in this context. It also underlines the role of establishing an effective intellectual property rights (IPR) regime, as part of a wider institutional environment, in promoting innovation and technological progress in agriculture (Karapinar and Temmerman, 2008). It explains how domestically-tailored IPR systems, benefiting from the flexibilities provided by international and regional IP laws, would allow Turkey to strike an optimum balance between the goals of enhancing the accessibility of new technologies to small farms and strengthening the incentives for the private sector to innovate new pro-small-farm technologies.

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Given that the Turkish government has recently decided to revise its regulatory and institutional frameworks to allow genetically modified organisms (GMOs) to be produced and consumed in the country (Isik, 2009). Turkey needs an effective framework regulating research and implementation activities relating to agro-biotechnology (Ozertan and Aerni, 2007). As Kivilcim describes in Chapter 14, the current legislation is largely based on international regulations, mainly influenced by the Cartagena Biosafety Protocol and the European Union legislation. The chapter analyzes how the ―precautionary principle‖ constitutes the backbone of this regulation, which separates the public perception of the risk and the social acceptability from scientific evidence. Hence, it discusses the distinction between ―procedural rationality‖ and ―procedural legality‖ in the setting of rules. This chapter critically assesses the national legislative work on agro-biotechnology from the point of view of both substance and procedure, and particularly with a view to determining whether they conform to the requirements of the precautionary principle. In this context, it is also essential that Turkey takes into account potential regulatory challenges arising from its various international obligations. Simply copying EU regulations might not be adequate to provide a legal framework conducive to the assessment and management of risks related to its specific socio-economic and environmental context. Hence, Chapter 15 by Burkard exclusively focuses on the regulation of biotechnology products at the international level. It considers how different approaches toward the assessment of risks deriving from biotech products shall be addressed. In so doing, it looks at the distinctions between risk assessment procedures according to rules of the Cartagena Protocol and those following principles of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement). In particular, it highlights the conflicts between the Cartagena Protocol and the SPS Agreement which emerged in WTO disputes, namely in the EC – Biotech case. Hence the chapter argues that since Turkey is a party to both the Cartagena Protocol and the SPS Agreement, its domestic regulation should take into account the complementarities and potential conflicts between the two and the related problems of implementation. Chapter 16 by Sahlfeld looks at the practical applications of knowledge to rural development through new ICT tools as a strategy for success in market competition. It underlines that while new production technologies address the supply-side issues of farming, ICT tools help improve the demand-side management, affecting farmers‘ operational decisions from the pre-harvest crop selection phase to post-harvest processing (Sahlfeld, 2007). It examines best practices in other developing countries where ICT tools provide access to market-relevant information, help meet product standard requirements, and offer new business opportunities. The chapter suggests policy recommendations for Turkey to use to tap into the potential of ICT tools to promote a knowledge-driven rural economy. Another area of Turkish agriculture where significant investment in research, development, and innovation is required is biofuels. As an alternative to fossil fuels, biofuels offer considerable environmental and economic benefits, as long as they are produced in a sustainable manner. Hence, Chapter 17 by Isler and Karaosmanoglu studies the potential environmental, economic, and social benefits of biofuels in the context of Turkish agriculture. In particular, the chapter places a special emphasis on the role of second- and third-generation technologies which offer groundbreaking developments in the field. It also undertakes a legal analysis of the relevant Turkish legislation and the government‘s policies towards research and development inbiofuels.

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INTERNATIONAL TRADE AND STANDARDS The final part of the book lays out the international legal framework for agricultural trade. The growth of foreign trade in agricultural commodities and Turkey‘s commitments to the WTO as well as its negotiations on membership of the EU necessitate an analysis of the country‘s multilateral and bilateral obligations affecting its domestic agricultural support and trade policies. Turkey‘s membership in the WTO constitutes one of the most important international parameters for its agricultural policy. Hence, Chapter 18 by Haeberli describes Turkey‘s rights and obligations in the context of the multilateral trade negotiations of the Doha Round. It analyzes the pros and cons of the potential outcome of the Round on Turkey‘s export opportunities as well as its import tariff reductions and domestic policy space restrictions. The chapter describes how Turkey should adjust its domestic policies to ensure that it can continue to benefit from agricultural trade as a source of economic growth. One of the growing problems faced by Turkish agricultural exporters is the increasing number of public and private standards (e.g. standards on food safety, quality and environmental and social sustainability) imposed by developed countries. In Chapter 19, Jusoh looks at the issue of ―standards‖ (public and private) applicable to fresh horticultural crops from both a legal and an economic perspective. The chapter covers the EU‘s regulatory requirements on sanitary and phytosanitary measures for fresh fruits and vegetables, which are often considered to be very stringent. It also focuses on standards imposed by the private sector, notably the EurepGAP protocol for the production of fresh horticultural crops, which goes beyond public requirements. Hence, it highlights the extent of legal fragmentation at various levels of analysis, namely, at the national, the EU, and the international levels, and analyzes their impact on producers and exporters of horticultural products in Turkey.

LOOKING FORWARD Turkey was one of the first developing countries to experience ―structural adjustment‖ program in the early 1980s. This book attempts to evaluate the impact of the most recent of these programs, namely ARIP, on the process of rural transformation in Turkey. It also aims to fill a research gap which has opened up since the end of the ARIP project. There is now great uncertainty about the future of Turkey‘s agriculture, which is exacerbated by the lack of progress in relation to the EU enlargement process and multilateral trade negotiations through the WTO. This means that Turkey urgently needs to design its own post-ARIP strategy that could realistically face the challenges discussed in this book, while also benefiting from opportunities arising from new markets, technological innovations, and the applications of the knowledge economy. Hence, this book offers a new, multi-dimensional policy agenda encompassing the economic, environmental, technology, trade and law aspects of agricultural and rural development.

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REFERENCES Adaman, F. (1997). The political economy of the environment in Turkey. New Perspectives on Turkey, Fall 17, 129–150. Adaman, F. & Arsel, M. (Eds.) (2005). Environmentalism in Turkey: between democracy and development?. Aldershot: Ashgate. Adaman, F. & Ozertan, G. (2007). Perceptions and practices of farmers towards the salinity problem: the case of Harran Plain, Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6(4/5), 533–551. Aerni, P. (2007). Agriculture in Turkey: structural change, sustainability and EU compatibility (Editorial). International Journal of Agricultural Resources, Governance and Ecology, 6 (4–5), 429–439. Akder, H. (2007). Policy formation in the process of implementing agricultural reform in Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6(4– 5), 514–532. Aksit, B. (1985). Koy Kasaba ve Kentlerde Toplumsal Degisme (Social Change in Villages, Towns and Cities). Ankara: Turhan Kitabevi. Aksit, B. (1993). Studies in rural transformation in Turkey 1950–1990. In P. Stirling (Ed.), Culture and Economy. Cambridgeshire: Eothen Press. Aksoy, Z. (2005). Biodiversity and biotechnology in the agricultural sector. Environmentalism in Turkey: Between democracy and development? In F. Adaman and M. Arsel (Eds.), Environmentalism in Turkey: Between Democracy and Development? Aldershot: Ashgate. Ashley, C. & Maxwell, S. (2001). Rethinking rural development. Development Policy Review, 19 (4), 395–425. Boratav, K. (1969). Gelir Dagilimi (Income Distribution). Istanbul: Gercek Yayinevi. Cinar, M. & Silier, O. (1979). Turkiye Tariminda Isletmeler Arasi Farklilasma (Differentiation between Businesses in Turkish Agriculture). İstanbul: Boğaziçi Üniversitesi. de Janvry, A., Key, N., & Sadoulet, E. (1997). Agricultural and rural development policy in Latin America: New directions and new challenges. Working Paper No. 815, Department of Agricultural and Resource Economics Division of Agriculture and Natural Resources, University of California at Berkeley. Erdost, M. (1969). Turkiye Sosyalizmi ve Sosyalizm (Socialism in Turkey and Socialism). Ankara: Sol Yayınları. Furtan, W.H., Guzel, A., & Karantininis, S. (2007). The Doha talks and the bargaining surplus in agriculture. The Estey Centre Journal of International Law and Trade Policy, l8 (2), 138–154. Hazell, P. & Diao, X. (2005). The Role of agriculture and small farms in economic development. Prepared for ‗the Future of Small Farms‘ Workshop, Wye, UK, June 26– 29, 2005. Isik, T. (2009). Genetically modified crops are coming [Genetiği değiştirilmiş bitkiler geliyor]. Radikal, 02.06.2009:4, available at http://www.radikal.com.tr/ Radikal.aspx?aType=RadikalDetay&ArticleID=938771&Date=03.06.2009&CategoryID =78

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Kalaycioglu, E. (2001). Turkish democracy: Patronage versus governance. Journal of Turkish Studies, 2 (1), 54-70. Karapinar, B. (2007). Managing rural transformation in Turkey 1980–2004: Case studies from three regions. International Journal of Agricultural Resources, Governance and Ecology, 6 (4–5), 483–513. Karapinar, B. & Temmerman, M. (2008). Benefiting from biotechnology: pro-poor IPRs and public private partnerships. Biotechnology Law Report, 27, 189–202. Keyder, C. (1983). Paths of rural transformation in Turkey. The Journal of Peasant Studies, 2 (1), 34–49. Kydd, J. & Dorward, A. (2001). The Washington Consensus on poor country agriculture: Analysis, prescription and institutional gaps. Development Policy Review, 19 (4), 467– 478. Lipton, M. (2005). The family farm in a globalizing world: The role of crop science in alleviating poverty. Washington, DC: International Food Policy Research Institute, 2020 Discussion Paper, Publication No. 40. Onis, Z. (2000). The Turkish economy at the turn of a new century. In M. Abramowitz, (ed.), Turkey's Transformation and American Policy. New York: Century Foundation Press. Onis, Z. & Senses, F. (2005). Rethinking the emerging Post-Washington Consensus. Development and Change, 36 (2), 263–290. Ozertan, G., & Aerni, P. (2007). GM cotton and its possible contribution to environmental sustainability and rural development in Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6 (4–5), 552–575. Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98 (5), 71–102. Romer, P. M. (1994). New goods, old theory, and the welfare costs of trade restrictions. Journal of Development Economics, 43, 5–38. Sahlfeld, M. (2007). How does ICT work for development: A review of the challenges and opportunities. African Technology Development Forum (ATDF) Journal, 4 (1). Seddon, D. & Margulies, R. (1984). The Politics of the agrarian question in Turkey: Review of a debate. Journal of Peasant Studies, 11 (3), 28–60. Warsh, D. (2006). Knowledge and the Wealth of Nations. New York: W. W. Norton.

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 2

RURAL TRANSFORMATION TRENDS AND SOCIAL POLICIES IN TURKEY IN THE POSTDEVELOPMENTALIST ERA 1

Caglar Keyder1 and Zafer Yenal2 Sociology Department, Binghamton University and Ataturk Institute, Bogazici University, Turkey 2 Sociology Department, Bogazici University, Turkey

ABSTRACT With the ending of the national developmentalist era in the early 1980s and the opening of agriculture and the food industry to global currents, significant trends pointing to a social and economic transformation of the rural sector become apparent. The most vital of these trends is that agriculture is no longer the only or primary source of income for the rural population, and non-agricultural incomes are increasingly important for rural households. In addition, in the new era, new production patterns such as labor-intensive and diversified agriculture, as evidenced especially by contract-farming practices, become more pervasive in rural areas. As a result of the internationalization and deregulation trends in Turkish agriculture, the price, product, and production structure in rural areas has become much more complex and inclusive of multiple components. Although these trends may differ from region to region, for a large proportion of rural households, agricultural support policies and state institutions have already lost their previous substance and were significantly less effective in organizing the agricultural sector. This paper argues that these developments have important implications for population dynamics as well.

INTRODUCTION Rethinking the shifting qualities of agricultural structures, and by association the relationship between urban and rural populations, will no doubt point to numerous policy areas where a fundamental re-thinking of the development process will become necessary. In

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this chapter we focus on only two of these areas: population dynamics and agricultural income policies. The first issue, population dynamics, will mean changes in urban and rural demographic processes. The literature on modernization and development assumes that rural migration will continue unabated and that the proportion of urban population will continually increase. Expectations related to urbanization, and decisions concerning investments in infrastructure and in health and education services, are all shaped in line with this assumption. Bureaucrats and politicians have always had to plan for problems such as over-urbanization and the expansion of shantytown areas. However, if population dynamics do not follow the assumption stated above, or in other words, if we no longer assume that rural migration will be constant, then it is clear that, along with existing policy paradigms, public investment decisions will also have to change. In addition, it will also be necessary to rethink urban social structures,; where the newly urbanized population will fit in the sociological framework, and how they will be integrated. This rethinking will have an obvious impact on urban management, as well as on health, education, and residential planning and investment. An examination of the second issue, income policies, meaning subsidy and price support programs for the rural sector, again reveals a clear assumption that has remained implicit for some time. The assumption is that the rural population is the producer of agricultural goods, and that they derive their incoıme from the sale of these goods. Moreover, there are distinct specializations: for instance, villagers of the Black Sea Region grow hazelnuts or tea, whereas villagers in Central Anatolia grow grains and legumes. The only source of income for tobacco producers is the tobacco crop. Villagers‘ income is highly dependent on agricultural input and the retail price of the product; hence state policies determine incomes, because they can manipulate these prices. No doubt these assumptions still hold to a great extent. We argue,however, that the proportion of rural populations that live solely on agricultural production is decreasing, and a growing proportion of the said population is increasingly experiencing different conditions, similar to those in urban areas in terms of the diversity and complexity of income-generating activities. Moreover, as different production and labor control methods have gained ground in recent decades within the context of the global restructuring process, the income that producers earn is no longer completely dependent on subsidies . The implications of these developments on ―income policies‖ are also clear. Namely, it will be necessary to acknowledge that price support policies have only a limited impact on rural incomes, and to look for different social policies geared to improve the prosperity of the rural population.

GLOBALIZATION AND CHANGING LANDSCAPE OF AGRICULTURE IN TURKEY Recent debates on agricultural support policies constitute the background of this chapter. Triggered by the financial crisis of the state and International Monetary Fund (IMF) pressures, these debates arose across the world, in a framework similar to that in Turkey. The debated issue in every country was the cost of ―populist‖ policies geared to the rural population, and a call for their abolition. To summarize briefly, two principal perspectives were aired during these discussions. According to one point of view, the foreseen radical changes to agricultural support policies would further stress the already suffering agricultural

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industry and lead to unpleasant, large-scale social transformation (migration to cities, unemployment, poverty, social unrest, and so on). On the other hand, the view in support of agricultural reforms argued that agriculture in Turkey is experiencing grave production and efficiency problems due to populist support price policies which add a burden to both the state budget and the taxpaying public (see Chapter 4 by Akder; Chapter 5 by Cakmak and Dudu). Moreover, these policies protect one section of society (producers) against the remaining majority (consumers of agricultural goods). Consequently, this approach argues, these changes would have a positive impact on Turkey‘s agriculture and economy, and even boost overall prosperity. We believe that this debate addresses the issue largely within the context of erroneous assumptions and paradigms, and ignores the significant economic and social transformation evidenced in the rural sector in recent decades. With the ending of the national developmentalist era in the early 1980s and the opening of agriculture and the food industry to global currents, significant trends pointing to a social and economic transformation of the rural sector became apparent. We believe the most vital of these trends is that agriculture was no longer the only or primary source of income for the rural population, and non-agricultural incomes came to gain increasing importance for rural households. In addition, new production patterns such as labor-intensive and diversified agriculture, as evidenced especially by contract-farming practices, became more prevalent in rural areas. Although these trends may differ from region to region, it may be argued that for a large proportion of rural households, agricultural support policies and relevant institutions had already lost their previous importance and were significantly less effective in regulating agriculture. Moreover, when advances in transportation and communication are taken together with the trends delineated above, it may be said that village populations have departed from a model of passive dependency on agricultural price policies when they previously lived out their lives in their villages, earned a majority of their income from marketing one or maybe two crops (with state support), and had limited access to information and technology. Shrinking of the formal labor market in urban centers, and changes in the living conditions of the rural population and their views on and expectations from migration to urban hubs, may also be added to this picture. In other words, the rural population will be more enthusiastic about participating in efforts that would expand their income-generation base and attempt to make the village more livable, both economically and socially. It is possible to explain the transformations depicted above from another perspective: transformations on the global level, which we will call ―globalization‖ for brevity, have doubtless impacted the developmental path of villages in Turkey, changing not only villagers‘ lifestyles and economic and technological horizon, but migration and urbanization trends as well. It is evident that, in attempting to understand the impact of state policies on the rural population and the possible developments that will result from the abolition of the price support system, we must first understand how globalization has changed the existing conditions. The changes that are summarized as globalization, and that leave a mark on the global money, commodity and labor markets, have a direct influence on political and economic processes. During such times, any effort to understand the dimensions of economic and social life in rural areas, and to make inferences concerning social policy based on this understanding, would require rethinking the sociological transformation and policy frameworks of the national economy. We would like to draw attention especially to two points. First, considering the economic dimensions of globalization, during the crisis and restructuring phase the global economy went through in the 1970s, there was a hugeincrease

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in international corporations‘ capacity to control global commodity, capital, and money flows. This state of affairs was also evident in agriculture, and the process of internationalization decreased the role played by the state in organizing national markets (see Chapter 3 by Keyman).National agriculture and food industry came under the influence of the global agro– industry complex, not only in Turkey, but almost everywhere. In parallel, as production and labor control methods favored by global food and agriculture corporations, such as contractfarming, became more widespread, determining agricultural prices on a national basis became more complicated. Secondly, especially in the 1980s, significant investment was made in communication and information technology that paralleled and were complementary to the processes whereby capital became globalized and national economies were deregulated. This connectedness strengthened the impact of globalization. The fact that some small towns and villages can remain vibrant settlements, the diminished desire to migrate to large cities, and the fact that types of economic activity and the means of income generation in villages have become more varied, all make us think that the incomes of rural populations are no longer mainly dependent on agricultural products and prices. We consider this chapter to be an attempt at putting on the agenda the question of how the described transformation should be analysed. In order to illustrate the hypotheses in this analysis, we would like to go over some observations and findings of researchers that parallel the account here. For instance, Sonmez (2001), based on a field study conducted in the Eastern Black Sea Region, where the basic agricultural activity is the traditional production of hazelnuts, states that a significant proportion of disposable income in a majority of households comes from non-agricultural work. According to Sonmez‘s findings, in parallel with the increased commoditization of livelihood needs and the expansion of consumption practices when electricity arrived in the early 1980s, many households had to diversify their agricultural activities and seek employment in non-agricultural domains (such as construction, trade, the service sector, public service, craftsmanship, and others). The paper also states that one member of at least one-fourth of all village households lived temporarily or permanently outside the village. Aydin (2001) also reached similar conclusions in a cottongrowing village in the Aegean region and a wheat-growing village in Central Anatolia in the 1990s; non-farming income-generating activities were increasingly on the rise and agricultural activities were diversifying. Boratav‘s (1995) relatively recent study on households in 19 villages also reaches conclusions similar to the rationale put forth by Aydin (2001), and argues that rural-to-urban migration should be acknowledged as a survival strategy, especially for the poor in rural areas. However, one needs to exercise caution when examining Boratav‘s conclusions on the decision to migrate. This is because, except for one, all the villages were located in Central Anatolia. Moreover, as described above and observed in a subsequent study encompassing 12 villages in the Aegean Region (Boratav and Sen, 1998), reasons underlying villagers‘ desire to migrate to cities reflect substantial regional differences. Erturk (1998) examined rural transformation and employment type in 14 villages, based on field studies conducted in the Western Black Sea Region (Samsun and Sinop), Central Anatolia (Corum), and Eastern Anatolia (Van). Erturk posits that manufacturers of small goods have had to diversify the ―resource base‖ and join the ―land-bound/mobile workforce‖ in order to deal with the economic hardships resulting from the globalization process from the 1980s and onwards. For instance, adult males in the Eastern Black Sea Region generally worked as temporary workers in trade, or in transportation and retail, in order to reach their

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income levels earlier earned from agriculture. The paper acknowledges that non-business income possibilities reflect inter-regional differences in distribution. This may be considered to vary depending on the level of integration with commodity and labor markets, and farming possibilities. Nonetheless, the paper argues that the ―land-bound/mobile‖ workforce has increasingly become a permanent feature of the Turkish rural sector from the 1980s onwards. It is possible to draw certain impression-based conclusions on rural income sources and social policies from these studies. Until recently, income policies geared to the rural population were based on agricultural activity. Both the rural population and the politicians said to serve this population targeted the pricing policies of agricultural products. In short, agricultural policies in Turkey subsidized agricultural inputs, and announced supportive prices for basic crops. The scope of this support both diversified and expanded over time. However, if the picture we have developed is correct, this would mean that agricultural prices (inputs and products) only partially impact village household incomes; in other words, it would be wrong to relegate the income of the rural sector only to income from agriculture. Consequently, state policies that aim to improve living standards in the rural sector and use only agricultural prices as a tool to this end reflect a discrepancy between means and ends. Instruments and policies that could have a much more direct influence in boosting rural incomes must be opened to debate. This hypothesis sheds new light on recent discussions in Turkey on agricultural subsidies. On one side of the debate are those who put forth familiar arguments based on farmers‘ low living standards. Cost analyses that back these arguments show that farmers would not be able to continue production without subsidized prices. As a result, it is argued that Turkey would have to import increasing volumes of agricultural products. On the other side of the argument are liberals who believe that taxpayers should not have to support farmers and pay high prices for food; they support liberalization. Our argument here is that the present discussion overlooks the real point. This is because the discussion is based on the assumption that farmers have no other source of income but agricultural production. The crucial point is that if farmers are indeed not completely dependent on these subsidized crops, even if cost calculations are done correctly, their quality of life will not fundamentally change based only on the continuance of the said policies or changes in support prices. We would like to refer to another issue at this point, which has not been much studied within the context of agriculture in Turkey. One conclusion we have reached from observation and various news stories is that, in Turkey, agricultural practices are shifting more and more to ―contract-farming‖ in a process being observed worldwide. Looking at deregulation, the merging of agriculture and industry, and the recent vertical integration and coordination trends in global agriculture, contract-farming practices are apparently becoming more widespread. The literature has reached a consensus that this organizational structure, which is based on contracts that include product price, input use and production conditions, attained a significant status after the 1970s, especially in certain industries (fruits and vegetables, flowers, organic products, products considered as inputs to the food industry, and so on) in peripheral countries (Little and Watts, 1994). While contract-farming has been practiced, albeit with limited scope (in products such as sugar beet, oil seeds and tomatoes for tomato paste) since the 1960s in Turkey, this organizational type has become more widespread in the last decade. It is very clear that this is closely related to the internationalization of agriculture and the food industry in Turkey (the role of McDonald‘s restaurants in the production of custom-grown potatoes may be recalled as a well-known

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example), and to the entry of foreign food corporations into the Turkish market. The state is also seen to be encouraging these practices in the name of modernizing agriculture. Foreign and domestic companies engaged in industries such as frozen fruit and vegetables, hybrid seeds, organic products, and livestock raising, increasingly rely on contract-farming due to concerns that include improving product quality, reaching standards, and transferring production risk to the producer to a large extent. As a result, the processes of price-setting for agricultural goods and inputs have become even more complicated. This appears to support what we have said above: in other words, it supports our argument that the direct impact of support policies on producer income has diminished.

THE DEMISE OF NATIONAL DEVELOPMENTALISM AND CHANGING POPULATION DYNAMICS Based on the above argument, we may now move to the second point: changes in population dynamics from rural to urban areas. It is argued here that the factors mentioned above—that village life is more acceptable now thanks to widespread comforts and the potential for diversity in income generation brought by communication and transportation technologies (see Chapter 16 by Sahlfeld)—have reversed the migration trend, especially in the villages in the western and southern regions of Turkey, towards maintaining the current population. While the populations in these diversified villages now have less reason to migrate to cities, there have even been instances of reverse migration to them. In fact, it may be argued that globalization (neo-liberalism, hard times and the strict enactment of legal frameworks in relation to market principles) has made urban conditions less tempting for potential migrants. The obliteration of populism and employment-based growth has brought poverty instead of the promised populism and integration to urban migrants. Consequently, not only does it make more economic sense to live in villages, but a number of previously nonexistent economic opportunities are now available. An examination of recent studies conducted on population movements in Turkey reveals findings that show the hypotheses we put forth are indeed worth investigating. At this point we should note that existing sources do not include direct evidence in connection with our arguments on population movements. However, we believe it is possible to interpret the existing data as indirect validation of the argument built up so far. Our theories, knowledge and predictions on migration, urbanization, and modernization are mostly based on an entrenched assumption: The rural is traditional, urban spaces are where modernity resides, and therefore migration is a ticket to modernization. The thought shaped within the framework of this analysis, or the assumption that modernization actually develops in urban areas open to technology and other modern amenities, whereas rural populations may only become part of this process by migration to cities, belongs to the old national developmentalist era. This assumption was largely valid during the historic transformation process that took place over the last two centuries in both central and peripheral nations. Especially during the post Second World War era in peripheral nations, economic and political policies shaped within the framework of this assumption are seen to form the backbone of modernization projects that aimed to transform all areas of social life. Industrialization, urbanization, agricultural modernization, reaching western standards in

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education and health; in short, modernizing the traditional in production, consumption, living, and thinking styles and values, were among the main objectives of the modernization projects of the period referred to as national development. To this end, transformation of villages and the villager mentality in ―third-world‖ countries, where the majority of the population lived in rural areas and worked in agriculture, constituted one of the fundamental policy areas. An examination of the sociological literature on agriculture and the villager mentality from the same period reveals that research topics parallel to the political agenda were popular. Within the context of the socio-psychological behaviorist perspective dominant in the rural sociology literature of the 1950s and 1960s, it may be said that agricultural modernization was the main issue, and to this end, primarily the expansion of agricultural technologies and their use, but also population planning, and the utilization of more advanced and efficient production methods, constituted the basic fields of research (Buttel, Larson and Gillespie, 1990). A critical evaluation of social relationships in agriculture remained outside theoretical frameworks of efforts undertaken within the context of this perspective, which was nourished by the modernization theories that marked the social sciences at the time. By the 1970s, largely as a reaction to the inadequacy of the modernization perspective and the failure of post-war rural development models, many researchers became more interested in issues such as the development of capitalism in agriculture, and social differentiation and class formation in the rural sector (see, for instance, Djurfeldt, 1982; Bernstein, 1988; Harrison, 1982; Mann and Dickinson, 1978). Fed by late nineteenth-century classic Marxist texts and discussions on agriculture and capitalist development (i.e. the ―agrarian problem‖), this vein of literature was interested in the perpetuation of family farms, expropriation of the peasantry, the relationship between the state and the rural population, rural property structures, and the technological transformation of agriculture (see, for instance, Harriss, 1982; Shanin, 1987). Many country-based studies, aiming to investigate the nature and possible evolution patterns of production relationships in agriculture, also contributed to the growth of such academic studies (see, for instance, Llambi, 1988; Friedman, 1980; Vergopoulos, 1978; Kahn, 1982; Keyder, 1983; de Janvry, Sadoulet and Young, 1989). Focusing resources earmarked for development in cities and thus establishing development in ―urban‖ centers was a decision shared by all developmentalist projects. This type of ―urban bias‖ contributed to the increased differentiation between villages and cities, the destination point of migrants, during the developmentalist era. Many academic studies conducted on urban development and migration from the 1970s onwards foresaw rapid urban growth in third-world countries (Kelley and Williamson, 1984). Many believed that as a result of the privilege and priority shown to cities and urbanization in economic development policies (Lipton, 1976), urban population would rapidly grow (see, for instance, Schiffer, 1989; Bairoch, 1988). However, recent studies have questioned the validity of this very widespread expectation. These studies reveal that urban populations in developing countries have grown slowly over the past few decades, and previous predictions of rapid population growth were exaggerated (Becker and Morrison, 1999; Satterthwaite, 1996). Consequently, the causes and types of population growth in recent years that had unexpectedly slowed down, had to be investigated—this was also vital in developing suitable policies geared to cities (Brockerhoff and Brenan, 1998). In one of the detailed studies on the subject, Brockerhoff (1999) says: ―the fact that net rural-to-urban migration in the last few decades was low is one of the basic demographic

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components of lower-than-expected urban growth‖ (p. 774). Brockerhoff argues that the basic factors underlying this development were actually connected to global economic transformations; the relatively slow growth of urban industry, and migration policies in developing countries. However, neither Brockerhoff nor other authors on the same topic (see, for instance, Becker, Hamer and Morrison, 1994; Becker and Morrison, 1999; Satterthwaite, 1996) considered extending their inquiry to changes occurring in the rural sector. In these studies, neither the transformation evidenced in the rural sector and the diversification of employment opportunities nor the parallel changes in the understanding, inspirations, and expectations of the rural population were seen as factors in explaining the new forms of migration and urban growth. In other words, instead of questioning the validity of long-embraced bipolar oppositions such as urban/rural, industrial/agricultural, and city/village, and thus problematizing the underlying model, they chose to focus solely on cities in their attempts to explain the gap between what was expected and what occurred. The hypothesis we put forth here is that the urban–rural gap has diminished as a result not only of the reduced attractiveness of urban spaces, but also, and perhaps primarily, because rural areas have become more livable. In other words, we emphasize not the ―attractiveness‖ of cities but the decreased ―unattractiveness‖ of villages. At this point, it would be useful to examine the social processes that have led to this situation. During the national developmentalist era, once a certain threshold was reached, the rural population began to be seen not only as producers to be exploited, but (within the context of strategies based on expanding the domestic market) as consumers as well. As incomes increased and local markets expanded, a parallel fundamental change was also evidenced in the consumption styles and patterns in villages. Albeit indirect, one of the most blatant indicators of this change, in Turkey in particular, is the increase in ownership of durable consumer goods (such as refrigerators or liquid petroleum gas canisters for cooking). Power and telephone lines reached all villages by the late 1980s; people began to correspond with their relatives in Germany via fax; village households gained the opportunity to watch national and international TV channels via dish antennae. After another five years, in 1995, cell phones became as common as satellite dishes. By the turn of the millennium, the Internet was taking a foothold in homes and internet cafes, and websites targeting village-resident agricultural producers flourished. Such changes in consumption pattern were made all the easier by the expansion of the transportation network. From many villages it became possible to reach a town or city center in less than half an hour, thanks to frequent minibus services. It became possible for village children to attend the town school through school bus services, and village residents enjoyed easier access to urban markets and other urban facilities. Talking about modernization in the various areas of social, cultural, and intellectual life by referring only to technology use and shifting consumption trends would obviously be crude. Still, it must be acknowledged that transportation and communication technologies and consumption-based cultural processes do play a certain role in changes to long-standing habits, beliefs, understandings, and the world of the imagination. As consumption habits are transformed and different technologies enter villages, the economic activities village residents engage in might also change. While only agriculture and a few non-agricultural pursuits were available about 20 years ago, the range of income-generating activities in villages has now expanded, thanks to contemporary transportation and information services. It might also be

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said that these villages increasingly become more like towns that incorporate a complex division of labor. However, it would be wrong to give the impression that all villages have integrated with the national network and diversified. Through an uneven process, some villages grew to include a wide-ranging economic base that boasts a diversified demographic profile, while others were abandoned, to lose their young population and economic base in stages. At this point, we would like to refer to a study conducted 25 years ago. In this study Keyder, Aksit and their colleagues examined Turkish villages in the early 1980s, and they defined a village type they considered vibrant and successful, where small farmers produced a variety of goods and engaged in diverse activities (Keyder, 1983). The households in such villages generated their income from a wide range of pursuits, from agricultural goods and livestock, trade and seasonal work. ―Diversified small commodity production‖ was the dominant production type in these villages. The transformation of the basic structure of the village and the accompanying prosperity also influenced population dynamics; population did not decline in these villages. Yet, especially in the Central and Eastern Anatolia Regions, there were villages that lost their economic viability within the context of their integration into the national economy. The population of such villages shrank as a result of migration and only the elderly population remained. The point we wish to make in this paper is that developments that may be summarized as globalization created the conditions for villages that retained their population, were successful in terms of demographic performance, and enriched and varied their economic base, to increase in number and emerge as the dominant village type--especially in Western and Southern Anatolia (and, to a less extent, in the Black Sea and GAP (Southeastern Anatolia Project) Regions). By contrast, at some social distance from these, there are villages of another type where income possibilities are dependent on the price of one or two (mostly subsidized) products, and which have lost and might still lose their population to migration. It may be argued that Central Anatolian villages, in their development to date, have already lost as much of their population as is possible to migration. In fact, the village in Central Anatolia in the study mentioned above lost its population rapidly since observations in the early 1980s, and not only has no more population to lose, but is indeed experiencing population growth. The reason for this unexpected demographic performance is that villagers who migrated in previous years returned to their villages following retirement, where their limited income would allow them a more comfortable life while not lacking the comforts of consumer durables, communication, and transportation. In other words, looking at Turkey‘s rural areas, it is possible to state that the potential to migrate exists almost solely in the Eastern and Southeastern Regions, while the demographic structure of Central Anatolia remains relative stagnant, and the villages of the Western and Southern Regions and on the coast and inner strip of the Aegean and Mediterranean Regions have prospered and modernized in situ, and thus may even experience population growth. In short, calling these settlements ―villages,‖ with all the connotations of this term, may not even be correct anymore. According to studies of the 2000 census (see, for instance, DIE, 1995; Shorter, 1995), urban population has grown steadily in the postwar era. While the size of urban population was one-fifth of the total population in the 1950s, this figure increased to 45.4 percent and 56.3 percent in 1980 and 1990, respectively. This development was the result of rural-tourban migration.

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However, according to the State Statistics Institute (DIE, 1995), population movements occurred not only from rural to urban areas, but also within each sector. After 1965, withinsector movement (i.e. rural-to-rural, urban-to-urban) took place more than rural-to-urban migration. There was significant reverse migration to rural areas as well. Moreover, all these developments occured despite a number of special accommodations that encouraged rural-tourban migration. As a result of the warlike conditions and forced migration policies in the Eastern and Southeastern Regions, several million people were transferred to urban areas in Turkey‘s other regions from the 1980s onwards. This forced move was responsible for the increase in the net rural-to-urban migration rate, especially during the 1990s. Despite this ―push‖ factor, the prediction for the proportion of urban population to the total population (70.6 percent) turned out to be an exaggeration (DPT, 1997; Kocaman, 1998). In fact, this proportion was not reached until 2007 and, according to the results of the 2000 census, the real figure was 65.1 percent. Based on this discrepancy, it would not be erroneous to say that in the last decade substantial indicators have emerged which reflect a slowing down of rural to urban migration. Obviously, the regional differences mentioned above must also be included in the equation. At this stage, we may underline two major trends. First,from 1975 to 1990, net migration flow (i.e. the difference between arriving and departing populations) was positive for the southern and western regions, and negative for the eastern, northern, and Central Anatolian regions (SSI, 1995; Kocaman, 1998). This trend continued in the 1990s. Secondly, the ratio of urban-to-urban migration to all population movements constantly increased from 1965 onwards (Ozbay and Yucel, 2001). Indeed, from 1985 to 1990, while 62 percent of total migration (5.5m people) occurred between urban spaces, rural-to-urban migration was only 18 percent of the total. Meanwhile, the real surprise was that urban-to-rural (reverse) migration reached 12.6 percent of total migration (Kocaman, 1998). This development may largely be explained by the fact that the ―rural population,‖ constantly on the move between urban and rural areas due to economic and social reasons, has significantly increased (Erturk, 1998; Bulutay, 1998). Ozbay and Yucel (2001) called this phenomenon ―shuttle migration,‖ and considered it to be the result of the increase in employment-driven temporary and seasonal migration to neighboring cities on the one hand, and the expansion of nonagricultural activities in rural areas on the other. Moreover, shuttle migration occurred more in the southern and western regions than in the rest of the country. This final point shows that there may be a relationship between the two trends summarized above: we may posit the hypothesis that the vibrancy of the villages in the southern and western regions is responsible for regional population trends. In other words, income-generating activities in the villages of the western and southern regions have increasingly diversified, which leads to migration in and out of these areas. There are also a number of population studies based on small-scale research conducted in the 1990s in various urban areas. Some of the findings of these studies relate to the research problem defined in this project. Using findings from two separate household studies conducted in 18 villages in Central Anatolia, and 13 in the Aegean region, Boratav and Sen (1998) concluded that the respondents from Central Anatolia were more eager to migrate to cities (40 percent in Central Anatolia; 26.8 percent in the Aegean Region). Moreover, they stated that the approach to migration did not vary with the differences between rural classes: in both regions, the rich who leased their land were as much driven to migrate as were poor

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households. However, it is striking to see that, in both cases, more than half the population is disinclined to abandon their villages and move to an urban area. Aksit and colleagues‘ work based on a study conducted in 47 villages in Southeastern Anatolia (Aksit, Mutlu, Nalbantoglu, Akcay and Sen 1996), might provide a more detailed perspective on the attitude to migration in rural areas. In their village sample, 57 percent of household heads said they preferred to live in a village and not a city. The principal reasons offered for their reluctance to move to a city were low employment possibilities and economic problems in cities. Even in the region where rural life and agriculture had suffered most damage due to civil war, people were of the opinion that the city had not much to offer them financially. Based on this finding, it can be said that people living in other rural areas may expect even less from urban migration in terms of employment opportunities. This state of affairs parallels our argument that people from villages are increasingly finding cities less attractive places to settle down.

A BRIEF REVIEW OF PARADIGMATIC SHIFTS IN THE LITERATURE ON RURAL TRANSFORMATIONS In this chapter we have discussed the socio-economic transformation trends of the rural sector in Turkey, and, attempted to highlight the importance of questioning and rethinking sociological categories such as village/city, rural/urban, and rural development. It must be underlined that the arguments we put forth are tentative. Consequently, one objective of this chapter may be seen as constructing a new research agenda for studies on agrarian structures. To this end, it would be meaningful to critically evaluate the existing literature on rural areas and the paradigmatic shifts this literature has gone through. Parallel to the economic and social transformation described above, rural sociology and political economy underwent substantial changes in the last few decades in terms of research fields and the dominant conceptual framework. While work on rural sociology focused on farm- and village-level dynamics and their impact on agrarian structures and development until the late 1980s, interest largely shifted to examining the different aspects of globalization in agriculture and food production after this time. Most of the sociological studies conducted in the last decade on agriculture and rural areas have focused on the worldwide restructuring of agriculture and the food industry (see especially Bonanno, Busch, Friedland, Gouveia and Mingione, 1994; McMichael, 1994; Goodman and Watts, 1997). These studies focus on the economic and political processes that caused the large transformation in global agriculture and the food industry in the early 1970s, and their outcomes in terms of international production and trade relationships. Food regimes, global agricultural commodity systems (chains or complexes), and the new international division of labor in agriculture are some of the conceptual frameworks employed to investigate issues such as the increasing impact of international finance organizations and regional trade agreements on the restructuring process of national agriculture; the dominant role that multinational corporations play in the organization of global agricultural input and product markets; and bio-technological advances and their outcomes (see, for instance, Friedland, 1994; McMichael, 1992; Marsden, 1992; Friedmann, 1991; Sanderson, 1986). In other words, many of these studies concentrate on

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global economic and political processes that take root outside the borders of a farm, or indeed a country. As opposed to the global literature on agricultural transformation, the sources (literature) and data pertaining to the rural sector in Turkey do not directly address our arguments. In the 1970s and 1980s, influenced by the expansion of sociological studies on the ―agrarian problem‖, and driven to explain the survival of small commodity production in rural Turkey, academicians and researchers opted to work on the nature of production relationships in rural areas, the structure of land ownership, and social differentiation (Aksit, 1988). Key issues investigated included agricultural policies; the commercialization process in agriculture; and commoditization, mechanization, and their impact on land intensification, types of labor control, and gender relationships. Case studies were conducted that examined the political, social, and economic dimensions of the agricultural structure at the village and farm levels, and regional differences (see Aksit, 1985; Keyder, 1983; Hann, 1990; Aydin, 1980; Sirman, 1987). The empirical and conceptual examination of rural dynamics and agrarian structures tied up a significant portion of the research agenda until the early 1990s. However, , village studies lost pace and almost came to a standstill since then. There are various reasons underlying this dramatic decline. On the one hand, post-structuralist approaches and related research fields (such as cultural studies) have gained in popularity, while modernizationist/Marxist paradigms seem to fail to generate new questions associated with agriculture and rural areas. On the other, the demise of the developmentalist state and the restructuring of the Turkish economy shifted attention away from the rural sector almost completely, towards the formulation of new research with an urban focus (Sirman, 2001). In many of the academic studies produced in the last decade on identity and culture, social movements, globalization, consumption and other similar issues, interest was largely on urban spaces. There were, however, a number of initiatives geared to understanding the transformation of agriculture and the food industry in Turkey following the 1980s, and locating these in a global historical context (see Tozanli, 1998; Yenal, 1999; Yenal and Yenal, 1993). Still, these studies were written from the perspectives of food regimes and the internationalization of agro-industry; and were not directly concerned with rural demographic processes, changes to socio-economic structures, or any regional differences. In parallel with the shift in conceptual framework and research areas of the rural sector and agriculture studies that occurred in the 1990s, the examination of the ―agrarian problem‖ through ethnographic studies that focused on villages and rural areas came to an end around the same time. The available secondary literature is either in the form of records such as anecdotes or newspaper articles (see Usumi, 1999; Yucel, 2001; Yetkin, 2001 and so on), or policy discussions based mainly on the analysis of official agricultural statistics (see Kasnakoglu, Cakmak and Akder, 1999; Oyan, 2001; Bulutay, 1998; Erturk, 1998; Boratav and Sen, 1998). There are some examples of pure speculation as well (see Altan, 2001). There are also a few ethnographic studies based on the examination of a single village. As we draw this relatively pessimistic picture, we are hopeful that new studies will take shape based on a new agenda; taking into account the transformations regarding production and migration decisions.

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CONCLUSION The above discussion may be summarized in the following propositions: Over the past two decades, substantial transformations have been taking place in the production and consumption styles in rural Turkey. While on the production side incomegenerating activities have diversified, advances in transportation and telecommunication have caused the rapid spreading of consumption practices; consequently, villages have begun to resemble extensions of urban areas. This trend is being experienced especially intensely and clearly on the coastal strip in the southern and western regions (see Chapter 5 by Cakmak and Dudu). As a result of the internationalization and deregulation trends in Turkish agriculture, the price, product, and production structure in rural areas has become much more complex and responsive to multiple factors than it was in the developmentalist era. In addition to these trends, structural change in the composition of the urban workforce and the resultant decrease in the capacity of urban centers to absorb newcomers have made cities potentially less attractive to rural populations (see Chapter 7 by Ilkkaracan and Tunali). The examination and testing of the arguments we assert will necessitate the rethinking of existing conceptual frameworks. This is because, as was noted above, while earlier literature on rural sociology prioritizes the understanding of farm-level dynamics and production relationships, and social-structural transformations in agriculture, the present-day literature focuses on explaining new transformations in the agro-food industry and relates these almost completely to global political and economic factors. While the earlier literature largely overlooked the external forces and processes that influenced agricultural dynamics and the role of international markets and global structures, latter-day literature focuses on the global arena, and undervalues the significance of the features internal to agriculture and complex village dynamics (Buttel, 1996). The point that must be highlighted here is the need for a unifying, but also critical, empirical, and conceptual approach that is nourished by both these intellectual orientations. Examining the inherent qualities and complexities of local and rural contexts without overlooking the impact of global currents, must be considered a priority for future research in rural sociology.

REFERENCES Aksit, B., Mutlu, K., Nalbantoglu, U., Akcay, A. & Sen, M. (1996). Population movements in Southeastern Anatolia: Some findings of an empirical research in 1993. New Perspectives on Turkey, Spring 14, 53–75. Aksit, B. (1985). Koy, Kasaba ve Kentlerde Toplumsal Degisme (Social Change in Villages, Towns and Cities). Ankara: Turhan Kitabevi. Aksit, B. (1988). Kirsal donusum ve koy arastirmalari (Rural transformation and village research). In S. Pamuk & Z. Toprak (Eds.), Turkiye’de Tarimsal Yapilar (Agricultural Structures in Turkey) (pp. 179-196). Ankara: Yurt Yayinlari.

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Altan, M. (2001). Koylu’ler Ne Zaman Manset Olur? (When Villagers Become the Headlines). Istanbul: Zaman Kitaplari. Aydin, Z. (1980). Aspects of rural underdevelopment in South Eastern Anatolia. Ph.D. Thesis. Durham University. Aydin, Z. (2001). Yapisal uyum politikalari ve kirsal alanda beka stratejilerinin ozellestirilmesi: Soke‘nin Tuzburgazi ve Sivrihisar‘in Kinik koyleri ornegi (Structural adjustment policies and the privatization of immortality strategies in rural areas: The cases of Tuzburgazi (Soke) and Kinik (Sivrihisar) villages). Toplum ve Bilim. Bahar 88, 11–32. Bairoch, P. (1988). Cities and Economic Development: From the dawn of history to the present. Chicago: University of Chicago Press. Becker, C. M. & Morrison, A. R. (1999). Urbanization in transforming economies. In P. Cheshire & E. S. Mills (Eds.), Handbook on Applied Urban Economics (pp. 1673–1790). New York: Oxford University Press. Becker, C. M., Hamer, A. M. & Morrison, A. R. (1994). Beyond Urban Bias in Africa: Urbanization in an era of structural adjustment. Portsmouth, NH: Heinemann. Bernstein, H. (1988). Notes on capital and peasantry. Review of African Political Economy, 10(77), 60-72. Bonanno, A., Busch, L., Friedland, W., Gouveia, L. & Mingione, E. (Eds.) (1994). From Columbus to ConAgra: The globalization of agriculture and food. Lawrence, KA: University Press of Kansas. Boratav, K. & Sen, M. (1998). Turkiye tariminda sosyal tabakalasma ve emek kullanim bicimleri: Bazi koy hane halki arastirmalarindaki bulgular uzerine bir degerlendirme (Social stratification and forms of labour uses in Turkish agriculture: An evaluation on some research conducted at village households). In T. Bulutay (Ed.), Turkiye’de Tarimsal Yapi ve Istihdam (Agricultural Structure and Employment in Turkey) (pp. 449–489). Ankara: Devlet Istatistik Enstitusu. Boratav, K. (1995). Istanbul ve Anadolu’dan Sinif Profilleri (Class Profiles from Istanbul and the Anatolia). Istanbul: Tarih Vakfi Yurt Yayinlari. Brockerhoff, M. & Brennan, E. (1998). The poverty of cities in developing regions. Population and Development Review, 24(l), 75–114. Brockerhoff, M. (1999). Urban growth in developing countries. Population and Development Review, 25(4), 757–778. Bulutay, T. (1998). Giris (introduction). In T. Bulutay (Ed.), Turkiye’de Tanmsal Yapi ve Istihdam (Agricultural Structure and Employment in Turkey) (pp. IX–3). Ankara: Devlet Istatistik Enstitusu. Buttel, F., Larson, O & Gillespie, G. (1990). The Sociology of Agriculture. New York: Greenwood Press. Buttel, F. (1996). Theoretical issues in global agro-food restructuring. In B. David, R. E. Rickson & G. Lawrence (Eds.), Globalization and Agro-food Restructuring: Perspectives from the Australia Region (pp. 17-44). Vermont: Avebury. De Janvry, A., Sadoulet, E. & Young, L. W. (1989). Land and labour in Latin American agriculture from the 1950s to the 1980s. Journal of Peasant Studie,. l6(3), 396-424. DIE (State Institute of Statistics) (1995). The Population of Turkey, 1923–1994, Demographic Structure and Development. Ankara.

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Djurfeldt, G. (1982). Classical discussions of capital and peasantry: A critique. In J. Harriss (Ed.), Rural Development: Theories of peasant economy and agrarian change (pp. 139– 160). London: Hutchinson University Library. DPT (State Planning Organization) (1997). Ekonomik ve Sosyal Gostergeler (1950–1997) (Economic and Social Indicators (1950-1997)). Ankara: Devlet Istatistik Enstitusu. Erturk, Y. (1998). Kirsal Turkiye‘de cemaat, gelenek ve degisme egilimleri (Communities, tradition and tendencies to change in rural Turkey). In T. Bulutay (Ed.), Turkiye’de Tarimsal Yapi ve Istihdam (Agricultural Structure and Employment in Turkey) (pp. 95– 123). Ankara: Devlet Istatistik Enstitusu. Friedland, W. (1994). The new globalization: The case of fresh produce. In A. Bonanno, L. Busch, W. Friedland, L. Gouveia & E. Mingione (Eds.), From Columbus to ConAgra: The globalization of agriculture and food (pp. 210-231). Lawrence, KA: University Press of Kansas. Friedmann, H. (1980). Household production and the national economy: Concept for the analysis of agrarian formations. Journal of Peasant Studie,. 7(2), 158-184. Friedmann, H. (1991). Changes in the international division of labor. In W. Friedland, Lawrence Busch, Frederick H. Buttel and Alan Rudy (Eds.), Towards a New Political Economy of Agriculture (pp. 65-93). Boulder: Westview Press. Goodman, D. & Watts, M. (Eds.) (1997). Globalising Food: Agrarian questions and global restructuring. London & New York: Routledge. Hann, C. (1990). Tea and the Domestication of the Turkish State. Huntingdon, UK: Eoten. Harrison, M. (1982). Chayanov‘s theory of peasant economy. In J. Harriss (Ed.), Rural Development: Theories of peasant economy and agrarian change (pp. 246–258). London: Hutchinson University Library. Harriss, J. (Ed.) (1982). Rural Development: Theories of peasant economy and agrarian change. London: Hutchinson University Library. Kahn, J. (1982). From peasants to commodity production in Southeast Asia. Bulletin of Concerned Asian Scholars, 14, 3-16. Kasnakoglu, H., Cakmak, E. & Akder, H. (1999). Tarim Politikalarinda Yeni Denge Arayislari ve Turkiye (Search for New Equilibria in Agricultural Policies and Turkey). Istanbul: TUSIAD. Kelley, A. C. & Williamson, J. (1984). Population growth, industrial revolutions and the urban transition. Population and Development Review, 10(3), 419–441. Keyder, C. (1983). Small peasant ownership in Turkey: Historical formation and present structure. Review 7(1), 53–107. Kocaman, T. (1998). Turkiye‘de ic gocler: Iller arasi kir-kent gocleri ve goc edenlerin nitelikleri (1965–1990) (Domestic Migration in Turkey: Characteristics of migrants and rural-urban migration between cities (1965-1990)). In T. Bulutay (Ed.), Turkiye’de Tarimsal Yapi ve Istihdam (Agricultural Structure and Employment in Turkey) (pp. 4595). Ankara: Devlet Istatistik Enstitusu. Lipton, M. (1976). Why Poor People Stay Poor: Urban bias in world development. Cambridge, MA: Harvard University Press. Little, P. & Watts, M. (1994). Introduction. In P. Little & M. Watts (Eds.), Living Under Contract: Contract farming and agrarian transformations in Sub-Saharan Africa (pp. 320). Wisconsin: University of Wisconsin Press.

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Llambi, L. (1988). Small modern farmers: Neither peasants nor fully fledged capitalists. Journal of Peasant Studies, 15(3), 350-372. Mann, S. A. & Dickinson, J. M. (1978). Obstacles to the development of a capitalist agriculture. Journal of Peasant Studies, 5(4), 466-481. Marsden, T. (1992). Exploring a rural sociology for the Fordist transition. Sociologia Ruralis, 32(213), 209–230. McMichael, P. (Ed.) (1994). The Global Restructuring of Agro-food Systems. Ithaca & London: Cornell University Press. McMichael, P. (1992). Tensions between national and international control of the world food order: Contours of a new food regime. Sociological Perspectives, 35(2), 343–365. Oyan, O. (2001). Tarimda yapisal uyarlama ve Turkiye‘nin cikarlari (Structural Adjustment in Agriculture and the Interests of Turkey). Iktisat Dergisi, Nisan 412, 28–41. Ozbay, F. & Yucel, B. (2001). Turkiye‘de goc hareketleri, devlet politikalari ve demografik yapi (Migration movements, state policies and demographic structure in Turkey). In F. Ozbay, B. Yucel, I. Sezal, A. Toros, H. Y. Civelek, S. Yener, I. Koç (Eds.), Nufus ve Kalkinma: Goc, Egitim, Demokrasi, Yasam Kalitesi (Population and Development: Migration, Education, Democracy, Life Quality) (pp. 69-95). Ankara: Hacetepe Nufus Etudleri Enstitusu. Sanderson, S. (1986). The Transformation of Mexican Agriculture: International structure and the politics of rural change. Princeton: Princeton University Press. Satterthwaite, D. (1996). The Scale and Nature of Urban Change in the South. London: International Institute for Environment and Development. Schiffer, R. L. (1989). The Exploding City: An unforgettable journey through nine great cities. New York: St. Martin‘s Press. Shanin, T (Ed.) (1987). Peasants and Peasant Societies. Oxford: Basic Blackwell. Shorter, C. F. (1995). The crisis of population knowledge in Turkey. New Perspectives on Turkey, Spring 12, l–31. Sirman-Eralp, N. (1987). Pamuk uretiminde aile isletmeleri (Family enterprises in cotton production). In S. Pamuk & Z. Toprak (Eds.), Turkiye’de Tarimsal Yapilar (pp. 209-232). Ankara: Yurt Yayinlari. Sirman, N. (2001). Sosyal bilimlerde gelismecilik ve koy calismalari (Developmantalism in social sciences and peasantry research). Toplum ve Bilim, Bahar 88, 251–255. Sonmez, A. (2001). Dogu Karadeniz Bolgesi findik uretim kusaginda toprak agaligi, koyluluk ve kirsal donusum (Land lords, peasantry and rural transformation in the hazelnuts production fields in East Black Sea). Toplum ve Bilim, Bahar 88, 69–105. Tozanli, S. (1998). Capital concentration among the food multinational enterprises and the development of the world‘s agro-food system. International Journal of Technology Management, 16(7), 695–710. Usumi, S. (1999). Yagma: Tutun ve Sigara Pazarlarimizda Vurgun (Plundering: Gravy in Our Tobacco and Cigarette Markets). Istanbul: Cagdas Yayinlari. Vergopoulos, K. (1978). Capitalism and peasant productivity. Journal of Peasant Studies, 5(4), 446-465. Yenal, D. & Yenal, Z. (1993). The changing world food order: The case of Turkey. New Perspectives on Turkey, Fall 9, 19–47.

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Yenal, N. Z. (1999). Food TNCs, intellectual property investments and post-Fordist consumption: The case of Unilever and Nestle in Turkey. International Journal of Sociology of Agriculture and Food, 8, 21–35. Yetkin, I (2001). Tarimin yeniden yapilanmasi ustune (On the restructuring of agriculture in Turkey), Iktisat Dergisi, April 412, 27. Yucel, F. (2001). The movie: Anlatamadim. Ankara.

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 3

MODERNIZATION, GLOBALIZATION AND DEVELOPMENT: THE STATE PROBLEM IN TURKEY E. Fuat Keyman Department of International Relations, Koc University, Turkey

ABSTRACT Relying on the analytical distinction drawn by both Joel Migdal and Nicos Poulantzas in their own groundbreaking works on the state, between the idea/type and the reality/form of the state, this chapter employs an understanding of the state as both a ―complex institutional ensemble with its own modes of calculation and operational procedures‖ and a ―site where the specific material condensation of power and domination relations among political forces and classes take place,‖ and applies it to the case of Turkey. In doing so, it suggests that while the strong-state tradition constitutes the idea, rheoteric or type of the state in Turkish modernity, the practice, reality or form of the state has been differential and open to remodifications in accordance with the specific condensation of political forces and classes. In substantiating this argument, the chapter will first provide an account of the strong-state tradition in Turkey, and secondly analyze the differential practices and transformations of the state in the process of continuity and change that Turkish modernity has been undergoing since the late Ottoman times, but especially since the decleration of Turkey as an independent nation-state in 1923. In exploring the differential practices and transformations of the state in the process of continuity and change in Turkish modernity, the chapter will also provide a brief account of the role of the state in agriculture at each stage and phase of capitalism and modernity.

INTRODUCTION In his groundbreaking work on ―studying the state,‖ Joel Migdal proposes what he calls ―the state-in-society approach,‖ which views the state as a field of power marked by the use and threat of violence and shaped by (1) the image of a coherent, controlling organization in a territory, which is a

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E. Fuat Keyman representation of the people bounded by that territory, and (2) the actual practises of its parts. (Migdal, 2001: 15–16)

―Actual states,‖ as Migdal‘s proposal implies, ―are shaped by two elements, image and practices.‖ Moreover, these elements ―can be overlapping and reinforcing, contradictory and mutually destructive.‖ The image of the state has tended to be homologous from state to state, especially the image of the modern state that has its origins in the fifteenth through seventeenth centuries in northwest Europe and came to encompass the entire globe in the last half of the twentieth century. Conversely, practices have tended to be diverse, and, while there are certainly recognizable comparative patterns, they have defied neat categorization. (Migdal, 2001: 16) For Migdal, the image of the state as coherent and homologous is constructed through the establishment of ―two sorts of boundaries‖: ―territorial boundaries between the state and other states,‖ and social boundaries between the state and its (public) actors and agencies and those subject to its rule (private). These boundaries, while functioning to separate the state from other states and social forces, also contribute to the creation of the image of the state as a coherent and homologous entity. On the other hand, the practices that the state actors and agencies perform in the process of governing tend to be multi-dimensional, multiplex, diverse, and even contradictory, in that they may ―reinforce or weaken‖ the image of the state, and that they are open to changes, modifications and re-descriptions (Migdal, 2001: 17–18). Migdal goes on to suggest that even though, in studying the state, it is important and useful to take into account the image and rhetoric of the state, it is necessary to shift the focus to the ―reality of the state‖ and explore the actual practices that the state performs in its governing of society; practices that constitute ―the web of relationships‖ between state and its society (Migdal, 2001: 235). Of course, Migdal‘s innovative approach to the state has its roots in the Weberian tradition of the state as an actor whose power cannot be reduced to class power. Yet Migdal aims to go beyond this tradition by locating the state-in-society and promoting a relational and process-based understanding of the state. The analytical separation Migdal draws between the image and rhetoric of the state and its practice and reality is of the utmost importance in advancing our understanding and study of the state. Another groundbreaking work on studying the state has been provided by Nicos Poulantzas and his neo-Marxist theory of the capitalist state (Poulantzas, 1978). Similar to Migdal‘s distinction between the image and rhetoric of the state and the practice and reality of it, the distinction made by Poulantzas is between an abstract view of the state, which approaches it at the level of the concept of the ―mode of production‖ and produces a theory of its ―type,‖ on the one hand, and the reality and ―concrete form of the state,‖ which analyzes the state in the ―social formation‖ in which it is embedded, on the other. ―A theory of the capitalist state,‖ as Poulantzas suggests, cannot construct its object if reference is made only to the relations of production, and if class struggle in the social formations intervenes merely as a factor of variation whereby an ideo-typical State takes shape in a given concrete State. Although such a theory cannot trace the genealogy of the capitalist state, it

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nevertheless becomes possible only if it accounts for the historical reproduction of that State: the forms corresponding to the various stages or phases of capitalism (liberal State, interventionist State, … authoritarian statism), the exceptional forms of State (fascism, military dictatorship, Bonapartism), as well as the forms assumed by the diverse regimes. A theory of the capitalist State must be able to elucidate the metamorphoses of its object. (Poulantzas, 1978:123) According to Poulantzas, the key to understanding the state in its varying concrete forms is ―the class struggle, and especially political struggle and domination … inscribed in the institutional structure of the State,‖ and in this sense, ―the differential forms and historical transformations of the State‖ should be explained not only with reference to the abstract theory of the capitalist state in the mode of production, but by locating the state-in-social formation (or in society). The distinction between the type and the form of the state enables Poulantzas to argue that ―the State is not purely and simply a relationship, or the condensation of a relationship; it is the specific material condensation of a relationship of forces among classes and class fractions‖ (Poulantzas, 1978: 129). Whether one accepts Migdal‘s neo-Weberian call for the need to make a distinction between the idea and rhetoric and the practice and reality of the state, or Poulantzas‘s neoMarxist call for a need to distinguish the type and the form of the state, the common denominator between them is their attempt to analyze the state in its concrete and differential forms and practices, and by doing so, to go beyond the level of abstraction (what the state is) and focus on the question of what the state does to govern the society and how governance is constructed. What is significant in Migdal‘s and Poulantzas‘s analysis of the state in modern capitalist society is the special emphasis they place on the ―how‖ question—that is, the question of how the state governs—and in developing their answers, their theoretical and empirical explorations of the ways in which the concrete and differential practices of the state are constructed institutionally, discursively through the specific material condensation of power and domination relations among political or social forces and classes. Reading Migdal‘s and Poulantzas‘s studies of the state, one could obtain a useful and adequate understanding of the state as both a ―complex institutional ensemble with its own modes of calculation and operational procedures and a site where the specific material condensation of power and domination relations among political forces and classes take place‖ (Jessop, 1990:366). In this chapter, I will apply these crucial methodological points about how to study the state to the case of Turkey, and attempt to provide a brief analysis of the history of contemporary Turkey from the perspective of the state and its pivotal and sovereign role in modernity. From its inception in 1923 to the present, Turkish modernity is a state-centered modernity. The state has always played an effective, sometimes constituting role in the processes of political, economic and cultural modernization, in the top-down transformation of society into a modern, secular and culturally homogenous society, and in the construction and implementation of national developmentalism. It is true that the pivotal and sovereign role of the state in modernity has given rise to the emergence and endurance of what has come to be known as ―the strong-state tradition‖ that has shaped and framed the history of modern Turkey (see Heper, 1985). The strong-state tradition still continues to do so. However, it is equally true that the role of the state has never been static, unchanging, coherent and unchallenged. In fact, it has been dynamic, open to changes and transformations,

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and beset by contradictions and antogonisms. The argument that I will be developing in this chapter is that while the strong-state tradition constitutes the idea, rhetoric or type of the state in Turkish modernity, the practice, reality or form of the state has been differential and open to remodifications in accordance with the specific condensation of political forces and classes. The state and its roles in Turkish modernity have undergone important modifications according to ―the stage and phase of capitalism‖ that has made up ―the basic periodization of the State; and it also varies with the precise form and regime assumed by the State.‖ The specific power configurations and the material condensation of political forces and classes have been ―therefore simultaneously present in transformations of the State corresponding to the stages and phases of capitalism‖ and modernity (Poulantzas, 1978:123–124). In substantiating this argument, I will first provide an account of the strong-state tradition in Turkey; and secondly, analyze the differential practices and transformations of the state in the process of continuity and change that Turkish modernity has been undergoing since the late Ottoman times, but especially since the declaration of Turkey as an independent nation-state in 1923. Given that the focus of this book is the question of ―agriculture in Turkish economy,‖ I will also provide a brief account of the differential roles of the state in agriculture in each stage and phase of capitalism and modernity in Turkey. Finally, by way of conclusion, I will put forward a number of suggestions necessary to transform the strong-state tradition into one that contributes to a democratic, just, and good governance of Turkey.

THE STATE IN TURKISH MODERNITY A quick glance at the process of ―the making of modern Turkey‖ reveals the fact that the declaration of the republic of Turkey as an independent nation-state in 1923 brought about a rupture with the Ottoman past and signaled the state-centric and top-down transformation of what was regarded as a backward traditional society into a modern nation. In fact, in attempting to present itself as a radical break with the Ottoman past, the republic employed a set of significant ―concepts and doctrines such as progress, laicism, nationalism, Comtean positivism and solidarism,‖ owed a lot ―to the Enlightenment, the French Revolution and nineteenth-century scientism,‖ and aimed as ―its ultimate consequence to create a modern Turkish state‖ (Kazancigil, 1981:37). The creation of modern Turkey in this sense was a modern nation-building process, in which the state was to act as the sovereign and dominant agent of modernity. The motto of the republican state elite was to reach the level of ―Western civilization‖ by installing an independent nation-state, fostering industrialization, and constructing a secular and modern national identity, and this goal was derived to a large extent from the desire to save the state and secure its existence. For the republican state elite, modernity as the will to civilization was not simply a local project of economic or political modernization. Nor was it based essentially upon an attempt to create a national identity for Turkey. It was a more complex and at the same time more ambiguous project, aiming to achieve a top-down and state-based transformation of a traditional society into a modern nation by introducing and disseminating Western reason and rationality. In this context, according to Serif Mardin, the project of modernity involved the conceptualization of the Turkish Republic as a nation-state and required a set of transitions, including: (i) the transition of political authority from personal rule to impersonal rules and

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regulations, that is, the rule of law; (ii) the shift from divine law as the explanation for the order of the universe to positivist and rational thinking; (iii) the shift from a community founded upon the ―elite–people cleavage‖ to a political community; and (iv) the transition from a religious community to a nation-state (Mardin, 2006:38). It is in this context that the republican state elite attempted to remove from political discourse the notion of an Islamic state, the existence of which was regarded as the main cause of the perpetuation of the backwardness of Turkey. Thus, the foundation of a modern nation-state was seen by the state elite as the key element of the will to civilization, and it is through the state-centric and topdown transformation of society that modern Turkey could thus possess secularity and rationality, employ Reason to initiate progress, and establish a modern industrial economy, thereby fostering the processes of industrialization and modernization. In a Weberian fashion, it was considered that the purpose of political power was to ―carry out a social and economic revolution without which the political revolution would dissipate‖ (Ahmad, 1993:72). This means that for the Kemalist elite political power was ―not reducible but interrelated to the economic.‖ The rationalization of the political and the rationalization of the economic were seen to be relational processes whose reproduction could be made possible through the construction of a national identity as a modern rational self. In this respect, the Kemalist will to civilization was based upon an articulation of modernity (Reason) and capitalism (Capital) into Turkish society through the construction of a modern nation-state. Moreover, the idea of the state in the mind of Ataturk and his followers was by no means abstract: rather it was a reaction to two aspects of the Ottoman state, which they identified as key to the Empire‘s decline. Because the Ottoman state was identified with the personal rule of the sultan, eventually it was unable to compete within the European state system, which was organized on the basis of legal–rational authority (Heper, 1985). Secondly, the Islamic basis of the Ottoman state was seen as the primary obstacle to progress in Ottoman society, insofar as modernization required the regulation of state–society relations through the nationstate. Therefore, the republican elite sought to create a state distinct from the person of the sultan and secular enough to reduce Islam to the realm of individual faith. For them, the state had to involve commitment to political modernity, meaning that the link between the modernization of the polity and that of society had to be established by the state. It is for this reason that the republican elite initiated reforms, imposed from above to enlighten the people and help them make progress. These reforms were designed to equate the national will with the general will, and included the principles of republicanism, nationalism, étatism, secularism, populism and revolutionism (or reformism from above). However, the programme of rapid modernization carried out by the state elite, and their attempt to achieve a top-down transformation of society in such a way as to make it modern, secular and civilized, was beset by contradictions and challenges. In fact, from its inception, Turkish modernity has always been subject to societal challenges and conflicts. For Resat Kasaba, the history of modern Turkey has been framed by what he calls a ―bifurcated programme of modernization consisting of an institutional and a popular component which, far from being in agreement, have been conflicting and undermining each other. The bureaucratic and military elite that has controlled Turkey‘s institutional modernisation for much of this history insists that Turkey cannot be modern unless Turks uniformly subscribe a same set of rigidly defined ideals that are derived from European history, and they have done

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E. Fuat Keyman their best to create new institutions and fit the people of Turkey into their model of nationhood. In the mean time, Turkey has been subject to world-historical processes of modernisation, characterized by the expansion of capitalist relations, industrialisation, urbanisation and individuation as well as the formation of nation-states and the notions of civil, human, and economic rights. These have altered people‘s lives and created new and diverse groups and ways of living that are vastly different from the blueprint of modernity that had been held up by the elite. Hence, Turkey‘s modernisation in the past century has created a disjuncture where state power and social forces have been pushed apart, and the civilian and military elite that controlled the state has insisted on having the upper hand in shaping the direction and pace of Turkey‘s modernisation. (Kasaba, 2007:2).

Kasaba‘s accurate account of the internal paradox of Turkish modernity, stemming from its bifurcated nature and giving rise to a disjuncture between state power and social forces, concurs with Migdal‘s and Poulantzas‘s analysis of the state that differentiates the idea and type of the state from its practice, form and reality, and that sees the state both as a complex institutional ensemble and as a site of condensation of power and domination relations among political forces and classes. In fact, Kasaba‘s account implies that in the bifurcated nature of Turkish modernity, while the state-centricism constitutes a strong-state tradition as the idea or rhetoric of the state, the practice of the state has been complex and differential, and its power has been subject to challenges and negotiations by political forces and classes of worldhistorical processes of change and transformation, giving rise to different forms and regimes of the state, corresponding to different faces of capitalism and modernity. In other words, although it is true that Turkey is an illustrative example of strong-state tradition, meaning that the state is the dominant and sovereign actor taking its place at the center of politics, polity and public policy—the state in Turkish modernity is a ―hegemonic state‖ whose sovereignty is ―highly developed and unalloyed,‖ and assuming ―a pervasive role in virtually all aspects of Turkish life‖ (Larrabee and Lesser, 2003:20–22)—it should also be pointed out that the idea of the strong state does not necessarily mean an effective, efficient and democratic one. Nor does it imply a static and unchanging state whose power endures without a challenge. On the contrary, as Turkish modernity has unfolded, the strong state tradition has been challenged by political forces and classes from many directions, both internally and externally, as a result of which significant changes and transformations have occurred and paved the way to the emergence phases of capitalism and modernity. I have explored these phases elsewhere and have suggested that although the process of the making of modern Turkey as a nation-building process still continues today, it has nevertheless undergone and involved a number of significant ruptures (see Keyman, 2008a). The first rupture was the transition to parliamentary democracy in 1945–1950, and since then Turkey‘s modernization has entailed a significant reference to the question of democratization. Despite frequent regime breakdowns and significant democracy deficits, the history of modern Turkey has been, and today remains as, a process of modernization with democratization since 1950. Turkey‘s exposure to globalization occurred in the 1980s, primarily in the area of the economy, but also in culture and politics. Since then, globalization has constituted the worldhistorical context of the transformation process of Turkey, as it has brought into existence the squeeze of ―the national,‖ i.e. the nation-state, national economy, and national identity, between the global forces and local dynamics. The discourses of minimal effective state, free-

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market rationality, and identity/difference have gained power and popularity, and increasingly become the focus of politics. Globalization has generated significant and system-transforming impacts on politics, the economy and identity in Turkey, and it has become impossible to understand and govern the country without reference to globalization. Thus, since the 1980s, and especially since the 1990s, the process of modernization has involved globalization, and acted as modernization with democratization and globalization. In the year 2000, Turkey faced a new rupture as the country was granted candidate status for the full membership of the EU by the European Council at the Helsinki Summit of December, 1999. This decision also led to the deepening of Turkey‘s European transformation, as it demanded that Turkey should initiate a democratic and constitutional reform process to further and upgrade its democracy. Since 2000, Turkey has been undergoing a process of European transformation, covering almost all the areas of the governing structure and the state–society/individual interactions. Since October 3, 2005, Turkey–EU relations have been taking place in the form of ―full accession negotiations,‖ and, despite the existing problems of uncertainty and lack of trust, the process of transformation of Turkey has had a strong and effective ―EU-anchor.‖ Two points can be extrapolated from this brief account of the history of modern Turkey. The first is that the process of its making is an ongoing, multi-dimensional, multiplex and complex one, insofar as it involves: (i) 1923 to the present: the process of modernization; (ii) 1950 to the present: the process of democratization; (iii) 1980 to the present: the process of globalization; (iv) 2000 to the present: the process of Europeanization. It can be suggested, in this sense, that the present nature of Turkey is characterized by the simultaneous and intertwined existence of all four of these processes—modernization, democratization, globalization, and Europeanization—as well as their impacts on the economy, politics, and identity. These processes and their impacts, which together constitute Turkey‘s transformation into a much more ―complex society,‖ require an attempt to go beyond the bifurcated programme of modernization, an attempt to fill the disjuncture between state power and social forces, and a call for flexible, pragmatic and reform-oriented governance. In other words, the present nature of Turkey, in Ulrich Beck‘s terminology, cannot be reduced to a social formation of ―simple modernity‖; instead, we can talk about a ―reflexive modernity‖ whose context is no longer national, but also global and regional, and in which social transformation has multi-dimensional sources and multiplex structure, as well as multi-causal and simultaneously existing relations (see Beck, 2000 and Beck, 2006). Moreover, and secondly, this complex sociology of Turkey has been complicated further by the multiplication of political cleavages as a result of the multi-dimensional process of transformation. Since 1923, throughout the process of transformation of Turkey, a number of political cleavages, each corresponding to the different dimensions of modernization, have occurred. These political cleavages can be listed and categorized in the following way: (i) 1923 to the present: the centre–periphery cleavage; (ii) 1950 to the present: the left–right cleavage; (iii) 1980 to the present: the global–national cleavage; (iv) 2000 to the present: the identity–citizenship cleavage.

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The present nature of Turkish politics contains in itself all these cleavages, simultaneously and in an intertwined fashion. Together they require an understanding of Turkey as a complex society whose good and just governance entails an attempt to cope with all of these cleavages at the same time. This means that today the question of governing Turkey should be posed, more precisely, as that of ―governing a complex‖ society, going through the processes of modernization, democratization, globalization and Europeanization, bringing about complex challenges, risks, but also possibilities, emerging from within the centre–periphery, left–right, global–national and identity–citizenship cleavages. In what follows, I will provide a brief account of each phase and the practice, form and reality of the state in it, especially within the context of the role of the state in economic development concerning the problem of agriculture.

THE ARRIVAL AT MODERNITY: 1923–1945 TO THE PRESENT As noted, since its inception in 1923, Turkish modernity has operated as a ―state-centric modernity.‖ In this mode of operation, there are five epistemic and normative parameters, which give meaning to its state-centric character, as well as the endurance of it from 1923 to the present. First, there is a ―strong-state tradition‖ that brings about an understanding of modernity in which the state plays the dominant and sovereign role in various ways in the production and reproduction of societal affairs as a whole. The state in Turkish modernity has acted as the privileged and sovereign subject, operating almost completely independently from society and assuming the capacity of transforming society from above. In this process, it has been the state, not government, that constituted the primary context of politics, defined the boundaries of it, and decided who can or cannot participate in it. In doing so, the state was the basic site at which national interest was formulated by the state elite in such a way that it was identified as state interest. Thus, the strong-state tradition meant a state-centric way of governing society from above by assuming a unity between state and nation, as well as between national interest and state interest (Keyman, 2008b). Secondly, in the course of Turkish modernity, national developmentalism functioned as one of the main ideologies, which, in its anti-liberal and state-centric modes of operation, involved a ―planned, import-substituting industrialization‖ as the ―proper prescription for development‖ (Keyder, 1997:40). National developmentalism was the ideology for rapid modernization and industrialization, as well as the basic vehicle for the top-down transformation of society into a modern, industrial, civilized totality. In this transformation, national developmentalism ensured and secured the role of the state as a dominant economic actor whose basic aim was to regulate the economy in such a way that the rapid economic modernization of what was regarded by the Kemalist elite as a backward society could be achieved. In doing so, the state acted as the developmental state, controlling and directing the economy, as well as taking substantial decisions for the regulation of economic activities for industrialization. In this context, the state in its national developmentalist intervention into society assumed potential autonomy, and the administrative capacity of having no transparency and accountability to society. In this sense, one could argue that whereas the strong state corresponds to the idea or type of the Turkish state, the national developmentalist state refers to the reality or form of the state.

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The strong state and national developmentalism together established the institutional foundation of the state-centric Turkish modernity. However, there was still a need to create a sociological ground for modernity to be carried out by social actors. In the minds of the Kemalist elite, modernity and its rapid implementation into social relations required a specific and unified societal vision that is neither individualistic nor class based. Instead, what was needed was an organic vision of society that defines society not with reference to such categories as class or individual but on the basis of the ―duties and services‖ of different occupation groups to the state in particular, and for modernization and civilization in general. Thus, in its attempt to modernize Turkey, the Kemalist elite did not approach its society in terms of individual rights and freedoms, nor did it see society as containing individualism, pluralism, participation and claims to difference. Instead, society had to be organic, meaning that societal affairs were organized in a homogenous and monolithic way to serve for the national interest, that is, for the making of Turkey as a civilized and modern nation. However, the important and pressing question for the Kemalist elite here was the following: in governing society through the ideologies of national developmentalism and organic society, how could the state activate the masses towards modernity? The solution to the problem of how to activate national identity in the process of rapid modernization lay in the republican model of citizenship, which, while giving the masses political rights, demanded at the same time that they had to accord normative primacy to national interest over individual freedoms, duties over rights, and state sovereignty over individual autonomy. Thus, the making of modern Turkey involved the transformation of the masses into citizens, but prevented the language of rights from entering into the process of the construction of secular national identity. For the Kemalist elite, citizenship was not a liberal category framed by the language of rights, but referred to a morally loaded category aiming at creating a secular and rational national identity compatible with the project of modernity as civilization. In this way, the republican model of citizenship serves for the state, first as a ―link‖ between the state and society on the basis of the principle of national unity, second as an ―articulatory principle‖ that connects people with different religious, ethnic and cultural origins under the rubric of modernity as civilization, and third as an effective ideological device by which the state had attempted to disseminate its will towards civilization throughout society in such a way as to create it. The strong-state tradition, national developmentalism, the organic vision of society and the republican model of citizenship together established the foundational basis for the statecentric mode of operation of Turkish modernity. This state-centric mode defined the early republican period, consolidated itself as hegemonic, and stamped its print in every aspect of state–society interactions. In consolidating its hegemony, it brought about the center– periphery cleavage as the organizing principle of Turkish politics, giving rise to the distinction between state and society on the one hand, and between the modern, secular, Western center and the underdeveloped, uneducated, traditional periphery that needs to be transformed and developed by the state on the other. One of the important manifestations of the state-centric Turkish modernity was the area of the economy, and the need for rapid economic modernization and industrialization. In accordance with the international economic outlook at the beginning of the 1920s, during which the Turkish Republic was founded, the period between 1923 and 1932 witnessed the implementation of rather liberal policies (see Jacoby, 2008). There is no doubt that decisions and strategies agreed upon at the Economic Congress in 1923 in Izmir were critically

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influential and compatible with the dynamics of the world economy. Later, the Great Depression of 1929 was a critical turning point in the sense that, from this point onwards, the level and intensity of state intervention increased tremendously. The nature of state intervention could be best described by the implementation of protective measures to sustain cohesion in the national realm. During the 1920s the weight of agriculture in Turkey‘s GDP was approximately 43 percent (see Figure I) and, for this reason, state intervention in this sector was seen as extremely critical in order to preserve the functioning of the economy. In a way, this was the ―only‖ and ―fastest‖ way to foster economic development and provide employment. Protective measures were widespread: minimum pricing, direct purchases by the state to support the producers, input subsidies and easing credit conditions have been the most popular tools for state support. Output price supports were the most widely used agricultural policy instrument in Turkey.

Source: Eruygur (2006). Figure I. Share of Agriculture in total GDP (1923–2005).

All of these measures were implemented under the state policy and ideology of national developmentalism, paving the way towards the hegemony of the strong state. They were also possible under the single-party regime. However, after the Second World War, when the international context had been transformed into a liberal world economy, going hand in hand with the discourse of democratization and national developmentalism, Turkey began to modify its strong-state tradition by accepting societal demands, mainly coming from ruraldominant classes, both for creating a space for market liberalization and for the transition to democracy. Turkey made its transition to democracy in 1945, experienced market liberalization during the 1950s, and then consolidated its national developmentalism through what is called the import-substitution industrialization and planned economy (see the Introduction in Aydin, 2005). In this sense, the period between 1945 and 1980 was a very important rupture in Turkish modernity and the strong state tradition, as it led to the transition to democracy in which a short phase of market liberalization was experienced, and, more

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importantly, the transformation and articulation of national developmentalism into import substitution industrialization occurred.

THE TRANSITION TO DEMOCRACY: 1945–1980 It has to be noted, however, that even though Turkey had achieved the transformation of its single-party political system into a multi-party parliamentary democracy in a peaceful transition after the Second World War, it was not until the 1980s, and especially during the 1990s, that the hegemony of the state-centric mode of societal modernization was challenged. This statement does not underestimate the importance of the transition to democracy in modern Turkey. In fact, unlike that of the Latin American and southern European countries, where the transition from authoritarianism to democracy was realized through a ―rupture‖ with the old regime, Turkey‘s experience involved a peaceful transition with a movement of ―reform‖ in the single-party political system (Ozbudun, 2000:13–14). It is for this reason that, as has been argued by many, since its inception in 1950 parliamentary democracy has persisted and has remained an accepted and dominant ―political norm of governance,‖ even though it has faced three regime breakdowns (in 1960, 1971, and 1980). Moreover, the transition to democracy gave rise to the emergence of the left–right cleavage in Turkish politics, which has remained one of the significant cleavages up to the present. As Turkish politics was making its transition to democracy, national developmentalism was being organized as an import-substitution-based industrialization, and the international context was being increasingly framed by the 1968 student movements and the discourses of justice and freedom, the left in Turkey found a suitable platform for its emergence and functioning as one of the main axes of Turkish politics (Sunar, 2004). It should be pointed out that the transition to democracy did not rely on societal forces and democratic struggle, and nor did it activate cultural modernization. It remained ephemeral, accepted the hegemony of state-centric modernity, and has become vulnerable to regime breakdowns. The power and dominance of state-centric modernity were seen in the area of national developmentalism too. In fact, the policies in this period did not change much from those of the heavily statist, protective period; the five-year national development plans became the institutional form and context for the implementation of similar kinds of policies. Output price supports continued to be the most comprehensive tool for supporting the agricultural sector. Moreover, during the 1960s, incentives for chemical fertilizers became a new support instrument. Accordingly, the credits provided to the agricultural sector were set relatively lower than the market rates. As Zulkuf Aydin has caricatured bluntly, 1950 marked the beginning of a specific integration of the Turkish economy into the world markets, which assigned Turkey to producing raw materials (see Chapter 2 in Aydin, 2005). Another crucial development in this period was the importation of large numbers of tractors through the Marshall Aid Plan. Increasing mechanization not only enabled intensive farming, but also enabled farming of uncultivated areas for agricultural production. During the planned period starting during the 1960s there were multiple objectives assigned to the agricultural policies such as price stability, increasing productivity, quality enhancement and competitiveness. In general, as stated by Aydin, ―the modernization of the agricultural sector through the state policies,

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including the Green Revolution, credit and input schemes, integrated area development programmes have been influential. Through the impositions and recommendations of the World Bank, Turkey implemented policies that favored small-scale agriculture‖ (Aydin, 2005:190–196). Due to increasing modernization, Turkey experienced an increase in productivity. While this was the case for the agricultural sector, the same arena was also seen as a black box by the state in Aydin‘s terms. The state promoted the interests of the peasantry through a variety of instruments, but also appropriated surpluses through the control of the market and prices. In broader terms, the 1950–1980 era was beneficial for the peasantry since political parties sought to build alliances and the rural population received significant welfare gains (Aydin, 2005:234). In this era, while the idea of the strong state remained, the form of the state was remodified as a developmentalist state constituting an institutional basis for state-centric modernization and a site where, in addition to the center–periphery cleavage, the left–right cleavage was introduced in Turkish politics, and framed the way in which the condensation of political and social forces and classes occurred in relation to economic power and interest. Until the 1980 military coup, and Turkey‘s exposure to the global economy, state-centric modernization and national developmentalism maintained its hegemony in Turkish politics and its economy.

THE EXPOSURE TO GLOBALIZATION: 1980 TO THE PRESENT In the 1980s, and especially during the 1990s, Turkish modernity, its state-centric governing of society from above, and its national developmental ideology faced a serious legitimacy and representational crisis. A number of important changes and transformations gave rise to this crisis. First, in parallel to the changes in the world economy during the 1980s, framed to a large extent by the emergence and then the consolidation of the neoliberal discourse of free market rationality, the ideology of national developmentalism became untenable (see Chapter 2 by Keyder and Yenal). The replacement of import-substitution industrialization with export-promotion industrialization in the 1980s, and then the increasing exposure of the Turkish economy to economic globalization, especially in the 1990s, together reduced significantly the power and legitimacy of national developmentalism as an effective ideological device of the strong state to dictate the rules of the economic sphere in its regulation of the economy. On the contrary, since the 1980s, the Turkish economy has been framed by free-market-based economic rationality. Rather than national developmentalism, the regulation of state–economy relations has become increasingly dictated by the neoliberal discourse of individualism, the free market and the minimal state (see Chapter 3 in Sunar, 2004 and Chapter 2 in Aydin, 2005). Moreover, in this period there emerged also the collapse of the organic vision of society and the concomitant developments of the politics of identity and difference. In this context, both the resurgence of Islam and the ―Kurdish question‖ initiated in their own ways a strong challenge to the organic vision of society, and thus contributed to the process of the fragmentation of political culture in Turkey. The resurgence of Islam as a strong political, economic and cultural actor criticized the secular foundation of the strong-state tradition. The Kurdish question, articulated both as a language of ethnic difference and a form of ethnic violence, challenged the organic vision of society and its

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assumption of the unity between the state and nation. Thirdly, in addition to the center– periphery and left–right cleavages, Turkey‘s exposure to the global economy introduced the global–national cleavage in Turkish politics. Since then, we have seen the increasing importance of this cleavage, as the questions of how to respond to the processes of globalization, how to maintain the sovereignty and autonomy of the state, and how to cope effectively with identity politics have become significant in Turkey. As for the economy, the changing economic policies in Turkey at the beginning of the 1980s did not only have a transformative impact on general macroeconomic policies; agricultural policies were transformed considerably as well. In this period Turkey experienced a radical decrease in the state‘s involvement in the agricultural sector. The authorities believed that the reason for high inflation rates in the pre-1980 era had been the intensive usage of output price supports, subsidies to the input prices and low interest credits, all of which created a pressure on monetary inflation (see Aydin, 2005). This was an important change in the state‘s perspective on the role and function of the agricultural sector. In this new paradigm, delineated by the neoliberal reforms and policy initiatives, the role of the agricultural sector and its burden on the economy constituted an obstacle to the good functioning of the market mechanism. Diverse policies had to be implemented in order to increase the productivity and efficiency of the agricultural sector. As Ozan Eruygur has mentioned, after 1980, significant changes took place in the direction of elimination of licenses, and reduction of duties in favor of special fund taxes. After the Uruguay Round Agreement on Agriculture, Turkey made necessary commitments on tariffs and export subsidies. Border measures consist of import tariffs without any specific duties and import restrictions, and export subsidies are as per commitments to WTO. (Eruygur, 2006) These developments, however, did not bring a sustainable and well-organized institutional assemblage in managing the agricultural sector. Since the 1980s Turkey could be seen as a case of poor governance mechanisms in agricultural policies. The governments failed to develop any policies to improve productivity; on the contrary, they made use of clientelistic and populist policies, to acquire short-term political gains. (Figure II shows the correlation between agricultural sector productivity and transfer policies.) The clientelistic transfers to producers mostly occurred from consumers through support purchases for major crops backed by high tariffs. Reduction in state involvement in tobacco, sugar and tea are closely linked with the privatization of the related agricultural state economic enterprises, and this was also in line with the neoliberal ideals that dominated Turkey‘s political economy during the 1980s and 1990s. Nevertheless, the side effects of these neoliberal policy choices have been ignored. For instance, due to the reduction in state involvement in the tobacco sector, producers in cities such as Adiyaman were negatively influenced, and this became a critical issue in the sense that many producers who lost their source of income started to migrate to the big metropolitan centers. Hence, it should be noted that Turkey‘s agricultural policies during the course of the 1980s and 1990s, and the internalization of neoliberalism in this context, intermingled with other socio-economic tendencies in Turkey, especially those concerned with urbanization patterns, migration, and poverty. Overall, the 1980s also showed that increasing reliance on

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Percentage producer support estimate

the market mechanism in managing the agricultural sector did not bring the desired outcomes in terms of productivity and efficiency from a comparative perspective. (See Figure III.)

Source: Eruygur (2006). Figure II. Developments in Agricultural Support in Turkey and OECD Countries: 1979–2000.

Source: Eruygur (2006). Figure III. Agricultural Productivity.

Turkey‘s exposure to globalization has ended national developmentalism. Even though the strong state remained as the idea or type of the Turkish state, its reality and form have changed, and it has entered the period of the neoliberal state with export-promotion industrialization. The state has become minimal institutionally, and a site of power relations

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between political or social forces and classes. The state remained nominally strong, but turned into a very weak state in reality, vulnerable not only to global dynamics and domestic transformations, but also to the problems of corruption, high clientalism and nepotism. Market liberalism has brought about a strong state in rhetoric but a weak state in reality, facing a serious problem of democratic deficit, and vulnerable to crisis and instability.

TURKEY’S EUROPEAN TRANSFORMATION: 2000 TO THE PRESENT Since 2000 there have been a number of important historical processes that have caused state elites and political actors to conceive of security, democracy and economic sustainability as intertwined, and to perceive civil society and civil society organizations not instrumentally, but on the contrary as effective agents for democratization. These processes have originated both from the international context and from domestic developments. First, the Turkish economy collapsed in February 2001, and as a result Turkey faced the most severe financial crisis with extremely devastating implications (varying from the problems of high unemployment, poverty and equality to increased dissatisfaction and anger with the existing state-centric Turkish politics); it has become apparent as a result that the strong state tradition was in fact very weak in reality, especially with regard to its extreme vulnerability to financial globalization outside, and to the problems of corruption, clientalism, and populism inside. The February 2001 financial crisis indicated that during the 1990s the state‘s security-based governing of society in the name of protecting its secular and territorial integrity, and in doing so its attempt to privilege security issues over the structural problems of democratization and sustainable economic growth, have resulted increasingly in corruption, and a populist-based organization of the state with a concomitant vulnerability to the speculative moves of financial globalization (see Chapter 4 in Keyman and Onis, 2007). It is in this context that the collapse of the Turkish economy was regarded as a ―governing crisis‖ in essence, whose solution requires a radical restructuring of state–economy relations in such a way as to make the state an effective, efficient, accountable and democratic governing institution. This was what has come to be known as ―the strong economy program,‖ aimed at restructuring the state on the basis of macroeconomic stability and a new governing rationality towards the creation of a sound political development management. This implied that the time of the strong-state tradition had come to an end, and a search for an effective state was initiated in the realms of democracy and sustainable economic growth. The move towards democracy in order to create an effective and efficient state and the need to think of security, economy, and democracy as intertwined, together established a historical and discursive context in which civil society was conceived of as a vital area and an agent in the necessary democratization of the state. Even if it would be wrong to establish a necessary link between the financial crisis and civil society, the attempt to restructure the strong-state tradition with an emphasis on democratic efficiency has nevertheless given rise to the perception of civil society as an integral element of the needed democratization of state–society relations. The second, and perhaps the most important, historical development at the beginning of the 2000s was the process of deepening in Turkey–EU relations. Since the Helsinki Summit of 1999, at which Turkey was granted the status of a candidate country for full membership, Turkey–EU relations have become more certain and have become deeper. This deepening

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process gained a new impetus at the Copenhagen Summit of 2002, where Turkey obtained a conditional date to start its full accession negotiations. The decision was that if Turkey fulfilled what is known as the ―Copenhagen political criteria,‖ its full accession negotiations would begin in 2004 ―without a delay.‖ The Copenhagen political criteria refer mainly to the fulfillment by the candidate country of the necessary condition of democracy and its implementation in state–society relations. The establishment of a democratic state structure and the protection of individual rights and freedoms, including the rights and freedoms of minorities, constitute the basis of the political criteria for EU membership. As Turkey–EU relations became more certain and deeper, this forced the government in Turkey both to make a number of significant legal and constitutional changes and to attempt to implement these changes in state–society relations, in order to upgrade Turkish democracy to the European standards. These historical developments, namely those of the February 2001 economic crisis and the process of deepening in Turkey–EU relations, have created a process of transformation in which the strong state has been subject to a radical restructuring, and the possibility of creating a multicultural and plural social formation with a rights-based understanding of citizenship was also achievable. They have also led to the emergence of the citizenship– identity cleavage in Turkish politics, as they have brought into political debate the question of whether or not it is possible to solve identity problems through citizenship rights, and also to regulate state–society interactions on the basis of citizenship rights. Turkey‘s Europeanization process continues the neoliberal state form but has given it a more democratic outlook. As for the agricultural sector, it can be suggested that Turkey‘s candidacy for membership of the EU has also added a new dimension to the changes in agricultural policies. The reform program introduced through the Agricultural Reform Implementation Project (ARIP), in line with the neoliberal tradition, aimed at diminishing the role of the state in the agricultural sector. For instance, the Tobacco and Sugar Laws of 2004 led to the privatization of TEKEL (the Turkish Alcohol and Tobacco Company) and TURKSEKER (the Turkish Sugar Company). In the grain sector, TMO (the Turkish Grain Board) reduced its volume of intervention purchases. In order to decrease the financial burden of the agricultural sector, new initiatives such as ―removal of the input (especially fertilizer and credit) subsidies, decrease the state procurement activities together with the privatization of the related state economic enterprises and restructuring of the sales cooperatives‖ have been put into practice. Moreover, the real novelty of ARIP has been the introduction of a new tool, namely direct income support that is determined in a way that depends on the cultivated area (see Cakmak, 2005; Chapter 4 by Akder; Chapter 5 by Cakmak and Dudu). The unsustainable fiscal, economic and social costs of agricultural policies led Turkey to reform the agricultural subsidy system, with the intention of contributing to fiscal stabilization and promoting allocative efficiency. The process of globalization and Europeanization has continued in Turkey, and recently it has become vulnerable to the global economic crisis. This crisis has generated negative impacts on the necessary agricultural reform initiative. The impacts of these processes will continue and the future of the reform initiative remains to be seen. What is certain, however, is that despite the changes in the reality and form of the state, as well as in the capital accumulation process, the Turkish economy remains unstable and vulnerable to global fluctuations and crises, in which the agricultural sector and its problems have usually been deferred and put aside. As the chapters of this book elaborate in detail, one of the fundamental

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reasons for this is the strong state tradition and its main characteristics: strong as an idea and in rhetoric; weak in reality and in its ability to solve societal problems. This paradox, embedded in the state in Turkey, remains to be solved, and until that moment, it constitutes an important reason for the problems of the Turkish economy in general, and the agricultural sector in particular.

CONCLUSION Relying on Migdal‘s and Poulantzas‘s significant contributions to state theory, this chapter has aimed to demonstrate that while Turkish modernity has been framed by the endurance of the strong state tradition, in which the state has played a dominant role in shaping and reshaping the process of political, economic and social transformation, the role, effectiveness and functions of the state have changed in accordance with changes in the world-historical context and class configurations. In this sense, the chapter has put forward two interrelated suggestions: first, that it would be accurate to think of the strong state as a rhetorical or abstract concept, yielding an idea or type of the state in Turkey, and not corresponding to the reality of the state. Secondly, as the chapter has pointed out, throughout Turkish modernity, not only has the strong state operated in different forms, but also, and more importantly, it has been weak and ineffective in solving societal problems. In fact, as Turkey has become a complex society whose governance is much more difficult, the ineffectiveness of the strong state has increased, and the processes of globalization and Europeanization have delimited its power over society and political or social forces. It should be pointed out, however, that it would be a mistake to view the state as a passive recipient of globalization and Europeanization; on the contrary, as has been indicated, the state has always been active in its response to these processes. In this sense, studying the state should focus on the dialectical interplay between it and these processes, in which both aim at influencing and reshaping the process of transformation. This means that the strong state has always been, and will remain, an active and dynamic agent of transformation, and that it has performed, and will continue to perform, practices that constitute the web of relationships between itself and society. It is for this reason that the state, in attempting to shape and reshape the process of transformation, has been active in dealing with different phases of modernization and capitalism, as well as with different political cleavages corresponding to these different phases. To recognize the different forms and historical transformations of the state, which have emerged out of the differential condensation of power struggles among political and social forces and classes, is also to suggest that what is important is not to develop an anti-state, or pro-market, or pro-identity political discourse or strategy or position, but to seek a way of transforming the strong state into a more democratic, effective, accountable and transparent governance institution. The agricultural sector constitutes an important site at which to analyze critically the role and power of the state in Turkey. It is in this sector that one may be able to see how the strong state tradition has been, and still is, weak in its governance of the economy. This chapter has attempted to provide a brief account of the state problem in agriculture, which the remaining chapters of this book elaborate in great detail.

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REFERENCES Ahmad, F. (1993). The Making of Modern Turkey. London: Routledge. Aydin, Z. (2005). The Political Economy of Turkey. London: Pluto Press. Beck, U. (2000). The Reinvention of Politics. London: Polity. Beck, U. (2006). Cosmopolitian Vision. London: Polity. Cakmak, E. (2005). Evaluation of the past and future agricultural policies in Turkey: Are they capable to achieve sustainability? Options Méditerranéennes. Sér. A / n°52. Eruygur, H. O. (2006). Impact of policy changes on Turkish agriculture: An optimization model with maximum entropy formalism. Unpublished Ph.D. Thesis, METU. Heper, M. (1985). The State Tradition in Turkey. Beverley, North Humberside: Eothen Press. Jacoby, T. (2008). The development of Turkish agriculture: Debates, legacies and dynamics. Journal of Peasant Studies, 35(2), 249 – 267. Jessop, B. (1990). State Theory. London: Polity. Kasaba, R. (2007). Introduction. The Cambridge History of Turkey, Volume 4: Turkey in the Modern World. Cambridge: Cambridge University Press. Kazancigil, A. & Ozbudun, E. (1981). Ataturk. Founder of a Modern State. London: C. Hurst & Company. Keyder, C. (1997). Ulusal Kalkinmaciligin Iflasi (The Bankruptcy of National Developmentalism). Istanbul: Iletisim. Keyman, E. F. (2008a). The Good Governance of Turkey. Istanbul: Bilgi University Publications. Keyman, E. F. (Ed.) (2008b). Remaking Turkey. Oxford: Lexington. Keyman, E. F., & Onis, Z. (2007). Turkish Politics in a Changing World. Istanbul: Bilgi University Publications. Larrabee, S. S., & Lesser, I. (2003). Turkish Foreign Policy in an Age of Uncertainty. Santa Monica: Rand. Mardin, S. (2006). Religion, Society and Modernity in Turkey. Syracuse: Syracuse University Press. Migdal, J. S. (2001). State in Society. Cambridge: Cambridge University Press. Ozbudun, E. (2000). Contemporary Turkish Politics. Boulder: Lynee Rienner. Poulantzas, N. (1978). State, Power, Socialism. London: Verso. Sunar, I. (2004). State, Society and Democracy in Turkey. Istanbul: Bahcesehir University Publications.

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 4

HOW TO DILUTE AN AGRICULTURAL REFORM: DIRECT INCOME SUBSIDY EXPERIENCE IN TURKEY (2001–2008) A. Halis Akder Department of Economics, Middle East Technical University, Ankara

ABSTRACT Turkey started in 2000–2001 an Agricultural Reform Implementation Project (ARIP) with four major components. The core component was ―the design and implementation of the Direct Income Support system.‖ The second component was the ―Farmer Transition Program‖ or, as the government called it, the ―Alternative Crop Program.‖ The third component was ―Agriculture Sales Cooperative Unions (ASCs/ASCUs) Restructuring.‖ The fourth component was the ―Public Information Campaign.‖ There were many institutions involved, but three of them actually provided resources for the formal enactment of ARIP: The Undersecretary of Treasury, the World Bank, and the Ministry of Agriculture and Rural Affairs. Therefore, they deserve to be called prominent players. Consumers, farmers, and processors remained outside the policy network during the formulation of ARIP. ARIP was intended to create simplicity and transparency and eventually to reduce the number of support instruments. However, right from the start, additions to and also reductions of the initial program diluted the reform. The project ended in 2009 without attaining any of the original goals.

INTRODUCTION The Agricultural Reform Implementation Project (ARIP) started in Turkey in 2000–2001 at the deepest point of a domestic economic crisis. Right from the start, additions to and also reductions of the initial program diluted the reform. Each new subsidy added thinned the Direct Income Subsidy (DIS) component, until the 600 million US dollar reform disappeared during 2006–2009 without attaining any of the original goals.

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It was the Treasury, an institution not specializing in agriculture, that felt the serious need for this reform at the end of the 1990s. The Treasury asked the help of the World Bank for the justification, but also for the finance and implementation, of the reform. The World Bank became the main designer and a prominent player in the ―Agricultural Subsidy Reform.‖ One of the signatories of the ―Project Appraisal Document‖ (World Bank, 2001), John Nash, a World Bank economist, prepared as early as April 1998 a note entitled ―A Direct Subsidy Program in Turkey‖ (Nash, 1998a). This note may be considered as the initial start, the first formulation (sketch) of ARIP.

THE BACKGROUND It is important to note that the initial demand for reform came during a ―structural adjustment program,‖ and not at the start of the crisis in 2001. The Bank admits in the ―Appraisal Document‖ that the policy dialogue laid the conceptual foundations of the reform over the last several years. The increasing concern of the Treasury was probably twofold. The Treasury felt that the generous but inefficient subsidies for agriculture were unsustainable. However, the concern of the Treasury alone would not be sufficient to mobilize a political party or the government in Turkey for a subsidy reform. A reform that would phase out, or cut and control, subsidies conflicted with the (practical) interests of the governing and also the opposition political parties. A subsidy reform proposed by an international organization that was politically neutral had at least a chance. The justification of the reform by an independent expert could move the emphasis from politics to a technical requirement. The involvement of the World Bank gave credibility to the reform and at the same time it shifted the political responsibility away from political parties.

The Goal of the Reform The goal was ―to provide income support to farmers to compensate them temporarily for elimination of input subsidies and output price support programs, to give them time to adjust to market prices‖ (Nash, 1998a:4).+ There were important results from previous projects that laid down the goal of this subsidy reform. First, in spite of generous subsidies, the growth performance of the agricultural sector during the late 1990s was very stagnant but related support policies were fiscally expensive and encouraged waste and abuse. There was no need to promote fertilizer use anymore. The slowing growth of fertilizer use in spite of high subsidies and stagnant yield indicated the maturity of the market. Such subsidies were not addressing policy targets such as the alleviation of rural poverty and regional development. This information was given by Joseph Goldberg, sector manager of ARIP, at a Conference on Rural Development, in his presentation ―Rural Development in Agricultural Reform Implementation Project ARIP,‖ February 20, 2009, Ankara. He was kind enough to send me a copy of the notes of John Nash (team leader of ARIP). The titles of the other notes are: ―Fertilizer subsidy reform,‖ ―A reform path for agricultural state economic enterprises,‖ ―Agricultural trade and price support regime and reform proposal,‖ ―Agricultural credit subsidies,‖ and ―Agricultural support policy proposals: A blueprint for reform‖ (Nash, 1998b). The last one is a synthesis paper. + The same objective is also stated in the ―appraisal document,‖ (World Bank, 2001:3), but with a much more careful wording and in an indirect manner.

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Rural poverty was more widespread than urban poverty, because agricultural growth was lagging and the existing system was channeling subsidies to large holdings (Nash, 1998b:1). The Bank was convinced that not all but many government initiatives were counterproductive. Trade controls, government procurement, heavy government investment in marketing, input subsidies and heavy investment in irrigation infrastructure on a fullysubsidized basis have created a net inflow of resources from the government to agriculture but have had many negative effects on the sector and the economy at large. They caused production inefficiency, squeezed out private sector marketers, and subsidized inefficient technologies. The ―duty loss‖ system of administration, by which losses of government organizations directly responsible for giving the subsidies are reimbursed by the Treasury only after long delays, has burdened these organizations with debt, impeded planning, and obscured the actual magnitude of the subsidies (Nash, 1998b:1). Some of the subsidies were so large that they caused negative macroeconomic effects as well. All of this was creating potential barriers for Turkey‘s accession to the European Union (EU) and some did not comply with World Trade Organization (WTO) rules (World Bank, 2001:6). The logic of ARIP, especially the reform of the agricultural policy instrument mix, reflected the prevailing views on trade-distorting subsidies expressed in international trade agreements. As such, the WTO Agreement also contributed to the pressure for reform and made up the new agricultural policy framework. An explicit goal of ARIP was to enable consistent policies with the EU candidacy that would eventually enable a smooth transition to the Common Agricultural Policy (CAP) (World Bank, 2001:3). However, in the short run WTO commitments were much more important. The Customs Union (CU) with the EU (1996) that followed the WTO membership (1995) had no serious implications for agricultural policy, because agricultural commodities were exempt from the CU. Besides, at that time the EU was reforming its agricultural policy in line with new WTO rules, and was also moving towards direct income subsidy.

Advantages Expected from the Reform The advantages of the reform mentioned by the World Bank were: ―increased efficiency of resources devoted to agriculture,‖ ―reduction in food prices,‖ ―better budget planning and execution,‖ ―better predictability of income for farmers,‖ ―better targeting of the support,‖ and ―low distribution costs of the subsidies‖ (Nash, 1998a:1). One may easily notice that the expected advantages, except for the DIS payment itself, were not necessarily to the direct benefit of the farmer. Phasing out price support would decrease some food prices for the benefit of the consumer. The improvement of budget planning would solve a problem for the Treasury (see also Chapter 5 by Cakmak and Dudu). Targeting poor farmers puts the accent on poverty rather than on farm problems. The initial formulation of the reform identified as problems the undesirable effects of phasing out the existing subsidies, or the threat that the Treasury would not be able to pay subsidies at all. The reform (DIS) was thought of as an instrument to prevent a very rapid, socially distracting withdrawal of people from rural areas that might have occurred with rapid removal of support prices and input subsidies to agriculture. Maybe the approaching crisis was signaling such a danger to the Treasury? To encourage farmers to make production and input use decisions on the basis of the true market prices was, of course, a desirable

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circumstance for the World Bank. They were sure that this would increase economic efficiency as an additional advantage. There would be no surplus production and the crop pattern would change in accordance with comparative advantage.

The Experience of other Countries Many countries were still in the 1990s using input subsidy and output price support policies similar to those in Turkey. However, very few, especially among Organisation for Economic Co-operation and Development (OECD) countries, have had programs with such high levels of support relative to the size of the economy. Agricultural support in Turkey totaled roughly four percent of the GDP. There was less reliance on price support programs at that time in Canada, New Zealand, and Australia, and in many middle-income developing countries, especially in Latin America. The EU could be the obvious model for Turkey. The EU had started in 1993 a direct subsidy program to compensate producers for the reduction in support prices. The payment basis was the area under certain crops. The subsidy was fixed, and there was no time limit for its removal. In the EU these reforms have brought the prices, particularly of cereals, much closer to world prices. Subsidy payments in the EU were increasingly linked to farmers‘ measures to conserve resources or to regional development. From the point of view of the World Bank there were two shortcomings in these programs: first, that the land still had to be planted to support crops; and second, that large producers had to set aside a predetermined area. The Commission therefore still maintained a significant ability to interfere with market mechanisms. The Mexican experience was somewhat different. The reform was decided on in 1992, but started in 1994. The duration of the program was 15 years. As in the EU, the basis for payment was the average acreage but the goal was to compensate producers for the elimination of guarantee prices for certain crops. In Mexico, Producer Subsidy Equivalent (PSE) has fallen from 30 percent in 1992–94 to 5 percent in 1995, and has been replaced by direct income support. Lack of a complete farmer registry and payment system were the main weaknesses. The United States introduced direct income support in 1996. The goal was to compensate farmers for the elimination of ―deficiency payments‖ of seven crops. The duration of the program was seven years. Romania started an income support program as an EU accession country in 1998. This program aimed also to compensate for reduction or elimination of price supports and input subsidies. The payment basis was land owned or leased by farmers. The subsidy was distributed in vouchers that were used to pay agricultural inputs. The reform in Turkey had the shortest duration and covered all crops. The reform started without a registry or a public information campaign.

The Pilot Program The first version of the pilot program was designed slightly differently. The idea was to implement a fully fledged program for one major crop. The expectation was that this would test the key logistical design details before the start of the national program. The best

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candidate was tea production, which was confined to a certain area. There was only one major input, fertilizer, that was subsidized. Farmers were well organized. There was one major support agency that was buying more than 65 percent of the crop, and there was a good farmer registry in each tea factory (Nash, 1998a:7). However, the experimental direct income subsidy program started in four provinces of Turkey in 2000. The selected provinces were assigned to different crops: Ankara-Polatlı to wheat, Antalya (Serik and Manavgat) to cotton, Adiyaman (Merkez and Kahta) to tobacco, and Trabzon (Akcaabat and Surmene) to hazelnut and tea. It is important to note that at this experimental phase the direct income subsidy met no resistance or criticism. Maybe interest groups thought at that stage that DIS would be implemented as crop-transition programs and that it would target poor income groups, or that it was an additional support? The Bank documents reveal that ―the simplicity in preparation‖ was amplified by the government‘s request for urgency (World Bank, 2001:12). One may even speculate whether the crisis of 2001 interrupted the preparatory activities. The ―Public Information Campaign‖ about ARIP was supposed to be started at this stage but was then postponed, due to bureaucratic procedures of the Bank or the Treasury. This delay became one of the main reasons why subsequent resistance to reform became widespread.

PROMINENT PLAYERS There were many institutions involved, but three of them actually provided resources for the formal enactment of ARIP: The Undersecretary of Treasury, the World Bank, and the Ministry of Agriculture and Rural Affairs. Therefore, they deserve to be called prominent players. Consumers, farmers, and processors remained outside the policy network during the formulation of ARIP.

The Role of the Treasury The Treasury (bureaucracy) was probably at this stage not so much interested in ends in terms of clear policy targets but rather in the means in terms of new instruments that would facilitate the ends of the new agricultural policy. In other words, they wanted to limit unpredictable surges of the budget expenses by making agricultural policies more accountable and raising their efficiency. The inefficiency of cooperatives and state economic enterprises, for example, was rooted in the fact that they were compelled by government officials to employ staff in excess of their requirements, and at wages far above comparable private sector levels. It may be argued that it was only due to the financial crisis in 2001 that the Treasury, as a representative of non-agricultural interests, could take charge of an agricultural reform. Their main concern was a sustainable budget. Yet, soon after the economic recovery, the traditional agricultural stakeholders re-emerged and the Treasury retreated.

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The World Bank The World Bank designed sector-specific reforms (microeconomics) in Turkey. The role of the Bank was usually more than just consulting and finance. It assumed the role of a rational ―social planner,‖ comparable to a planning office. The Bank was involved in similar agricultural reforms that took place in some new member states of the EU, for example in Romania. When ARIP started, the World Bank was quite experienced with both success and failure in agricultural projects. However, ARIP was much larger in its range and scale than all the previous policy initiatives and it included pioneering, experimental elements. Once completed, the World Bank expected that these reforms would make Turkey a model for other countries‘ agricultural support policies (World Bank, 2001:3). At the start of the reform there was also a surprising coincidence. Kemal Dervis, who quit his leading position at the World Bank, became a special minister (of state) under the coalition government. He was accorded extraordinary ministerial powers concerning economic matters. He emphasized a technocratic approach and relied heavily on the bureaucracy of the Treasury that was directly subordinated to him. So the coordination between the Bank and the Treasury was probably managed exceptionally well during 2001. However, after the takeover by Adalet ve Kalkinma Partisi (AKP, the Justice and Development Party) in 2002, the Bank did not oppose or resist serious deviations from the intended reform.

The Ministry of Agriculture and Rural Affairs (MARA) The Ministry of Agriculture and Rural Affairs was obviously involved in the planning and implementation of agricultural policy. Mainly due to the ―economy wide‖ character of the reform, the Ministry of Agriculture and Rural Affairs was initially not at the center of the reform. Yet for the implementation of the reform MARA was vital. It was the need for a DIS farmer-registration database that put MARA at center stage, since it was best equipped to do the data collection and monitoring. The start of the negotiations with the EU further strengthened the role of the Ministry of Agriculture and Rural Affairs on the reform issue. The reform aimed, for example, to downsize the grain purchasing activities of TMO (the Turkish Grain Board). According to the Bank, the TMO support system had been a very inefficient instrument to assist small and medium-sized farmers. The government had to maintain an expensive bureaucracy to purchase and market grains, a task that could be performed by the private sector. TMO‘s only commercial assets were its storage facilities. These facilities could be leased to private traders as preparations were made to privatize them. However, soon after the reform, as part of the EU accession negotiations TMO was regarded as the organization that could potentially implement the Common Agricultural Policy (as it concerned grains) in Turkey.

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DESIGN OF THE REFORM The Size of the Program Payments were based on the number of eligible cultivated hectares of registered land either owned, shared or rented. A minimum amount of money that represented significant assistance per hectare for a ―typical‖ farmer was defined. The program cost was then the payment per hectare, multiplied by the total number of eligible hectares. An alternative approach could have been to determine the real support received by each farmer with the existing policies, and then give the farmer an amount approximately equal to this. The EU pursued this to some extent, but the accounting for this approach was not feasible without a registry system. The critical variable was the per hectare payment. Another World Bank report has calculated the amount of compensation (Lundel et al., 2004). DIS was approximately 50 percent of the loss in agricultural income. The Program’s Duration To meet the program‘s objective, payments were announced for five years. Payments under the DIS system could have been recurrent, but these would have become more explicitly targeted and harmonized with the EU system under the Common Agricultural Policy, as it would exist at the time of prospective accession. The government finished ARIP without considering these alternatives. The extension of the project beyond 2006 was because of the delays in the third component. There were also ongoing rural development projects that were financed with the residual project money. The Payment Basis A subsidy payment was established per hectare of land, independent of the kind of crop produced or production quantity. This decoupled subsidies from production decisions but required a registry of farmers; however, the information needed for the registry was quite limited. In the case of Turkey the use of cultivated land as the payment basis had some advantages. The amount of cultivated land has been quite stable (had reached its limits) since the 1960s. The distribution of land ownership was more equal than the distribution of agricultural and non-agricultural incomes. The distribution of land ownership was probably also more equal than the distribution of phased-out price support and input subsidies to farmers (Nash, 1998a:6). Beneficiaries The Bank‘s choice was to pay the landowner; the government‘s choice was to pay the user (the farmer). Actually, paying landowners turned out to be more convenient according to the tests of the pilot program. It would have been faster and simpler. However, the complexity might be interpreted as a positive impact as well. Informal contracts between landowners and farmers would have to become written, officially approved contracts to enable an application for DIS. From the economic-theory point of view the choice between the farmer and the owner would not matter. By increasing the rent, any subsidy could be capitalized by the landowner. Besides, in Turkey the total number of farms that operate only on rented land plus those operating only on a share basis is at most three percent (SIS, 2004:166–167). The vast majority of farmers are just landowners.

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Targeting the Program At the outset DIS was targeted. Only farms up to a maximum of 20 hectares of land received direct income support; the assumption was that larger farms do not require a subsidy, and very small farms were subsidized by a lump-sum amount that meant a higher rate of DIS per unit of land.

THE IMPLEMENTATION OF THE REFORM The intention was to start the reform as a huge hybrid project with four major components. The core component was, as expected, ―the design and implementation of the Direct Income Support system.‖ The second component, the ―Farmer Transition Program,‖ or, as the government called it, the ―Alternative Crop Program,‖ must have been a last-minute addendum. It was therefore the first dilution. There is no mention of this component in the preparatory works of the Bank. So it is more realistic to assume that the government demanded it, as the Bank tried to persuade them in favor of the DIS. The third component was the ―Agriculture Sales Cooperative Unions (ASCs/ASCUs) Restructuring.‖ This started quite late. The fourth component also did not started at once. This was probably a severe inconsistency. Actually, the Public Information Campaign should have started much earlier, maybe along with the pilot program. The reform did not start with all four components beginning simultaneously.

Direct Income Subsidy The first component of ARIP was direct income subsidy. The intention was to cushion the short-term losses and continue to provide adequate support to the agricultural sector in an incentive-neutral way. A unified, simple, transparent DIS system was introduced. The intention was not to compensate every farmer fully for income lost by the removal of the old subsidy system (World Bank, 2001:3). The uncompensated amount was thought of (most probably) as the expected sacrifice by the sector towards overcoming the crisis. This is how the Bank expressed its ―intention‖ in interim reports. But the public saw all of this via a quite different wording. The Ministry of Agriculture justified the project in another way. Actually, at the start the Minister protested the project, but then he negotiated, and maybe in an effort to reformulate it he declared the goal of the direct income subsidy to be an incentive for the start of a farmer registration database! After it were completed, the Ministry announced, it would enable efficient new support policies. This misinformation was probably the immediate diversion or dilution of the project goal. It was the fault of the delayed and insufficient public information campaign. The targeting failed immediately! It caused further land fragmentation, a quite undesirable effect. Farms with more than 20 hectares tended to be split up among relatives in order to receive higher amounts of payment. Even very small farms were split in order to benefit from the lump-sum payment foreseen for tiny farms, smaller than one acre. Soon the lump-sum payment for small farms was removed, and the eligibility for the subsidy increased to 50 hectares. But this was inconsistent with the justification for the reform. One major

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criticism directed at former subsidies had been that they were to the benefit of larger farms. Now, without targeting the smaller, poorer farmers, large farms were benefiting from DIS more than small farms did, as before. It was not very difficult to foresee this outcome. Actually World Bank economists were aware of this problem. In their preparatory work they emphasize the relationship between registry and capping (Nash, 1998:6), but at that early stage they were considering using the existing registries of ASCUs or Agricultural Chambers. The way in which DIS started in Turkey was also not very ―green.‖ The WTO rules state explicitly in Annex 2 of the Agreement on Agriculture (WTO, 1995) that ―the amount of such payments in any given year shall not be related to, or based on, factors of production employed in any year after the base period,‖ and ―Eligibility for such payments shall be determined by clearly-defined criteria such as income, status as a producer or landowner, factor use or production level in a defined and fixed base period.‖ DIS may not be adjusted year by year according to the change in land ownership, but this was exactly how ARIP proceeded with the evolving farmer database. The cross compliance production requirement was an additional violation. But there was no farmer database available at the beginning that could have been declared as the baseline, and even after seven years the registry is probably still incomplete! The number of registered farmers who applied for DIS increased from 2.18 million in 2001 to 2.59 million in 2007. In the same period, the supported area increased from 11.8 million to 16.2 million hectares. Many small farms remained unregistered in spite of the prospect of getting access to direct payments. This may be due to the high transaction costs of the required documentation. It is usually incomplete inheritance procedures that make registration difficult. A distrust of the central authority, and the fear that the information delivered may be used sometime later against the farmer‘s interests, for example for taxation, also explains to some extent the reluctance to register. Maybe ARIP should have tried, in spite of all this, to register all farms independently of their eligibility for the DIS, and then to sort out the eligible ones?+ The first component of ARIP was intended to achieve simplicity and transparency and eventually to reduce the number of support instruments. However, since 2003 the government has been diluting the program by adding new subsidies. The web page of the Agricultural Ministry lists as of the time of writing (February 2009) the new subsidies under eight main headings: area-based payments, deficiency payments, certified seed and fruit tree seedling subsidies, alternative crop subsidies, subsidies for animal husbandry, subsidy for crop insurance, subsidized credits, and a residual of ARIP, environmental-conservation subsidies. The subheadings total more than 70. The recent subsidy scheme exhibits extreme cropspecificity. The ideal of MARA seems to be several subsidies for each and every crop. After the government change in 2002, a portion of the direct payments were labeled as fuel and fertilizer subsidy. The high cost of fuel and fertilizer was the major complaint of the farmer. Subsidy payments were made to appear as if they were additional payments to the unified DIS. They were labeled just as input subsidies, but in principle they were again paid according to the size of the farm. However, the rates for various crops differed, and, looking According to SIS (2004), there are 3,022,127 agricultural holdings in Turkey, and the total cultivated area is 18.4 million hectares. + The Ottomans kept for centuries a detailed registry of farms for taxation purposes. It is really in the last century that this tradition was lost, and the fear of taxation still seems to be alive.

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from the budget point of view, the government did not increase total payments. DIS for inputs was cut from the budget of the unified DIS. This is how dilution continued. This had two important implications. DIS payments were differentiated in time by crops, so there was an increasing deviation from the unified system. Secondly, such payments were becoming more and more ―amber.‖ In addition to direct payments for inputs, those who carried out organic farming and who had permitted their soil to be analyzed (for more efficient fertilizer use) benefited from additional direct payments as well. Thus, it became increasingly difficult to argue that DIS was now an incentive-free and decoupled instrument. But these land-based fuel and fertilizer subsidies, and DIS, were paid together until 2008. The DIS share of this grew continually thinner. In 2009 DIS was abolished, following the Prime Minister‘s explicit announcement; fuel and fertilizer subsidy survived, but was differentiated for more crops. This has become a crop-specific direct payment, has lost its decoupled character, and has become therefore a kind of price subsidy. ARIP was designed to facilitate liberalization in agriculture. Phasing out price subsidies was at the heart of the reform. Yet the Ministry wanted to continue supply management as before. For example, the so called ―premium payment‖ was not phased out. This is a deficiency payment or output subsidy in which the rate per unit of output of a commodity is the difference between an administered price and the market price. However, there is an unusual feature to its implementation. The government declares the amount of this subsidy very close to harvest time; that is, the farmers take their production decisions without knowing the exact amount of such payments, and the payments vary according to several factors. Cotton, (sunflower) oilseeds, olive oil, canola, maize, soybean, and even cereals are the main beneficiaries. In practical terms premium payment translates itself also to a price support. Wheat producers benefited from DIS, but instead of decreasing tariffs the government increased them for a certain period up to 130 percent. In certain years wheat received additional DIS as ―premium.‖

Farmer Transition The second component of ARIP is summed up by the term ―farmer transition‖; the government preferred the term ―alternative crop program.‖ The choice is not arbitrary: it indicates to the heart of the problem. The government stressed the ―alternative‖ so that it was not perceived as discouraging agricultural production (set-aside), but the project was designed to encourage farmers to ―quit‖ producing crops that were heavily overproduced. The labeling stressed the alternative, but the praxis stressed the surplus product. These products were indicated in the experimental direct income subsidy program: tobacco and hazelnut. The original list included sugar beet and tea as well, but these were left out as the project started. It is actually misleading to imply that the project tried to deal with all tobacco and hazelnut production. The scope was much narrower. Alternative crop projects to replace tobacco were designed for the southeastern and eastern provinces, and to replace hazelnut, for the flatter inland areas of the western Black Sea.+ The problem was common to both crops. The persistent high price supports for both crops had expanded their cultivation beyond Adiyaman, Bingol, Bitlis, Diyarbakir, Hakkari, Malatya, Mardin, Mus, Siirt, and Van. + Artvin, Bartin, Duzce, Kastamonu, Kocaeli, Ordu, Sakarya, Samsun, Sinop, Trabzon, and Zonguldak.

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their optimal ecological boundaries. The quality of both crops had decreased significantly as planting expanded to more fertile soils. The best quality of hazelnut is grown not on flat, lowaltitude land but on the slopes of mountains. High quality tobacco is also grown on sloping fields. Flat and fertile land increases the size of both crops but decreases their flavor. Yet heavy size is rewarded by an undiscriminating high support price policy. Excessive production increases would damage the producer‘s income even if the quality requirement were met. Assuming a monopoly power for Turkish hazelnuts in the export market, one may easily infer that after a critical quantity export revenue would decline, if demand did not shift proportionately. This explains the logic of the sales cooperative ―Fiskobirlik.‖ Without a stock policy, international price cannot be monitored. The last option is the pressing of the surplus hazelnut for its oil, which ends inevitably with a huge ―duty‖ loss (i.e. one caused by government orders and therefore compensated by the government), because the market price for the oil is lower. The politicians have never stopped offering higher prices just to obtain votes, and producers have never stopped expanding their output in the interests of increasing short-term revenue. Actually, all of these problems were already known, and solutions had been suggested. In 1983 a Hazelnut Law (No. 2844) was enacted to ensure that production was carried out only in the traditional zone. This law did not solve the problem. ARIP was just a new attempt to do so. It was designed with a much more liberal optimism, and it offered cushion and transitional subsidies. Further details are not very important, because there have been embarrassingly few applications for the project. The tobacco campaign was also not a success, but compared with that for hazelnuts there were at least some applications. However, directing these farmers to a desirable alternative crop failed completely. The list of alternative crops was quite long and the favorites of MARA experts were oilseeds, a net-import crop of Turkey, but farmers preferred cereals: wheat or maize. These are not necessarily crops that show a comparative advantage in southeastern Turkey. The disguised price support (increasing tariffs) directed farmers to cereals. The persistence of price support has destroyed expectations, both from direct income subsidy and from farmer transition. The alternative crop program, as it is designed for ARIP, may never succeed unless all subsidies are decoupled. In other words, if price subsidies prevail, alternative crop programs may only be appealing if the incentives for the alternative crop override other subsidies significantly. As this was not the case, the farmer transition program was doomed to failure almost from the start.

Agricultural Sales Cooperatives and Cooperative Unions (ASCS/ASCUS) Restructuring If the Government had moved toward direct income support for producers, as was intended originally; in other words, if the reform had been applied to achieve the goal of phasing out all subsidies, then the rationale for state ownership of State Economic Enterprises (SEEs) in these sub-sectors would have ceased to exist. They could have been privatized or, in the case of unviable assets, liquidated. But there was considerable delay in In 2003 the number of applications was 710; in 2004, 1270; in 2005 at least 48. http://www.tugem.gov.tr/ tugemweb/alternatifurunproje.html 4. and 5. pages.

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the start of this component. By the time it began, the DIS component was already diluted. It was apparent that all subsidies would not be phased out, and the original intention or expectation was not valid anymore. The counterpart of this component of ARIP was the Ministry for Industry and Trade. The Ministry for Industry and Trade, which was responsible for ASCUs, resisted the reform and was probably successful. The delay helped the Minister to avoid the (first version of the) reform. This reform started quite late, not until almost the beginning of 2005, but its duration was extended. Agreement between the Bank and the government was reached after the declaration of the so-called ―agricultural strategy document.‖ Actually, in terms of interdependence (consistency), the third component was as vital as the other two components. This component was attempted after considerable modification. A great deal was left out or reduced. The focus shifted onto the so-called ―licensed storage.‖ The most dramatic development that took place was surely the disagreement between the Government and Fiskobirlik on the eve of the 2007 elections. It is now TMO (the Turkish Grain Board) that has replaced Fiskobirlik, and procures hazelnuts for the government with huge ―duty‖ losses. This is of course not what ARIP had foreseen, but it is some kind of evidence that the AKP government was not serious about withdrawing from ASCs/ASCUs and giving them independence and autonomy. The third component of the program was intended to turn the quasi-governmental sales cooperative unions, previously used to administer support prices, into organizations dedicated to serving their farmer members through a process of restructuring and privatization. This would have reduced the role of government in the marketing and processing of agricultural products. The inefficiency of cooperatives and state economic enterprises, for example, was rooted in the fact that they were compelled by government officials to employ staff in excess of their requirements, and at wages far above comparable private sector levels. The success of this third component may be summarized as ―return to square number one‖!

THE REFORM PROCESS The fall in agricultural output in 2001 was not due to the reform but to a serious drought in that year. The reform (DIS payments) had been announced in 2001 but almost nothing was done in that year. DIS started in 2002, and payments for 2001 were transferred to 2002. A new single-party (AKP) government replaced the coalition government after the elections in 2002. The EU finally announced that it was prepared to start negotiations with Turkey on future EU membership, and the Doha Round negotiations were resumed after the failure in Cancun. This failure had contributed to the failure of ARIP. The goal of ―phasing out all subsidies‖ was based on the expectation that global liberalization in agricultural markets would continue. These developments influenced the Second Agricultural Advisory Meeting held in Ankara in 2005. The meeting ended with no new decision. A familiar, well-known list of problems was just repeated. Shortly after this meeting, the Minister of Agriculture was replaced by a new Minister. The Agricultural Strategy Document and Agricultural Law were also enacted after this meeting. Due to the increasing number of policy instruments, specific subsidies increased rapidly. The general support level started to rise again, indicating the coming elections in 2007.

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In November 2004, the Treasury and the State Planning Organization, led by the Ministry of Agriculture, declared with the approval of the ―High Planning Council‖ a so-called ―Agricultural Strategy 2006–2010.‖ The idea of the strategy was to announce a minimum level for agricultural subsidies. Subsidies should not be less than one percent of the GDP. This one percent was to be distributed in fixed proportions to various policy instruments. The document was an attempt to limit the arbitrariness of subsidies, but it also increased the control of the bureaucracy over agricultural subsidies. However, one should not overlook the fact that the Ministry of Agriculture had a different position from that of the Treasury towards the reform. Although there was agreement with the State Planning Organization to limit the arbitrariness of the politicians, the Ministry of Agriculture was not fond of the DIS, because this single instrument was about to reduce several functions and the overall power of the Ministry. The ―Agricultural Strategy 2006–2010‖ document was the preparatory work for the socalled ―agricultural law‖ (No. 5488), which was enacted in April 2006. The law lists priorities (targets) and instruments for agricultural subsidies, and the organizations involved, and is likely to create more additional bureaucracy. New boards are likely to be formed and staffed heavily with civil servants. Functionally nothing seems to be radically altered. The striking new features concerning policy formation are a long list of subsidies (support instruments) and the new constraint: ―The yearly support from the budget may not be less than one percent of the GDP.‖ This clause limits the arbitrariness of politicians to some extent, and makes budgetary expenditures foreseeable by force of law and not just by the advice of the Strategy Document. Actually, this change defined a minimum for agricultural expenditures but no upper bound. This will probably not eliminate fluctuations, but will reduce their amplitude and shift them to a higher level. The strategy document, on the other hand, was an attempt to legitimize a major deviation from ARIP by introducing new instruments and decreasing the importance of DIS. It killed (or revised) the original goal of ―phasing out all subsidies.‖ Now, by the World Bank as well, it was decided that DIS was only one of the support instruments. There was no opposition to this move, or criticism of it.

OPPOSITION TO ARIP There was no timely and effective public information campaign. The reform proposals did not gain support from the public at large, or from farm lobbies in particular. Elite commitment to reform was very poor. Farmers‘ organizations and agricultural chambers opposed the reform publicly, even using misleading slogans: ―ARIP pays money for not producing,‖ ―ARIP pays the landowner and not the producer.‖ The crisis was a suitable environment for imposing the reform from above, but resistance within the state destroyed this opportunity completely. The negative attitude of the coalition politicians, and even that of the Agricultural Minister, encouraged this resistance against the reform from the very beginning. Organizations that effectively sabotaged the alternative crop project were the The High Planning Council is headed by the ministerpresident. The members of the council are nominated ministers by the ministerpresident and the undersecretary of the State Planning Office. If required, high ranking bureaucrats may join the council, too.

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Turkish Alcohol and Tobacco Company (TEKEL) and Fiskobirlik. The opposition and resistance were amplified by the rise of anti-WTO movements in various foreign countries. This fueled public and political discontent against ARIP. ARIP has even been accused of being a ―foreign attack‖ against Turkey. ARIP kept quiet!

ASSESSMENT Assuming that the Ministry of Agriculture had executed everything according to the original plan of the World Bank, would this then have resulted in a great success? Most probably there would have been some corrections and improvements here and there, but the serious problems of Turkish agriculture would have remained unaddressed. Do the EU negotiations now offer a perspective for a new agricultural reform? Turkey is strongly focused on the ―common‖ dimension of CAP in Europe, mostly related to legislative aspects. Yet this ―common‖ dimension of European agricultural policy may not be appropriate for Turkish agriculture, which needs sustainable change rather than the preservation of sustainable agricultural landscapes. There is a need for vocational training, agriculture- and food-related research, infrastructure, land transfers, drainage, soil improvement, re-parceling and irrigation, as well as social security schemes. These policies may be labeled as ―productive,‖ in contrast to the ―predatory‖ policies that currently prevail in Turkey. ARIP‘s residual funds are channeled at the final stage towards rural development projects. Therefore, this was just a sad farewell touch to productive policies. Productive policies have neutral distributional effects but enable rural development through the support of local entrepreneurial initiatives and the generation of new markets. Predatory policies are primarily directed at wealth redistribution from one interest group or government agency to another. Unlike productive policies, these are not concerned with efficiency (Rausser, 1992; van der Zee, 1997:57, 151–156, 231–235). In Turkey ―predatory‖ policies have dominated. Expenditures on ―productive‖ policies are extremely weak. The existing institutional build-up is organized according to predatory policies and there is little room for the advocates of more ―productive‖ polices. Turkey has to look for another reform for productive policies independent of foreign stakeholders (the EU and the World Bank). The real reform would require strong national leadership that would successfully confront the established interests in domestic agricultural policy (Akder, 2007:530).

CONCLUSION What could have improved ARIP‘s design? Instead of planning a simultaneous start, a functional sequencing of the components could have yielded better results. The public information campaign and the registry should have started first. The registry should have covered all farms, and not only those eligible for DIS. The DIS and ASCU components should have started simultaneously. Alternative crop programs should have started after the completion of DIS, and it should have considered non-rural interests on agricultural policy.

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Is there a chance for a new agricultural reform? The Ministry of Agriculture promises a new reform, with a geographical division based on river basins. This approach might substitute rural development for agricultural policy; however, the details are not known. It is almost certain that any new instrument will coexist with the existing huge variety of subsidies. The global financial crisis will have an influence on Turkey. It is very probable that Turkey will accept a new International Monetary Fund (IMF) program. This program may put constraints on the financial resources for subsidies. Finally, one may ask, what has ARIP left behind? With the help of ARIP Turkey has almost completed its cadastre. This has been an achievement. Most importantly, ARIP has left a database of farmers, which was the goal of the Agricultural Minister in 2001, though it is incomplete. But the database has not been used until now for the justification of new subsidies. The value added by the database is not apparent yet, and if it is not to be kept alive with the widest scope possible, it may soon expire. Last but not least, there is the repayment of 600 million US dollars, a considerable tax incidence on Turkish taxpayers for an unrealized project.

REFERENCES Akder, H. (2007). Policy formation in the process of implementing agricultural reform in Turkey. Int. J. Agricultural Resources, Governance and Ecology, Vol. 6, Nos. 4–5, 514532. Lundel, M., Lampietti, J., Pertev, R., Pohlmeier, L., Akder, H., Ocek, E., & Jha, S. (2004). Turkey, A Review of the Impact of the Reform of Agricultural Sector Subsidization. Washington, D.C: World Bank. Nash, J. (1998a). A direct subsidy program in Turkey. Unpublished note, cited by J. Goldberg, sector manager of ARIP, at a Conference on Rural Development, in his presentation ―Rural Development in Agricultural Reform Implementation Project ARIP,‖ February 20, 2009, Ankara. Nash, J. (1998b). Agricultural support policy proposals: A blueprint for reform. Unpublished note, cited by J. Goldberg, sector manager of ARIP, at a Conference on Rural Development, in his presentation ―Rural Development in Agricultural Reform Implementation Project ARIP,‖ February 20, 2009, Ankara. Rausser, G. C. (1992). Predatory versus productive government: the case of US Agricultural Policies. The Journal of Economic Perspectives, Vol. 6, No. 3, 133–157. State Institute of Statistics (SIS) (2004). 2001 Census of Agriculture, Agricultural Holdings (Households). Publication No. 2924. Ankara: State Institute of Statistics. van der Zee (1997). Political Economy Models and Agricultural Policy Formation. Mansholt Publication Series 8. Wageningen: Wageningen Academic Publishers. World Bank (Turkey Country Unit) (2001). Project Appraisal Document on a Proposed Loan in the Amount of US$600 Million to the Republic of Turkey for an Agricultural Reform Implementation/Loan, June 6, 2001, Report No. 21177-TU. Washington, D. C: World Bank. WTO(1995).Agreement on Agriculture. http://www.wto.org/english/docs_e/legal_e/ 14_ag_02_e.htm

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 5

AGRICULTURAL POLICY REFORM IN TURKEY: SECTORAL AND MICRO IMPLICATIONS Erol H. Cakmak and Hasan Dudu Department of Economics, Middle East Technical University, Ankara

ABSTRACT Turkey initiated an agricultural policy reform program in 2000, with the financial and technical support of the World Bank, in order to contribute to financial stabilization and to decrease the price-distorting impact of the prevailing support structure in agriculture. The reform program has never been implemented as was intended at its launch. Output-based deficiency payments eventually gained importance in budgetary transfers without any accompanying decrease in protection for highly protected crops. Expected welfare gains that might have occurred with the transition from border protection to deficiency payments have not been realized. One obvious benefit of the agricultural subsidy reform program has been its significant contribution to fiscal stabilization by making the support budget transparent and establishing accountability. Efficiency estimations show that there is significant inefficiency in agricultural production. As expected, the change in efficiency between 2002 and 2004 is not statistically significant. Efficiency analysis provides important clues about the relationship between efficiency and several characteristics of farm households. The farms in the northern and eastern regions are relatively less efficient compared with their western and southern counterparts. Efficiency performance of farms improves as the scale of operation increases, both in terms of area and of income from agricultural activities. The farm households producing export-oriented crops and using credits have relatively higher efficiency. A high level of efficiency is necessary to achieve competitiveness in agriculture and to increase the welfare of society. Low average efficiency scores imply that significant gains can be achieved by gearing policies towards the factors that may improve efficiency in agricultural production.

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INTRODUCTION Agricultural production in Turkey has been growing at an average rate of about 1.3 percent per year since the mid 1960s. Despite this long-term dismal performance at the aggregate level, the share of the sector in total employment has remained high (around 30 percent), which has helped to mitigate some of the socio-economic effects of frequent economic crises. Another striking characteristic of the sector has been yearly and cyclical fluctuations in growth rates. Yearly fluctuations have mainly been due to climate; however, cyclical variations were more dependent on policy. The annual growth of the sector hiked up during periods with increased support for technological improvements, and returned to the long-term annual growth of less than one percent in the remaining periods. Total transfers to agriculture have also fluctuated wildly in recent decades. Unfortunately, the variation in the transfers was mainly dependent on the political agenda. An unstable policy environment, combined with high fluctuations in production, reduced the planning period of the producers. Eventually, agricultural policies, together with banking and social security policies, were selected to undergo heavy adjustments in the last structural adjustment and stabilization program, which started in 2000. The main reasons for the selection of the agricultural sector stemmed from the ineffective set of policy tools for improving the performance of the sector, and an ever-increasing burden of budgeted and unbudgeted government expenditures on fiscal costs and stability (Kasnakoglu et al., 1999; Lundell et al., 2004). In this context, the government of Turkey initiated the Agricultural Reform Implementation Project (ARIP) in 2000, with the financial and technical support of the World Bank, in order to contribute to financial stabilization and to decrease the price-distorting impact of the prevailing support structure in agriculture. The project consisted of four major components: the launch of a direct income support system, the restructuring of Agriculture Sales Cooperative Unions, payments for the transition of farmers, and project support services (see Chapter 4 by Akder). The project included a ―social monitoring and evaluation‖ sub-component, aiming ―to provide the project management with the feedback necessary to refine and redirect project support mid-stream, as necessary‖ (World Bank, 2001). In other words, the monitoring and evaluation were intended to provide information and analyses to support the decision makers in assessing the changes in the policy environment and in making the necessary adjustments. The plan was to conduct comprehensive Quantitative Household Surveys (QHS) for four years (2002–2005). That would have allowed analysis of both static and dynamic effects across households. Unfortunately, supply did not create its own demand. The relatively small budget allocated to the social monitoring and evaluation sub-component of the project turned out to be the first to be slashed in an attempt to reduce total government expenditures in 2004. Consequently, the four-year panel data collection and related analyses were given up. QHS was conducted in 2002 and 2004, accompanied by studies comparing the changes.+ The general purpose of this chapter is to discover the implications of the agricultural policy reform process at the sectoral and farm-household levels. To achieve this goal, the rest For a full description of the original Project see World Bank (2001). + All consulting services for Quantitative Household Surveys under the Agricultural Reform Implementation Project were provided by G&G Consulting, Baskent University and TNS Siar JV Consortium.

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of the chapter is organized as follows. The macroeconomic context in which the sector operates is summarized in the next section, together with the trends in agricultural performance and factor use. The second section is devoted to a discussion of the changes in the agricultural policies. A much discussed, but deficient, research area in the economics of agriculture in Turkey is the efficiency issue. The third section will summarize the results of an efficiency analysis using quantitative farm household survey data. The last section is devoted to concluding remarks.

OVERVIEW OF THE RECENT MACROECONOMIC AND AGRICULTURAL PERFORMANCE Agriculture does not operate in a vacuum. Changes in macroeconomic parameters may intensify or reduce the effects of the intended objectives of the agricultural policy environment more than for other sectors. For instance, the exchange rate regime may have more amplified effects on agriculture, since all agricultural products are tradable. Macroeconomic stability is necessary to improve the performance of the agricultural sector. Frequent economic crises in recent decades and the mismanagement of agricultural policies have delayed structural change in agriculture. The sector still dominates the rural economy by providing about two-thirds of rural employment. The dualistic structure of production has all the basic traits of a developing economy, with the dominant share of production concentrated in smallholdings, co-existing with commercial and mostly export-oriented producers. Turkey started the new millennium with another International Monetary Fund (IMF)backed macroeconomic stabilization and structural adjustment program. At the beginning, the program mainly depended on fiscal austerity measures combined with a pegged exchange rate regime. It was interrupted by a serious financial crisis in early 2001. The recent program backed by the IMF ended in 2008, and it relied mainly on two pillars: fiscal austerity and contractionary monetary policy. The ratio of the public-sector budget surplus, excluding the interest payments, to the GDP was targeted to be 6.5 percent. The role of the independent Central Bank of Turkey has been to implement the monetary policy through inflationtargeting, aiming to maintain price stability (Voyvoda and Yeldan, 2006). Recent tendencies in the selected macro indicators are presented in Table I. The growth performance of the economy was outstanding until 2007, with back-to-back growth of above 5 percent following the crisis. Inflation declined from 70 percent down to 10 percent. All budgetary targets were achieved during the program. However, despite the increase in investments (mostly private), the economy was not able to respond to the increase in the labor force. The unemployment rate has been constant at around 10 percent. Despite the overvalued domestic currency, the increase in exports has been able to keep up with the increase in imports. Both exports and imports increased by almost four times from 2002 to 2008. The increase in imports was slightly higher, partly due to deteriorating terms of trade. The trade deficit was financed by mostly short-term financial flows, as is reflected in the ever-increasing current account deficit. Agriculture suffered as much as did the rest of the economy from the crisis in 2001. The agricultural value added contracted by 6.5 percent in that year (Table 1). The average growth rate of real agricultural value added since the late 1960s is about 1.3 percent per annum. This

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growth rate is achieved with wide yearly fluctuations, which point out the high climate dependency of farm production. The drastic decline in 2001 shows not only the impact of the tightening budget, which abruptly cut the funds for government intervention in agriculture, but also the impact of a ―bad‖ year. Agricultural production was affected seriously by the drought in 2007. Agricultural value added contracted by more than 7 percent. Domestic terms of trade displayed an improving trend during the period being considered, thanks to the increase in world commodity prices supported by the protective trade policies. This agricultural growth performance has been achieved without significant change in the structure of production. Albeit declining, the share of agriculture in total employment is still higher than 25 percent. The average land and herd sizes per farm household are both small. Despite the relatively low share in value compared with area, cereal production dominates the policy scene, whereas horticultural products dominate agro-food exports. Turkey has about 26 million hectares of cultivated land according to the yearly statistical data (TurkStat, 2007). Field crops have occupied slightly over 85 percent of the cultivated area since 1985. The share occupied by vegetables is about 3 percent, but it has been increasing steadily. Orchards occupy 10 percent of the cultivated land. Land left fallow remains around 5 million hectares. The high rate of increase in real labor productivity in 2005 was due to the sudden decline in agricultural employment (see Chapter 7 by Ilkkaracan and Tunali). Jumps in the rural unemployment rates are alarming. Agriculture is the major employment source in rural areas with about a 60-percent share in total rural employment. As would be expected from the small size of the average farm, agricultural employment still has a relatively large share in total employment. The sector provides employment for almost all females in rural areas, with almost an 80-percent share in female rural employment (TurkStat, 2009b). The share of employment in agriculture is steadily declining, accompanied by the decline in absolute employment since the early 1990s. In the early 1990s agricultural employment was around 9 million, compared with the 5.7 million in 2008. The declining trends in rural labor force participation rates (LFPRs) and the share of agriculture in rural employment, combined with increasing rural unemployment rates, signal the start of a major transformation in the use of labor in agriculture. Despite the methodological changes in the household labor force surveys (HLFSs), it is clear that the rural labor force is in the process of adjusting to the new conditions shaping the overall economy and the agricultural sector in particular. However, employment in agriculture is still helping to reduce the pain of restricted employment capacity in the rest of the economy. The weight of crop production has been dominant in Turkish agriculture. Crop production forms 75 percent of the total value of agricultural production. The remaining share belongs to livestock products. The proportion of crop to livestock production has not changed during the last three decades. Heavily protected products, such as livestock and cereals, tend to have relatively lower shares in production, whereas export-oriented products continue to have higher shares in total. Policy interventions in the crop sector have generally been targeted towards cereals and oilseeds, whereas vegetables and fruit are relatively less important apart from some specialty products. However, the share of fruit and vegetables in total crop value has been around 40 percent. High protection coupled with domestic intervention schemes for cereals gain precedence, with negative repercussions on production in the animal sector. High protection for animal products has not been enough so far to increase the share of animal products in

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67

agriculture, due to the high costs of feed products. Consumers end up paying higher prices, even compared with the average prices in the EU. The production of the basic staple, wheat, has continued to follow the historical trend. It fluctuates at around 20 million tonnes, except in drought years. The heavy emphasis of government policy on increasing the production of oilseeds has not been successful so far. The enforcement of sugar beet quotas has been effective. This policy has stabilized sugar beet production to just enough to meet the domestic demand. A significant increase has been observed in the production of corn, accompanied by an increase in yields. As fruit is one of the major exportable crops, its area is expanding. Turkey accomplished significant liberalization of trade in industrial products starting from the mid 1980s. Liberalization in the agro-food sector has been proceeding at a slow pace. The liberalization of the sector follows the reduction commitments of the WTO Agreement on Agriculture (see Chapter 18 by Haeberli). Turkey has remained as a net exporter of agro-food products in the last decade (Figure I). However, the increase in imports has been higher than that of exports in the last three years. The ratio of exports to imports has been declining fast since 2005, accompanied by an increase of the sector‘s share in total imports and a declining share in total exports.

Source: TurkStat (2009c). Figure I. Net exports of agro-food products, EU-27 and total, 1999–2008.

The export of fruit and vegetables and their processed forms continues to be the driving force behind agro-food export performance. Albeit slowly, the proportion of processed products in total agro-food exports has been increasing (Cakmak and Akder, 2005). Imports are heavily controlled and have basically consisted of raw products imported under the ―inward processing regime,‖ and agricultural commodities to compensate for shortages in domestic supply.

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RECENT CHANGES IN AGRICULTURAL POLICIES Turkey may be considered as a perfect example of the mismanagement of agricultural policies from the mid 1980s until 2001. The governments were unable to develop any policy to improve productivity in agriculture. Transfer policies were considered to be the only possible tool, because of frequent early elections. ARIP started in 2000 and gained momentum in 2001. The reform targeted two major areas: to reduce the fiscal burden of support to agriculture and to move towards a more efficient structure for production. A detailed framework for the implementation of the reform program was backed by the World Bank, but also approved by the governments from its launch in 2001 until its end in 2009. Aside from promoting allocative efficiency, the reforms were necessary for fiscal stabilization. The transfers to producers mostly occurred from consumers through support purchases for major crops backed by high tariffs. Transfers to producers from taxpayers did not reach high levels compared to the transfers from consumers, but were accompanied by huge financial costs until 2001. Most of the transfers from the state, i.e. deficiency payments, were not budgeted, and the funds of the state banks were utilized without paying them back in due time. One of the primary targets of ARIP was to stop this financial burden by budgeting all transfer payments to farmers. Another channel with an increasing effect on financial costs of support purchases cropped up through the related state economic enterprises (SEEs) and Agricultural Sales Cooperative Unions (ASCUs). ARIP tried to reduce this burden by making the ASCUs more autonomous and by pushing the SEEs to be more self-reliant, or simply by the privatization of agricultural SEEs. The most important component of ARIP was to phase out government intervention in the output, credit, and fertilizer markets, and to introduce direct income support (DIS) for farmers through per-hectare payments independent of the choice of crop. This leg of the reform suffered heavily from the lack of a public information campaign. It certainly achieved the target of forming a safety net against the removal of government intervention. The payments have never been made in full. The full payment announced per year has been made in installments. The recently enacted support for diesel and fertilizers is in practice another form of direct income support. One of the most important successes during the implementation of the reform program has been to impose control on budgetary transfers to the sector. The recent expansion of the payments for open-ended crop-specific deficiency payments has been made at the expense of other forms of support. Eventually, the DIS payments were stopped in 2009. DIS-like payments through diesel and fertilizer support are still ongoing. Product-based deficiency payments have been announced each year, and paid to the farmers without any changes in the level of protection. As regards the agricultural SEEs, only TEKEL (the Turkish Alcohol and Tobacco Company) was privatized. TURKSEKER (the Turkish Sugar Company), CAYKUR (the Tea Company) and others are waiting to be privatized. In the grain sector, after a few quiet years of intervention, TMO (the Turkish Grain Board) increased its volume of intervention purchases to a record high in 2005 due to ―good‖ weather conditions for cereals. In addition,

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69

TMO expanded its operations to hazelnuts. The duty losses of TMO will certainly be reflected in the public sector accounts in the future. Prior to the reform program, ASCUs intervened to support certain commodity prices on behalf of the government. The reform program aimed at the removal of government subsidy in this context. Partial funding for the severance payments was provided to enable them to become financially autonomous eventually (Lundell et al., 2004). Although the final impact of the reform on restructuring the ASCUs has yet to be announced, the fiscal burden of ASCUs on the treasury has declined. One-time alternative crop payments formed the third leg of the reform program. It provided grants to farmers who required assistance in switching out of surplus crops to net imported products. Initially, the program was intended to cover the costs of shifting from producing hazelnuts, tobacco, and sugar beet to the production of oilseeds, feed crops, and corn. Participation in alternative crop payments has been limited due to mixed signals from the government to the farmers. The signals from the government were not convincing enough for the hazelnut and sugar beet farmers. Tobacco farmers have displayed the highest participation, due to the privatization of TEKEL. An Organisation for Economic Co-operation and Development (OECD) study on transfers to agriculture can be used to trace the trends in policy transfers to agriculture (OECD, 2008). Transfers to producers showed a significant increase prior to the start of the structural adjustment program in 1999. The contribution of agricultural policies to the farmers‘ revenue increased by a factor of 2.3 between the end of the 1980s and the end of the 1990s. The general effects of ARIP were significant, with a sudden drop in the support to agriculture in 2001. State intervention in the output markets was severely restricted in 2001, coupled with the delayed implementation of direct income support. The domestic market has been adjusting fast. The market price support provided by the border measures picked up again in 2002 and it has remained high since then. The share of total support in the GDP was 5 percent in the late 1990s. It declined to 2.4 percent in 2006 (Table II), but it is still one of the highest proportions among the OECD member countries. The percentage consumer support estimate (CSE) indicates that the major source of transfer to agriculture is consumers, who are taxed through distorted domestic prices. Percentage CSE was back to the pre-crisis level in 2005. It has started to decline in recent years due to increasing world commodity prices. Another category in the total transfers is the General Services Support Estimate (GSSE), which consists of private or public services provided to agriculture generally and not individually to farms. Simply put, it is just the difference between the total transfers and the producer support estimate (PSE). The most important item in this category is the financial cost of the intervention agencies. The burden of the mismanagement before 2000 had a significant share in the total budgetary transfer, amounting to more than USD 3 billion. The increase in the financial cost of intervention can easily be seen in Table II. The share of GSSE in total transfers increased from 5 percent in 1986–89 to more than 80 percent in 2001, mainly due to the decline in the other types of transfers. It started to decline in 2002. The upward movement in 2005 is mainly due to the huge intervention purchases of the TMO.

Duty losses are the costs incurred by the SEEs and ASCUs due to mandates carried out on behalf of the government.

Table I. Selected macro and agro-food indicators, 1998–2008.

Macroeconomic indicators GDP (current USD billion) Real GDP growth (percent) GDP per capita (current USD) Real GDP per capita growth (percent) Inflation – CPI (percent) Unemployment rate (percent) Imports/GDP (percent) Exports/GDP (percent) Import coverage of exports (percent) Foreign terms of trade (TOT) (2003=100) Agro-food indicators Agricultural value added (VA) and productivity Share of agriculture in GDP (percent) Growth of real agricultural VA (percent) Agricultural VA per employed (current USD) Growth of real agricultural VA per employed (percent) Domestic TOT – ag./non-ag. (1998=100) Agricultural Employment Employment in agriculture (million) Employment share of agriculture (percent) Rural unemployment rate (percent) Agro-food trade Agro-food imports (USD billion) Agro-food exports (USD billion) Import coverage ratio of agro-food exports Share of agro-food imports in total (percent) Share of agro-food exports in total (percent)

1998–99

2000

2001

2002

2003

2004

2005

2006

2007

2008e

257 n.a. 4,061 n.a. 69.3 7.2 16.8 10.4 61.9 113.3

266 4.9 4,112 2.9 39.0 6.5 20.5 10.5 51.0 103.0

195 –5.7 2,978 –6.9 68.5 8.4 21.3 16.1 75.7 100.7

231 6.2 3,490 4.8 29.7 10.3 22.3 15.6 69.9 100.1

303 5.3 4,509 3.9 18.4 10.5 22.9 15.6 68.1 100.0

391 9.4 5,744 8.0 9.3 10.3 25.0 16.2 64.8 101.0

481 8.4 6,984 7.0 10.5 10.3 24.3 15.3 62.9 99.7

527 6.9 7,591 6.1 9.7 9.9 26.5 16.2 61.3 95.2

644 4.7 9,120 2.9 8.4 9.9 26.4 16.7 63.1 98.1

730 1.1 10.211 –0.3 10.1 10.3 27.6 18.1 65.4 94.3

12.0 n.a. 3,223

11.9 4.2 3,370

11.6 –8.1 2,079

11.9 9.3 3,135

11.1 –2.2 4,104

10.4 2.7 4,889

10.2 6.6 6,738

9.7 1.3 7,392

8.6 –7.0 8,529

8.9 4.1 9,685

–1.2 92.1

20.1 84.1

–11.8 75.5

18.5 90.0

1.8 94.4

–0.6 96.9

21.5 97.4

15.1 90.5

–5.1 93.4

2.0 97.2

9.0 41.0 3.5

7.8 36.0 3.9

8.1 37.6 4.7

7.5 34.9 5.7

7.2 33.9 6.5

7.4 34.0 5.9

6.5 29.5 6.8

5.7 27.3 6.5

5.6 26.4 6.9

5.7 26.3 7.0

2.5 4.5 1.8 5.8 16.7

3.1 3.6 1.2 5.7 13.0

2.3 4.1 1.8 5.6 13.1

3.0 3.7 1.3 5.8 10.4

4.0 4.9 1.2 5.8 10.3

4.5 6.0 1.3 4.6 9.5

4.6 7.7 1.7 3.9 10.5

5.0 8.0 1.6 3.6 9.3

7.0 9.0 1.3 4.1 8.4

9.9 10.6 1.1 4.9 8.0

Sources: TurkStat, (2009a, 2009b, 2009c, 2009d); CB (2009). Notes: n.a. not available; e preliminary estimates; All GDP figures are 1998-based series; Agro-food trade statistics include all products included in the WTO Agreement on Agriculture (all Chapters from 1 to 24 in Harmonized System, excluding fish and sea products, and including other agricultural primary products).

Table II. Selected transfer indicators to agriculture, 1998–2007. 98–99 Transfers to agriculture (million USD) Total Support Estimate (TSE) 12,991 Total PSE 8,894 Support based on commodity output 7,112 of which market price support 6,956 Transfers to SEEs and ASCUs 3,965 Selected share indicators (percent) Percentage TSE (TSE/GDP) 5.0 Percentage PSE 24.4 Percentage CSE –24.1 Percentage GSSE (GSSE/TSE) 32.0 Research and development/TSE 0.3 Transfers to SEEs/TSE 31.0 Share of transfers from taxpayers in TSE 43.1 Shares of major support categories in total PSE (percent) Share of commodity-based transfers in total PSE 80 Market price support/PSE 78 Payments based on output/PSE 2 Direct income support/PSE 0 Payments based on input use/PSE 20 Source: OECD (2008), CB (2009). Note: e provisional estimate.

2000

2001

2002

2003

2004

2005

2006

2007e

10,334 6,566 5,717 5,360 3,646

3,965 771 440 –15 3,090

8,004 5,958 4,474 4,339 1,927

11,735 10,751 8,890 8,684 853

12,060 11,397 9,333 8,987 526

14,338 12,615 10,424 9,620 1,555

12,595 10,810 7,990 6,786 1,505

14,057 13,438 10,389 8,676 521

3.9 20.2 –20.5 36.5 0.2 35.3 47.1

2.0 3.5 –0.6 80.6 0.7 77.9 96.1

3.5 21.7 –18.3 25.6 0.4 24.1 46.9

3.9 28.4 –26.2 8.4 0.3 7.3 21.6

3.1 26.1 –21.9 5.5 0.2 4.4 23.6

3.0 25.3 –21.3 12.0 0.2 10.8 28.8

2.4 20.3 –14.8 14.2 0.2 12.0 43.8

2.1 21.5 –11.6 4.4 0.2 3.7 49.4

87 82 5 0 13

57 –2 59 9 31

75 73 2 21 4

83 81 2 14 2

82 79 3 15 3

83 76 6 14 3

74 63 11 17 8

77 65 13 15 8

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The distribution of transfers to producers according to the policy tools has not changed much since the 1980s, except in 2001. The share of market price support in PSE is around 80 percent (Table II). The remaining burden falls on taxpayers. Significant shifts continue to occur in this item. The share of payments based on input use in PSE first declined immediately because of the ARIP, and then started to increase due to the shift of DIS payments to input use. In addition, payments based on output (mainly deficiency payments) started to increase in 2004. Although DIS payments had around a 15-percent share in PSE in recent years, the government decided not to allocate any funds for DIS payments in 2008. To sum up, the agricultural subsidization reform program contributed significantly to fiscal stabilization by making the support budget transparent and establishing accountability. Agricultural policies cannot change overnight. However, the goal of achieving better allocation of resources will take time and will require a significant paradigm shift in the minds of the decision makers. The recent shift of policies from decoupled support towards more coupled budgetary transfers with no change to the protection levels indicates that the reform program has terminated without any lasting impact on policy formulation.

INCOME AND EFFICIENCY OF FARM HOUSEHOLDS IN TURKEY Improving efficiency in production has been one of the main objectives of the reform program in Turkey. Although efficiency has been cited in various government documents, the underlying motive has always been to sustain self sufficiency, satisfying the demand by the growing population through increasing production, and hence productivity. However, since productivity was interpreted in a partial sense, the policies implemented have focused on augmenting the yield of arable land. As the country reached the limits of its arable areas towards the end of the 1950s, increasing agricultural output by enhancing the yield of land has been seen as a way to increase the total output. Several support programs have been implemented to encourage farmers to take yield-augmenting measures in production. Thus the problem is generally considered as an engineering one rather than an economic one. Ignorance about the efficiency of the production process as a whole has caused over-use of inputs that are intended to increase land quality, causing misallocation of resources. The preference for output-based deficiency payments over the less distorting subsidies reveals that this view is still dominant in the minds of the policymakers. In addition to self sufficiency, policymakers have also tried to sustain the employment creation capacity of the agricultural sector. Intervention in the output and input markets to keep farm household income at higher levels was the main idea behind this policy. Until 2001, setting up minimum prices for ―critical‖ crops and making support purchases were the core policy tools used. The start of ARIP in 2001 signaled a reform in the support schemes to achieve efficiency in agriculture. The main aim was to break off the link between subsidies and production by giving more weight to direct income subsidy in transfers from the budget. In this section, the efficiency structure of agricultural producers is first exposed. Then we will try to link the variations in efficiency with input utilization and the income composition of farm households.

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Model and Data In mainstream economic theory, efficiency is interpreted as the deviation from a production frontier. In this framework the production frontier corresponds to the production function of the most efficient producer. Distance functions are utilized to measure the deviation of the producers from the frontier . In practice, efficiency measurement requires the estimation of the radial distance of each firm from a production frontier. Thus, the problem consists of two steps: first, a frontier should be estimated (or calculated), and then the distance to this frontier should be measured. The hypothetical frontier can be estimated or calculated by using various methods, under different assumptions and implications. In this paper we will follow the stochastic frontier model developed by Battese and Coelli (1995) to measure the efficiency.+ Accordingly, the production frontier is considered to follow a trans-log§ form. Hence, the efficient frontier is given by

ln Y

0

i

i

ln X i

i

j

ij

ln X i ln X j

v

i 1,..., k

In equation (1), Y is the output level vector and X i is the ith input vector, while i

, and

ij

(1)

j 1,..., k

0

,

i,

are parameters of the frontier to be estimated. The term v represents a stochastic

term that measures the distance of each firm from the efficient frontier. Battese and Coelli (1995) model v as

u,

v

(2)

where is a vector of white noise terms that have a normal distribution of N 0,

2

,

while u is a vector of non-negative random variables that have a truncated normal distribution of N

0

,

l

l

Zl

2 u

. Further, they model u as

T

1

T 2 l 1,..., k ,

2

(3)

where Z l is the lth vector of ―effect variables,‖ which are basically the variables assumed to affect the efficiency, and

0

,...,

l

are the parameters to be estimated. The model

is estimated by maximum likelihood estimation and the likelihood function of the above model can be found in Dudu (2006). The data set from the Quantitative Household Survey (QHS) is used to estimate the efficiencies. The QHS was commissioned by the Treasury and implemented by G&G et al. in 2002 and 2004 to monitor and evaluate the impact of ARIP. We use the data for 3,014 farm See Kumbhakar and Lovell (2000) or Cakmak et al. (2008) for a detailed discussion and analysis. + See Førsund and Sarafoglou (2000) or Cakmak et al. (2008) for a detailed survey of different models. § For a detailed assesment of translog production functions see Boisvert (1982).

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households who were active in both years. The distribution of observations over regions is in accordance with the contribution of the regions to agricultural production. The real value of agricultural output at the farm level in 2004 prices is used as the output variable to estimate the frontier function. Output is evidently higher in the western regions with the exception of Southeast Anatolia. Labor is measured in terms of worker days spent on agricultural production. Labor data is collected in the survey for 2002, while it is calculated for 2004 based on labor requirements from the 2002 survey. The survey conducted in 2004 did not contain labor use questions. Labor use per hectare for each crop in each province in 2002 was used to obtain labor use in 2004. It is assumed that there were no changes in crop- and province-specific labor–land ratios. Labor employment does not change significantly from 2002 to 2004 except for the significant increase in Central East Anatolia (Table III). As expected, labor employment is higher in the regions that are producing labor-intensive crops. The capital variable used in the estimations is calculated as the sum of the total operating costs. Although it does not exclude machinery and infrastructure, it can be thought of as a proxy for the total capital. Land, on the other hand, is the total cultivated area in hectares. The area of cultivated land in East and West Black Sea, Central and Central East Anatolia declined significantly from 2002 to 2004. The overall decline is rather moderate. Mean values of the effect variables can be found in Table IV. The share of agricultural income and subsidies in total household income slightly increased from 2002 to 2004. Agricultural income constitutes a higher part of household income in the Southeastern and Mediterranean regions while wage income is the major source of income in the Black Sea regions. Subsidies consist mainly of the money distributed to farmers within the framework of ARIP. There is a high variation in the share of subsidies in total income. More than 17 percent of income in West and Central Anatolia is from subsidies. However, this figure is as low as 4.5 percent in the East Black Sea region. In the Central and West Anatolia regions, the number of farmers who cultivate more than 10 hectares is significantly higher than that of small farmers. On the other hand, there are more small farmers in Black Sea. Correlation between land size and subsidies received is 0.28 for 2002 and 0.55 for 2004, which shows that larger farms benefited from subsidies more. The share of wage income, on the other hand, declined by around 2 percent. The number of households in smaller farm sizes increased. The number of households in the 0–5 hectare group increased by 7 percent while the number of households in the other two groups declined by 6 percent. Numbers of livestock are measured in terms of bovine units, and show the average livestock herd size. Livestock herd size declined in the eastern parts of the country while it increased in the western parts. The overall effect was an increase. Close analysis of the data shows that the increase is due to ovine holdings (Cakmak et al., 2008). The share of rented land was about 8 percent and did not change much between 2002 and 2004. Sharecropped land turns out to be quite low, with 4.02 percent in 2002, and it declined further to 2.25 percent of total cultivated land in 2004, indicating the insignificance of sharecropping in agricultural production. Sharecropping is relatively more prevalent in Central and West Anatolia. The share of field area, on the other hand, declined slightly—by The representativeness of this survey data is tested in Cakmak et al. (2008).

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about 4 percent. The share is significantly higher in the southern part of the country, while it is significantly lower in the Aegean and East Black Sea regions.

2004

2002

Table III. Mean values of output and input variables. NUTS-1a TR2 TR3 TR4 TR5 TR6 TR7 TR8 TR9 TRA TRB TRC Turkey TR2 TR3 TR4 TR5 TR6 TR7 TR8 TR9 TRA TRB TRC Turkey

number of households 365 505 272 179 357 238 363 336 75 94 230 3,014 365 505 272 179 357 238 363 336 75 94 230 3,014

Output (TL) 8,099 7,531 6,833 7,865 10,390 6,213 4,436 2,976 3,156 3,024 6,695 6,598 7,389 21,575 6,262 7,002 9,073 6,130 3,500 2,283 2,228 3,381 4,307 8,215

Labor (worker day) 72 144 97 108 133 44 98 74 48 87 87 98 71 137 84 109 127 40 88 75 44 102 77 93

Capital (TL) 4,887 3,491 4,165 5,488 5,989 4,556 2,462 811 2,626 1,925 3,475 3,749 5,796 4,907 5,137 7,951 6,465 5,310 2,330 765 3,643 1,573 3,942 4,451

Land (Ha) 12 7 11 19 11 25 7 5 20 15 16 12 11 7 10 21 11 21 6 2 20 12 15 10

Source: Author‘s calculations from G &G et al. (2003 and 2005). Note: a NUTS-1 stands for Nomenclature of Territorial Units for Statistics (NUTS) at the first level. It is used in defining regions in the EU. NUTS-1 Regions of Turkey are: TR1: Istanbul (not included); TR2: West Marmara; TR3: Aegean; TR4: East Marmara; TR5: West Anatolia; TR6: Mediterranean; TR7: Central Anatolia; TR8: West Black Sea; TR9: East Black Sea; TRA: Northeast Anatolia; TRB: Central East Anatolia; TRC: Southeast Anatolia.

Money spent on inputs increased significantly in real terms from 2002 to 2004. Major increases occurred in the costs of irrigation and fertilizer. Only seed and oil expenses declined between 2002 and 2004. Fertilizer, oil, and fodder were the leading cost items. The share of all inputs increased at the expense of the shares of seeds and oil. The descriptive statistics construct a picture that is consistent with the conventional conclusions about agriculture. The western and southern regions produce more by employing more inputs compared with the eastern regions of the country.

Findings of the Efficiency Analysis Estimation results yield important conclusions about agricultural production and its efficiency (Table V). They indicate that there is significant inefficiency in agricultural production, and that it can be modeled as a stochastic term.

Table IV. Mean values of effect variables according to NUTS-1 regions.

2004

2002

Share in Total Income (%) Farm Size Cash Costs (TL) Farm Wage Incom Subsidi incom 0–5 5–10 10+ Live NUTS-1a e es e Ha. Ha. Ha. stock Fertilizer Seed Pesticides TR2 69.66 8.69 17.78 82 101 137 2.70 997 312 206 TR3 68.35 7.16 17.23 155 153 103 1.45 531 172 322 TR4 62.31 8.64 22.87 69 79 76 2.66 747 269 236 TR5 65.14 17.04 12.87 18 35 119 1.31 1,180 442 184 TR6 70.33 6.95 15.52 109 82 102 1.17 1,472 1,063 759 TR7 59.18 17.88 16.11 23 50 163 2.33 1,348 193 149 TR8 52.59 7.87 32.68 132 106 75 2.22 479 236 176 TR9 47.43 4.46 44.04 108 36 14 1.15 329 25 53 TRA 69.98 13.65 12.58 7 12 49 4.16 334 222 34 TRB 64.70 13.08 11.04 18 15 50 3.03 314 104 59 TRC 70.81 14.95 8.70 45 54 110 1.06 807 408 275 Turkey 63.17 9.61 21.14 766 723 998 1.88 802 329 264 TR2 73.82 8.78 13.74 94 101 123 2.95 1,962 152 352 TR3 70.53 7.81 18.73 163 155 93 1.70 869 173 512 TR4 67.92 7.84 20.16 75 69 75 2.14 1,425 149 571 TR5 63.56 18.26 13.38 20 35 121 2.69 1,640 570 295 TR6 74.24 7.05 14.12 104 74 108 1.30 1,917 717 746 TR7 64.27 18.27 15.12 30 43 161 2.50 1,720 205 319 TR8 60.42 9.09 28.63 139 89 57 1.95 675 69 232 TR9 53.83 6.12 37.24 111 26 7 0.86 385 13 27 TRA 69.26 13.60 8.92 10 15 45 3.84 766 216 59 TRB 70.14 14.67 14.11 22 14 42 4.03 469 38 247 TRC 66.77 16.14 15.63 58 55 97 1.65 1,484 249 321 Turkey 66.81 10.25 19.74 826 676 929 2.02 1,243 231 376 Source: Author‘s calculations from G &G et al. (2003 and 2005). Note: a For the names of NUTS-1 Regions see Table III.

Share in Total Land (%) Irrigation 48 188 143 408 273 67 51 4 86 26 133 132 75 374 248 679 425 267 114 35 428 0 171 247

Diesel 1,118 922 1,231 1,765 1,214 1,642 705 56 903 386 658 955 1,064 974 1,012 1,953 870 1,424 636 35 581 351 509 860

Electricity 55 108 123 224 58 62 20 13 13 25 163 78 44 134 33 615 117 60 18 1 76 3 200 106

Fodder 1,054 497 564 499 418 319 276 227 252 346 205 457 1,186 636 760 747 344 362 250 119 608 286 314 524

Other 1,085 745 841 767 721 749 510 100 762 650 809 696 950 1,227 929 1,429 1,318 932 331 147 888 167 679 854

Rented 16.55 16.01 9.86 11.40 17.07 15.47 7.52 0.40 13.32 11.56 8.01 12.84 5.94 19.63 12.66 13.87 20.54 14.62 7.46 1.52 20.54 3.83 6.42 13.91

Sharecropping 1.29 3.53 5.77 8.93 2.97 6.08 1.54 3.17 0.39 0.32 4.23 4.02 1.22 3.32 0.90 2.82 1.28 4.07 3.03 1.70 0.93 0.00 2.28 2.25

Field Crops 87.85 80.80 58.93 80.26 90.10 79.81 74.01 36.90 82.58 83.99 91.13 75.89 83.90 74.06 60.63 70.42 78.79 77.53 73.99 40.23 70.63 82.60 85.78 71.95

Orchards 3.66 12.34 13.30 0.05 3.02 0.04 13.80 64.49 0.00 2.35 2.48 6.58 4.43 14.83 14.03 0.05 2.31 0.04 9.76 72.37 0.89 3.01 2.34 6.51

Irrigated 9.28 38.83 24.97 17.72 52.42 6.43 24.57 0.17 16.08 19.20 22.23 21.92 5.94 43.62 26.28 22.08 42.32 4.44 18.90 2.30 31.67 13.45 19.47 21.77

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Further, most of the selected effect variables are successful in explaining the farm-level technical efficiency. As expected, the time variable is not significant, due to the availability of data for only two years. Although both years are reported in the findings below, this point should be kept in mind. However, the data are rich enough to provide an efficiency map of Turkish agriculture. In addition, the analysis allows us to identify the relative weights of possible impact variables on efficiency. We have also found that the trans-log production function is more suitable to the data. Various tests were conducted on the model, and the test results can be found in Table VI. Capital is the most important production factor in agriculture, with an output elasticity close to 0.4. Land and labor elasticities are around 0.2. The coefficients of capital are significant, and they indicate that production increases at an increasing rate as capital increases. The increase in labor employment hampers the effect of the increase of capital on production, which is consistent with the conventional observation of over-employment in agriculture. The interaction of labor with land, on the other hand, is positive, and labor and land increase each other‘s contribution to agricultural production. Figure II shows the mean efficiencies according to regions. Efficiency falls over time in all regions except the Mediterranean, Central and Central East Anatolia. Efficiency declines through the eastern and northern parts of the country. This conclusion is also verified by significant coefficients of region dummies in estimation results. Coefficients of eastern regions become positive, indicating a negative relationship with efficiency. The highest efficiency scores are observed in the southern and western coastal regions. Figure III shows the mean efficiencies of households measured in agricultural income percentiles. There is a positive relationship between agricultural income and efficiency, which is also verified by estimation results. The causality can be in both directions. Firstly, more efficient farmers are more likely to produce more. Secondly, earning a higher income from agricultural activity induces farmers to take efficiency-augmenting measures in production. In both ways, efficiency turns out to be a key factor in increasing the income of farm households, and hence in the fight against rural poverty. Figure IV exposes the relationship between efficiency and the share of agricultural income in total income. According to this graph, when the share of agricultural income in total income is either too low or too high, efficiency is lower. The highest mean efficiency is observed in the interval 70 to 85 percent in 2002, and 85 to 90 percent in 2004. This leads to the conclusion that the effect of agricultural income is not independent of overall income. If agricultural income has a small share in total income, the farmer becomes relatively inefficient. If the major income source of the farmer is agricultural activity, this can be because overall income is lower, which prevents farmers taking necessary measures to operate efficiently. Figure V illustrates the relationship between subsidy received and efficiency. Subsidies here refer to direct transfers to farmers from the budget. They include DIS, diesel, fertilizer, alternative crop and deficiency payments. There exists a positive relationship between subsidies and efficiency. However, this relationship seems to be weaker compared with agricultural income. Peculiarly, households receiving lower subsidies are less efficient. However, the rate of efficiency gain also declines as the amount of subsidy increases.

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Table V. Estimated coefficients of frontier and efficiency effect variables.

Variable Frontier parameters

Constant Share in Total Income (%) Region dummies

Farm Size Inputs Cash costs

Share in total land (%)

Education dummy Other effect variables Variance Parameters Log-likelihood

Constant Labor Capital Land Labor square Capital square Land square Labor × capital Labor × land Capital × land Farm income Subsidies Wage income West Marmara Aegean East Marmara West Anatolia Mediterranean Central Anatolia West Black Sea East Black Sea Northeast Anatolia Central East Anatolia 0–5 Ha. 10+ Ha. Labor Livestock Land Fertilizer Seed Pesticide Irrigation Oil Electricity Other Fodder Rented Sharecropping Field area Irrigated land Orchards Primary – High School – Credit usage Time Time square Sigma square Gamma

Coefficient 8.62 0.23 0.37 0.20 –0.01 0.05 0.01 –0.01 0.02 –0.01 –3.32 –5.43 2.47 5.84 –4.74 –0.79 0.20 3.87 0.29 0.72 0.47 2.54 5.25 –0.18 1.06 –0.67 0.31 –0.88 –0.75 –0.59 0.24 –0.08 –0.09 –0.39 0.39 0.12 0.23 0.51 –2.55 –3.83 –0.71 –7.01 1.08 0.71 0.69 –1.60 1.85 13.69 0.97 –8760.64

Source: Author‘s calculations from G &G et al. (2003 and 2005).

Standard error 0.02 0.01 0.02 0.02 0.01 0.00 0.01 0.01 0.01 0.01 0.88 0.82 0.88 0.89 0.45 0.44 0.61 0.62 0.57 0.63 0.42 0.54 0.57 0.96 0.43 0.45 0.09 0.11 0.18 0.04 0.03 0.04 0.04 0.03 0.04 0.03 0.02 0.86 0.93 0.45 0.39 0.75 0.44 0.41 0.38 0.90 0.32 0.81 0 –

t-Value 441.74 16.38 24.59 11.98 –1.22 14.98 0.99 –1.51 1.87 –0.56 –3.76 –6.64 2.82 6.59 –10.51 –1.82 0.33 6.29 0.52 1.14 1.12 4.66 9.20 –0.19 2.46 –1.49 3.36 –8.30 –4.20 –14.89 8.05 –2.21 –2.36 –11.42 10.27 3.55 9.47 0.60 –2.75 –8.45 –1.82 –9.38 2.44 1.75 1.82 –1.77 5.76 16.87 388.07 –

** ** ** ** **

** ** ** ** ** **

** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** ** **

** ** ** –

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Table VI. Tests conducted on estimation results.

Test

H0

LR test statistics

df

Critical Result value at 5% confidence interval

2519

2

5.99

Reject

86.11

2

5.99

Reject

728.11

38 53.38

Reject

6

12.59

Reject

1

3.84

Reject

Existence of technical inefficiencya

Time invariant efficiency

t

Significance of Z variables

i=0

for all i Cobb Douglas specification

ij 325.72 for all i and j

Constant returns to scale

114.61

Source: Author‘s calculations from G&G et al. (2003 and 2005). Note: a Test statistic has a mixed chi-square distribution

Source: Author‘s calculations from G &G et al. (2003 and 2005). Note: For the names of NUTS-1 Regions see Table III. Figure II. Mean efficiencies according to regions.

The interaction between the share of subsidy in total income and efficiency is further supported in Figure VI, which shows the relationship between efficiency and share of subsidies received in total income. When subsidies are very low, or relatively high, compared with total income their effect on efficiency becomes limited. Hence, the design of subsidy programs should take this fact into consideration. Farmers who do not receive subsidies are

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inefficient, as seen in Figure V. However, increasing the share of subsidies in total income is also not an efficiency-improving policy. Wage income forms about 20 percent of the total income of farm households (Table IV). The share of wage income in total income varies depending on the region and reaches higher values in the northern regions. Specialty crops (hazelnuts, tobacco, etc.) are dominant in these regions, and yields in bulk commodity production are low. This situation is also reflected in the relationship between wage income and efficiency. Estimation results suggest that the share of wage income has a negative effect on efficiency. Figure VII shows that efficiency scales down at high levels of wage income.

Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure III. Mean efficiencies according to agricultural income percentiles.

Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure IV. Mean efficiencies according to percentiles of share of agricultural income in total income.

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Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure V. Mean efficiencies according to percentiles of subsidy received.

Figure VIII compares the efficiency levels of farm households grouped according to various characteristics. Industrial crop producers are the most efficient group of farmers and they are followed by the fruit producers. The positive effect of education on efficiency can clearly be seen in Figure VIII. The efficiency performance improves as the education level of the household head increases. We also see that big farmers are more efficient than smaller ones, and that farmers who are using credits and receiving DIS payments are more efficient than those who are not.

Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure VI. Mean efficiencies according to percentiles of share of subsidies received in total income.

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Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure VII. Mean efficiencies according to wage income percentiles.

Source: Author‘s calculations from G &G et al. (2003 and 2005). Figure VIII. Comparison of mean efficiencies of different household groups.

The increase in the average farm size improves the efficiency of farm households. Although the survey data cannot provide definite results on the efficiency impact of the change in policy tools in supporting agriculture, since the data available only cover two years, it identifies several clues for the formulation of efficiency-improving agricultural policy.

CONCLUSION ARIP was considered as the start of a process of reforming agriculture, not only by decreasing the fiscal burden of the budgetary subsidy, but also by increasing the weight of market-friendly elements in the formulation of agricultural policy for the future. Only seven

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years have passed since the implementation of the reform program, and the shortness of this period makes it impossible to isolate the impact of policy changes from the stable macroeconomic environment. The availability of data at the micro level for only a limited number of years restricts attempts to fully identify improvements in the allocation of resources. The reform program has never been implemented as was intended at its launch. For instance, DIS was the major policy tool of the reform, but yearly DIS payments have never been paid in full. DIS payments were eventually tied partly to input use. Output-based deficiency payments gained importance in budgetary transfers without any accompanying decrease in protection for highly protected crops such as cereals. Expected welfare gains that might have occurred with the transition from border protection to deficiency payments have not been realized. One obvious benefit of the agricultural subsidy reform program has been its significant contribution to fiscal stabilization by making the support budget transparent and establishing accountability. The share of the transfers from the budget in total transfers declined between 2003 and 2005, but in 2006 and 2007 it increased back to the levels of shares in the mid 1990s (OECD, 2008). The same trend is observed in the real value of budgetary transfers to agriculture. Budgetary transfers peaked in 1997–2000. The levels in 2006–2007 are almost on a par with the levels in the mid 1990s. The upward trend started again in 2004. It seems that the savings impact of the reform on the budget had a short life. Efficiency estimations show that there is significant inefficiency in agricultural production. As expected, the change in efficiency between 2002 and 2004 is not statistically significant. Efficiency analysis provides important clues about the relationship between efficiency and several characteristics of farm households. The farms in the northern and eastern regions are relatively less efficient compared with their western and southern counterparts. Efficiency performance of farms improves as the scale of operation increases, both in terms of area and of income from agricultural activities. On average farm households gain about 65 percent of their total income from agricultural activities. Variations in this share have differentiated impacts on efficiency. The efficiency scores of farmers around the average are higher compared with those whose shares are at the extremes. There exists a positive relationship between subsidies received and efficiency, but two points are worth emphasizing. First, the positive relationship between efficiency and subsidies received is weak compared with agricultural income. Secondly, efficiency declines as the share of subsidies in total income increases. The farm households producing export-oriented crops and using credits have relatively higher efficiency. Industrial crop producers score substantially higher in efficiency compared with the rest. Fruit and vegetable producers follow the industrial producers in descending order. Cereal producers are relatively less efficient. As expected, efficiency scores improve as the educational level of the farmer increases. A high level of efficiency is necessary to achieve competitiveness and to increase profitability in agriculture. Efficiency also has direct implications for the welfare of society. A low level of average efficiency scores implies that significant gains can be achieved by gearing policies towards the factors that may improve efficiency in agricultural production. The results of analysis indicate that farm size (measured in area or income), access to credit, education and technical assistance will have significant impact in improving efficiency. ARIP

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tried to accomplish this through more market-friendly subsidies. Complementary policies would have been necessary for it to be successful in the medium and long run. Unfortunately, the policy framework was not enlarged; on the contrary, a policy backlash occurred, which shifted almost all budgetary transfers to output-based subsidies. Policymakers in Turkey are faced with two critical challenges, which require a significant increase in analytical contributions, in both quantity and quality, to support the decision making process. The first of these challenges is to address the structural problems in agriculture that are related to the use of basic factors of production (land, labor, capital, and knowledge) in agriculture. Secondly, impetus for further reform of agricultural policies is coming from several directions. Before it is too late, Turkey should start to examine adjustment issues related to potential EU membership (or the expansion of the Customs Union decision to agricultural products) and further liberalization of trade through the delayed Development Round of WTO negotiations (see Chapter 18 by Haeberli). In particular, the adjustment demands closer scrutiny of the impacts of the policies on efficiency and equity. An important prerequisite to ensuring the supply of research relevant to policy is the timely availability of high quality data at all levels. This chapter has been an attempt to summarize the basic characteristics and relative efficiency of farm households in Turkey, complemented by sectoral developments and support measures. Identification of interactions at the micro, sectoral and macro levels is bound to affect the contribution of the sector to the economic and social development of the country. Continued efforts towards the provision of the necessary information will certainly help in discovering the relative importance of the basic factors required for the development, packaging and sequencing of agricultural and rural development policies.

REFERENCES Battese, G. E. & Coelli, T. J. (1995). A model for the technical inefficiency effects in a stochastic frontier production function for panel data. Empirical Economics, 20, 325–332. Boisvert, R. N. (1982). The Translog Production Function: Its Properties, its Several Interpretations and Estimation Problems. Ithaca, NY: Cornell University. Cakmak, E., Dudu, H., & Ocal, N. (2008). Turk Tariminda Etkinlik : Hanehalki Duzeyinde Nicel Analiz (Efficiency in Turkish Agriculture: Quantitative Analysis at Household Level). Ankara: TEPAV Yayinlari. Cakmak, E. H., & Akder, H. (2005). Turkish Agriculture in the 21st Century with Special Reference to the Developments in the WTO and EU. Istanbul: Turkish Industrialists‘ and Businessmen‘s Association (TUSIAD) Publication No. T/2005–06/397. CB (Central Bank of the Republic of Turkey) (2009). Exchange rates, electronic data delivery System. http://evds.tcmb.gov.tr/ . Dudu, H. (2006). Efficiency in Turkish agriculture: A farm household level analysis, M.Sc. Thesis, Department of Economics, METU, Ankara. Førsund, F. R., & Sarafoglou, N. (2000). On the origins of data envelopment analysis. Memorandum Series of University of Oslo, Department of Economics. Oslo: University of Oslo.

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G&G Consulting, Baskent University Development Foundation, & TNS Siar JV (2003). Agricultural reform implementation project: Consulting services for quantitative household survey, QHS Database-2002. Ankara. G&G Consulting, Baskent University Development Foundation, & TNS Siar JV (2005). Agricultural reform implementation project: Consulting services for quantitative household survey, QHS Database-2004. Ankara. Kasnakoglu H., Cakmak, E. H., & Akder, H. (1999). A Search for New Balances in Agricultural Policies: The Case of Turkey. Istanbul: Turkish Industrialists‘ and Businessmen‘s Association (TUSIAD) Publication No. T/99-12/275. Kumbhakar, S. C., & Lovell, C. A. K. (2000). Stochastic Frontier Analysis. Cambridge: Cambridge University Press. Lundell, M., Lampietti, J., Pertev, R., Pohlmeier, L., Akder, H., Ocek, E., & Jha, S. (2004). TURKEY, A Review of the Impact of the Reform of Agricultural Sector Subsidization. Washington, D.C: World Bank. OECD (2008). Producer and consumer support estimates, OECD Database 1986–2007. Paris: OECD. TurkStat (Turkish Statistical Institute) (2007). Agricultural structure: Production, price, value [Data files]. Obtained from TurkStat, http://tuik.gov.tr/. TurkStat (2009a). National accounts statistics. http://tuik.gov.tr/. TurkStat (2009b). Household labor force survey statistics. http://tuik.gov.tr/. TurkStat (2009c). Foreign trade statistics [Data files]. Obtained from TurkStat, http://tuik.gov.tr/. TurkStat (2009d). Consumer price index (CPI). Inflation and price statistics. http://tuik.gov.tr/. Voyvoda, E. & Yeldan, E. (2006). Macroeconomics of twin targeting in Turkey: A general equilibrium analysis, Working Paper. http://www.bilkent.edu.tr/~yeldane/ econmodel/ Voyvoda&Yeldan_AltIT-Turkey_2006.pdf. World Bank (2001). Agricultural reform implementation project, PID, http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/08/18/00009494 6_00081705310273/Rendered/PDF/multi0page.pdf.

In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 6

THE LOGIC OF NEOLIBERAL AGRICULTURAL REFORM INITIATIVES: PERSPECTIVES AND CONSEQUENCES 1

Koray Caliskan1 and Fikret Adaman2 Department of Political Science and International Relations, Bogazici University, Turkey 2 Department of Economics, Bogazici University, Turkey

ABSTRACT The main presumption of neoliberal thought is that a clear boundary exists between economic forces and all other socially, culturally, and politically determined ones, and markets—if set free from the market-distorting effects of non-economic interventions— should be able to bring about economic prosperity. This chapter is a head-on theoretical challenge to the plausibility of that presumption. We argue that assumed market characteristics that facilitate economic analysis—such as information or rationality—are indeed highly relative and contextual, and thus that relying on the market mechanism alone as the only societal institution capable of organizing economic life is naïve if not ill-fated. Our position is formulated on four clusters of research conducted on general and agricultural matters: price realization; commodity quality; the nature of exchange and production relations; and the relationship between global and domestic markets. In conclusion, we note that these findings require a fundamental change in the way policy circles and researchers approach the market.

INTRODUCTION ―Developing corporate awareness in agriculture … is a must for Turkish agriculture‖ Agricultural Reform Implementation Project (ARIP, 2009) This chapter takes the position that when humanity entered the 21st century with a global drive to develop markets and boost prosperity, we did so with an underdeveloped

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understanding of how markets actually work. Thus predictions of how market euphoria may well bring about misery and destruction—for at least some of us—remain elusive. Ever since neoliberal hegemony became institutionalized in global policy circles circa the 1970s, largely fueled by the dissatisfaction with post-World-War-II technocratic and paternalistic governance modalities, no other industry has attracted more radical schemes for economic reform than has agriculture. Parallel with structural adjustments now a quartercentury old, a worldwide revolution took shape in the global countryside. For the first time in history, farmers ceased to be the largest working population on earth. According to the latest available International Labour Organization (ILO, 2009) figures, as of 2008 farmers constitute 33.5 percent of the world‘s working population, whereas service sector employees and industrial workers represent 43.3 and 23.2 percent, respectively, of the global working class. There is now consensus that neoliberal policies made a radical impact on this (ongoing) shrinkage. Developing markets in agriculture entailed, above all, displacing farmers in rural areas— and more acutely so in developing countries. Releasing farmer communities from the hard work of agriculture is not itself a problem; indeed, it may even be a desirable policy option, as anyone moderately familiar with the countryside would easily acknowledge how demanding life on a farm can be. However, this global loss of livelihood emerged at a time when job creation in services and industry failed to match rising unemployment resulting from the dissolution of the countryside—thus aggravating the interrelated problems of poverty, unemployment, social exclusion, and human trafficking, to say the least. 22nd-century historians will find it extremely difficult to comprehend just how policy circles worldwide entered such an economic cul-de-sac on a global scale. In our opinion, the answer lies in understanding the philosophy of neoliberalism. Neoliberal economic thinking draws on a social theory that promises to grasp complex human behavior and institutions based on a simple assumption: the social is the sum of unplanned consequences produced by planned and purposeful actions of individuals who are assumed to have entrepreneurial capability to enhance their prosperity. The flip side of the coin notes that any societal attempt to coordinate the behaviors of individuals in an ex-ante sense is futile, since it is a priori accepted that no one can access all available information regarding the planning of general interaction among individuals. Any general plans or interventions in the ways in which individuals economically interact with each other, even with the best intentions, will result in an inefficient configuration of the relations of economization. The solution for neoliberals is to let individuals plan their own economic world in ways they know best. How these founding assumptions of neoliberal economic thinking translate to political economy is now well known. The market represents the end result of interaction among ―free‖ individuals. The state needs to refrain from intervening in the market so that it may reach ―its optimum capacity‖ and allocate economic resources ―effectively.‖ The government‘s role in economic matters should therefore be limited to creating conditions for the market to function freely. However, this policy measure, of securing the ―business environment,‖ in itself shows that, even in neoliberal thinking, markets are considered incapable of creating the conditions for this to happen without institutional support—whose stimuli are exogenous to the market. Karl Polanyi (1944:141) was indeed underlining this very fact when he suggested that the

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creation of labor, land and money markets in 19th-century Britain was nothing but the result of deliberate action by the state: ―Laissez-faire was planned.‖ Markets are indeed institutional structures and bound to other structures in myriad ways. Attempts to sever these links and make the market mechanism the dominant and pivotal one are futile in the sense that societies would by and large resist such deconstructions. If truth be told, on examining the consequences of structural adjustment policies in the agricultural sector, the emergence of a puzzling irony would become apparent. Contrary to expectations, recent scholarship has shown that some farmers tend to move not toward the market, but toward increased self-provisioning and protection from neoliberal policies once governments take effective steps toward free market reforms. Furthermore, the literature reveals that structural adjustment programs have been interfering with rural power configurations, and, paradoxically, violating even the neoliberal objective of formalizing market rules. These reforms also created opportunities for a number of informalities that aimed to bypass the logic of markets, and, in addition, reflected a tendency to decrease farmers‘ capacity to undertake autonomous market activities. It appears that the market would be better off without any free market reform in the field. This chapter aims to describe the logic of neoliberal thinking in agriculture, the consequences of neoliberalism, and possible alternatives to neoliberal economic policy in agriculture. A brief account of the logic of neoliberalism in agriculture is presented in the first section. The second section plays an intermediary role by providing a wide palette of neoliberal policies that have been applied in agriculture, so that links may be made to their consequences in the subsequent section. Consequently, the third section discusses at a theoretical level what has been going wrong with the neoliberal understanding of the market in general, and in the agricultural sector in particular. It illustrates how neoliberalism misunderstands the very object of its policy recommendation—the market. The final section wraps up the arguments, and touches upon alternative orientations in agricultural reform.

FRAMING THE PHILOSOPHY OF NEOLIBERALISM IN AGRICULTURE Prior to describing how neoliberalism manifests itself in agriculture, a few introductory remarks are required for clarification purposes. Neoliberalism aims at intensifying and expanding markets by increasing the number and frequency of transactions. The selfmotivated actions of private individuals, conducted in competition with every other individual and influencing every other transaction, are believed to enhance society‘s wellbeing, and promote liberty and order. Support to free trade, liberalized immigration policies, and the mobility of capital, as well as opposition to controls on exchange, prices, rents, and wages, in effect mean limiting the duties of the government, restricting these mainly to the defense of individual property rights. Historically speaking, the Austrian and Chicago schools (best represented by Hayek and Friedman, respectively) played a crucial role in advancing ―free-market‖ economic theory and countering arguments involving planning and government intervention in economic life (Harvey, 2005). More specifically, Hayek positioned himself around the ―tacit knowledge‖ argument, in that people have bits of fragmented knowledge of the world beyond their immediate surroundings, which makes the articulation of tacit knowledge the main problem

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of the economic world. Entrepreneurs compete with one another in the pursuit of private rewards, and the market process results in cases of success or failure; possible outcomes include innovation, prosperity, and the realization of arbitrage opportunities, as well as a learning process for all participants in the competitive struggle. Consequently, knowledge transmission and the provision of incentives emerge as the main functions of the market mechanism. Hayek (1948) suggested that the interaction of decentralized and self-seeking entrepreneurs with limited knowledge would bring about a harmonious and evolving order— hence, the ―spontaneous order.‖ Lavoie (1990:74), a leading figure of the Austrian school, indeed identifies the three ―cognitive functions of markets‖ as being computation, incentives, and discovery, and adds, ―[w]hat is crucial to [the market‘s] cognitive function … is that it provides a discovery process that by its very nature cannot be centrally directed but depends on a bidirectional communicative interplay between its participants.‖ This discovery process is crucial in the Austrian setting because it ―produces a kind of social intelligence that depends on, but goes beyond, the individual intelligence of the system‘s participants‖ (Lavoie, 1990:78). The neoliberal twist in the Austrian approach enters the picture at this very junction, insisting that only the market process, based on the rivalrous interaction of entrepreneurs, can discover and mobilize the potential of tacit knowledge. Proponents of the Austrian school do not deny that the ex-ante coordination of the market mechanism unavoidably brings about inefficiencies; they all claim this is indeed the nature of economic reality. This is aptly put by Kirzner (1988:13): ―To describe the competitive process as wasteful because it corrects mistakes after they occur seems similar to ascribing the ailment to the medicine which heals it, or even blaming the diagnostic procedure for the disease it identifies.‖ Complementary to Hayek, who basically defended an anti-interventionist position, Friedman (1962) called for market mechanisms to be expanded to every possible area of life. The argument here is that if current market mechanisms are unable to deal with an economic problem (say, pollution), the remedy should be to introduce new markets (say, a pollution permit market). Becker (1976), another Chicago affiliate, suggested that all human actions, market and non-market, are in fact the outcome of a continuing process of cost and benefit calculus. For instance, according to Beckerian thinking, we all calculate the benefits of conducting a crime (say, theft) and the probability of getting caught and subsequently punished; those who compute a positive net value would be involved in crime, and the rest not. This hypothetical situation tells us that all actions are, in effect, transactions; people are interacting with one other on a contractual basis. Neoliberalism can therefore be seen as a philosophy where the existence and operation of market structures are intrinsically valuable. The corollary of this vision is that the operation of a market formation is seen capable of acting as a guide for virtually all human actions. But for market structures to function as they should, we need also to return to a primitive form of individualism; one that is both competitive and possessive. Ultimately, both the Austrian and the Chicago versions of neoliberal thinking involve, as nicely put forth by Peters (1999), ―an emphasis on freedom over equality, where freedom is construed in negative terms and individualistic terms.‖ Negative freedom is freedom from state interference; and it implies, by default, an acceptance of inequalities created by the market. Contextualized in a historical perspective, neoliberal ideologies gained dominance in the late 1970s under the conservative Thatcher and Reagan governments, at a time when the discontent felt by the large majority with the omnipresence and clumsiness, if not corruption,

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of most social-democratic governments was at its zenith. Consequently, many people rather dissatisfied with technocratic or paternalistic governance modalities, largely corresponding to post-World War II governments in Europe, opted for neoliberal policies as a means to search for an alternative path that would hopefully bring about self-realization at the individual level, and innovation and efficiency at the macro level. In agriculture, more specifically, neoliberal thinking prescribed a few key policy measures: deregulate crop and input prices; abolish farmer subsidies; cut technical assistance, transport, processing, and marketing services; and allow the market mentality to dominate the whole range of societal networks in the industry. Hence, once deregulation became the norm and private enterprise the form, farmers and traders would move toward the market, which would in turn promise an increase both in agricultural exports and in economic growth. Before beginning our inquiry into how neoliberal thinking shaped agricultural policies worldwide, it might prove beneficial to revisit the reasons why it was initially thought to be necessary to curtail market logic in the agricultural sector. In considering the basic reasons, intervention is deemed important, first of all, in order to increase productivity, by promoting technical progress as well as ensuring an effective and productive use of the factors of production. Guidance is also crucial in stabilizing markets, where the supply side is very much dependent on the weather conditions and thus uncertain. Furthermore, as most of the commodities produced in agriculture are of primary importance, it is vital to secure their minimum availability for the wellbeing of the society at large. Finally, a fair standard of living for the agricultural community needs to be ensured if we are to stick to even a minimum degree of social justice. It thus becomes imperative to ask ourselves why we felt the need to abort our initial aims—to provide farmers with a reasonable standard of living and consumers with quality food at fair prices while preserving our rural heritage. To examine this question, we need first to look at how the neoliberal ideology and its rationales are manifested in agriculture. Next, we will attempt to see whether neoliberal policies in agriculture draw on an erroneous understanding of how markets work in the field, seeing markets as the idealized and undertheorized relationship of buyers and sellers.

NEOLIBERALISM APPLIED IN AGRICULTURE It is ironic that most neoliberal policies were implemented during the 1970s and 1980s by authoritarian, if not totalitarian, governments. The events that unraveled in Turkey may be considered a case in point, where the structures of political opportunity that made an almost uncontested neoliberal reform possible were, interestingly, created by a most illiberal political measure—the coup d’état of September 12, 1980. A quick peek at history books reveals that in 1983, in a political context where all previous political parties, left-wing trade unions, and political organizations were dissolved, Turgut Ozal founded the Motherland Party and won a landslide victory. The implementation of neoliberal economic policies followed and encountered no organized dissent, representing a clear break from the Keynesian import substitution period and proclaiming the coming of neoliberalism in Turkey (Onis and Senses, 2007).

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The irony is in a sense understandable, since workers and farmers in general anticipated that income and asset distribution would worsen once the implementation of neoliberal policies began, and most did not wish to find themselves trapped in poverty in exchange for a small chance of becoming much richer. Yet, as mentioned above, there was also salient support for neoliberal policies, as these were viewed as the only alternative to the top-down, and to some extent corrupt, policies of the era. Let us now focus on agriculture. Although variations exist among different countries, neoliberal policies worldwide aimed to drastically reduce artificial incentives and government subsidies, and to replace them with a support system that would give agricultural producers and the associated industry incentives to boost productivity in response to real comparative advantages. Besides promoting efficiency, the implemented reforms were claimed to be necessary for fiscal stabilization as well. Complete trust in the market mechanism was and still is the starting point of all ―reform‖ initiatives. Turkey‘s Agricultural Reform Implementation Project (ARIP), which was promoted and guided by the World Bank, may be considered a typical ―reform‖ step. As some chapters in this volume discuss thoroughly (see Chapter 4 by Akder; Chapter 5 by Cakmak and Dudu), its first official application involved phasing out the ―unsustainable‖ and ―distortionary‖ system of subsidies for fertilizer, credit, and price supports, to ―link prices to world market prices.‖ Here the main official reference was to the sum of USD 6 billion spent annually as subsidies; the Bank also underlined the necessity of eliminating the distortionary incentive system created under the subsidy scheme. However, more important, at least for the Bank, was the attempt—though it was never officially proclaimed—to escape the patronage-based agricultural policies of previous consecutive governments. Instead of subsidies, a unified national program of direct income support (DIS) was to be introduced. The officially-stated intention was not to compensate every farmer fully for income lost by removal of the old subsidy system, but rather to cushion short-term losses and continue to provide adequate support to the agricultural sector, yet in an incentive-neutral manner (per-hectare payments with a cap). Consequently, a National Registry of Farmers was launched to identify farmers eligible for DIS payments. The second element of the program aimed to transform the quasi-governmental sales cooperative unions previously used to administer support prices into organizations ―dedicated to serving their farmer members through a process of restructuring and privatization‖ (ARIP, 2009). This was undertaken with the hope of eliminating government involvement in the marketing and processing of agricultural products. The third and final initiative under the program aimed to encourage farmers to refrain from growing crops that were being produced in great excess, by offering grants to cover the cost of switching to alternate activities. Taking the elements in totality, therefore, the logic has been to gradually transform the agricultural sector into a fully marketized one, and let the international and national competition do the job. Neoliberal policies have also had important implications for land use. Here, too, the argument was the creation and consolidation of ―economically efficient‖ and ―competitive‖ farms based on private ownership, with unquestionable belief in the driving force of private incentives. It was suggested that the way to put this policy into operation would be the privatization of public or communal lands (including those lands used by indigenous communities) as well as the promotion of share tenancy or land rental arrangements throughout agricultural practices (for a critical analysis, see Akram-Lodhi and Kay, 2008).

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The underlying assumption here was that individual private landowners would use clearly defined legal land titles as collateral to secure bank loans, promoting prosperity in the agricultural sector through the injection of capital into the production process. The increasing capital inflow to the countryside was argued to add value by stimulating capital accumulation and reducing poverty (World Bank, 2009). These policy prescriptions, in total, aspire to homogenize property rights in the world today, transform farmers into privatized and individualized economic agents, instigate private capital accumulation in the rural economy, and expand market rationality further in the agricultural sector. Here we observe that (as in other neoliberal projects—see Madra and Adaman, 2009) efficiency trumps fairness, market failures are preferred to government failures, public ownership is considered a vice, and unabashed individualism is celebrated; in this setting to talk about rural society as an ontological entry point will of course be futile. Market-led agrarian reforms have gained prominence worldwide since the late 1980s as an alternative to the state-led approaches widely implemented over the course of the 20th century. Through policies aiming at securing and formalizing private property rights in urban areas, removing various ―distortions‖ from land and agricultural markets, and introducing a calculative rationality, neoliberal policies have been operational in developing as well as developed countries, with some inevitable differences in emphasis. After two decades of the introduction of neoliberal policies in agriculture, it is time now to engage with an overall evaluation of such policies—an engagement that will certainly have implications for Turkey as well. To be fair, however, the original neoliberal critique of stateled interventionist policies in the agricultural sector must be kept in mind: lack of innovation, efficiency problems, over-bureaucratization, and the existence of corruption.

PROBLEMS AND CONSEQUENCES OF NEOLIBERAL REFORM One obvious way to assess neoliberal ideologies in agriculture would be to evaluate the impacts of relevant policies. Accumulated data are presently available, both qualitative and quantitative, to be employed in line with such evaluations. A critical perusal would easily reveal unfavorable results, including: the monopolization in input commodity production and sales; mounting numbers of informal and illegal lenders in the countryside who are also merchants of agricultural commodities; a growing rate of bankruptcy among small producers; a drastic drop in the rural agricultural population (and in turn migration towards rural parts); an escalating role for supermarkets and their dominance in food chains; and an increase in contract farming and the proletarianization of rural agricultural workers on their own lands— all in all, the realization of the threat to their lives and livelihoods for many landless or landpoor peasants and small farmers. Those in support of such criticisms actually underline the fact that the primary reason many segments of the agricultural sector are impoverished is the lack of democratization of power—that is to say, the inability or unwillingness of big farmers and agribusiness to adjust their positions of power—in the rural sector. This list is by no means exhaustive. However, all these points may be seen as conjectures and thus challenged; and in the final analysis it may easily be argued that these cases are the result of errors conducted during implementation, and thus not to be considered evidence of

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inferiority on the part of neoliberal ideology. Accepting this line of defense as a legitimate one, we therefore choose to challenge neoliberal thinking theoretically. Ironically, the most central weakness of neoliberalism in agriculture is found where neoliberalism claims to be strong in theorizing—namely, the market. Representing the arena where demand and supply come together to set a price, the market is assumed to produce the optimum solution for resource distribution in economic relations. According to neoliberals, the market‘s optimizing function only works if non-market forces, such as the state, do not intervene. Neoliberal thinking in agriculture draws on the assumption that there exists a clear boundary between economic forces and all other socially, culturally, and politically determined ones, and proposes to let the market work effectively by setting it free from the market-distorting effects of non-economic interventions. As mentioned above, letting the market free in agriculture entailed a few key policy measures: the deregulation of crop and input prices; abolition of subsidies to farming communities; discontinuation of price supports and floor price policies; and withdrawal of the state from agriculture. According to the theory, all markets—agricultural or not—have a natural and spontaneous inclination to evolve into perfect, self-regulating ones where resources are distributed efficiently, if not justly (Becker, 1976; Marshall, 1982; Balassa, 1986; De Soto, 1989). Bates, the foremost theorist of third world agricultural reforms, argues that these policy options were derived from ―common sense, the evidence of history, and economic doctrine‖ (Bates, 1981:11). Researchers disagree. Social and historical studies of the market challenge the theoretical foundations of the neoliberal approach to the market in two ways. First, researchers inspired by Polanyi‘s work showed that markets can only operate in a larger social context framed by specific institutional environments. Thus, studying the conditions of possibility that might impact specific market exchange relations is necessary to understand the market. The most important contribution of the Polanyian strand of research was to illustrate that a neoliberal understanding of the market could not account for the conditions that sustain the very free market prescribed. Free markets need non-market forces to work. Polanyi demonstrated that modern markets were constructed as political projects through the commodification of land, labor and money. The social relations of exchange and production were organized increasingly by the economic logic of free markets, and thus were disembedded from society for the first time in history (Polanyi, 1944). Historicizing the neoliberal understanding of the market provided social researchers with a fruitful opportunity to study the contemporary manifestations of markets as they were prefigured by the capitalist expansion of the world economy, as done by Polanyi and others (Arensberg, 1957; Chayanov, 1966; Kaplan, 1968; Dalton, 1971; Sahlins, 1972; Halperin and Dow, 1977; Fried, 1979). In 1985, with the publication of Granovetter‘s famed essay on the problem of embeddedness, Polanyi‘s main historical arguments were dragged onto the research agenda of economic sociology (Granovetter, 1985). Polanyi‘s observation that ―human economy … is embedded and enmeshed in institutions, economic and non-economic,‖ became the entry point to neo-institutionalism in the embeddedness literature (Polanyi, 1968 [1957]:127). According to this new approach, market processes occurred within social networks. These researchers deviated from Polanyi in one crucial aspect. Instead of showing how markets in the capitalist West were disembedded from society, they gathered an increasing number of empirical studies to underline the fact that all markets—whether in the West or the rest of the world—were embedded in larger social relations. Yet, in line with Polanyi, they

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documented how the neoliberal project of letting the market work freely is itself a political project of market-making. Thus, they showed that a neoliberal understanding of the market is not only erroneous, but also informed by a specific political motivation. Literature on embeddedness is rich in providing critical social theory with ammunition against the universalizing tendencies of neoliberalism. Research shows that the making of market prices and the organization of marketplaces occur in socially-embedded institutional forms and that, because of their embedded nature, markets connect social positions with power (Fligstein, 1996; Uzzi, 1996; Swedberg, 1997; Carruthers and Stinchcombe, 1999; Podolny, 2001; Le Velly, 2002; Velthuis, 2003; Duina, 2004; Uzzi and Lancaster, 2004; Aspers, 2005). Studies also reveal that markets and market prices are produced in settings embedded in culture or systems of meaning (Spillman, 1999; Velthuis, 2003). However, the critical potential of the embeddedness literature faced an important limit. The embeddedness approach deems any and all dimensions of markets to be social in nature. Piecing together a convincing argument that shows the social and historical conditions of possibility for markets differs from empirically describing the workings of the market on the ground. This is why it is no coincidence that the embeddedness approach can sometimes be as silent as neoliberalism when it comes to the questions of how markets work in the field; what kinds of agencies, human and non-human, interact in them; how modern sciences including microeconomics apply to markets; how researchers (whether market agents or scientists) contribute to the making of markets; and how prices are realized in concrete market situations. Even the best critiques of the embeddedness approach, which argue that ―the concept of embeddedness posits that the world of the market exists apart from society even as it attempts to overcome that divide‖ (Krippner, 2001:801), propose that the market should in the end be ―fully appropriated as a social object‖ (Krippner, 2001:802). The limits on institutionalist economic sociology gave rise to new literature that constituted the second strand of research, which refutes the neoliberal approach to the market. Drawing on ethnographical research methods and looking specifically into how markets work in the field, this line of study reaches radically novel conclusions by following the footsteps of its adversary, the neoliberals. Instead of examining the larger framework of market exchange, these researchers looked at the micro-structures of the exchange itself. They focused on how markets worked in the field, and presented groundbreaking findings that destabilized all the founding assumptions of neoliberalism. Such developments also generated new theoretical models in field research (Mintz, 1985; Thomas, 1991; Gibson-Graham, 1996; Wells, 1996; Callon, 1998; Elyachar, 1999; Koptiuch, 1999). Opening up the black box of markets revealed that it was no more than a blank space, occupied by a diversity of struggles both in the West and in the rest of the world (Tribe, 1981). It was argued that assumed market characteristics that facilitate economic analysis—such as information or rationality—were highly relative and contextual, and information acquisition, for instance, was very difficult not only for market agents but also for social scientists (Dilley, 1992). Hence, Gudeman showed that many existing analyses, including those of the neoliberals that draw on formal economic models, continually reproduce and discover their own assumptions in actual market relations (Gudeman, 1986).

For reviews of this literature see Swedberg (1997).

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New studies challenge the neoliberal understanding of the market based on four clusters of research: price realization; commodity quality; the nature of exchange and production relations; and relationship between global and domestic markets. These findings require a fundamental change in the way policy circles and researchers approach the market. Furthermore, they call for a new approach to reform proposals in the agricultural sector. The neoliberal understanding of the market draws on the assumption that, if let free, markets would set prices to ensure the optimum utilization of economic resources. In that respect, the price setting mechanism of the market plays a central role in imagining neoliberal policy measures in agriculture. Despite their centrality, however, neoliberal economic theory treats prices as epiphenomenal and regards them as the end result of trading practices. Institutionalists corrected the under-theorization of price by showing how this approach described markets as price setting contexts, and then explained prices as things that were set in markets (North, 1977; Robinson, 1980). This circularity was cut short in many ways by sociologists and anthropologists who made the social and cultural nature of prices visible (Robinson, 1980; Zelizer, 1981; Alexander and Alexander, 1991; Zafirovski, 2000; Geismar, 2001; Velthuis, 2003; Zajac and Westphal, 2004; Velthuis, 2005). Inspired by Polanyi‘s work, researchers frequently drew on one of his central concepts—embeddedness—and argued that prices are culturally-constructed amid relations of power, in socially and politically embedded markets (White, 1981; Granovetter, 1985; Fligstein, 1996; DiMaggio and Louch, 1998; Dobbin, 2004; Duina, 2004; Lapavitsas, 2004; Uzzi and Lancaster, 2004). Drawing on the findings of institutionalism, recent research moved on to studying concrete cases of price making in actual market settings. These studies showed that prices emerge via multiple means in markets, and should not be treated as the end result of trading practices. To understand markets more accurately, specific price realization processes require further study (Callon, 1998; Muniesa, 2000; Maurer, 2002; Caliskan, 2003; Muniesa, 2003; Chiffoleau and Laporte, 2004; Cochoy, 2004; Grandclément, 2004; Levin, 2004; Barrey, 2006; Beunza, Hardie and MacKenzie, 2006). To offer an example from agriculture, Caliskan (2007a, 2007b) showed that agricultural commodity prices in urban and rural contexts produce various price forms, each prefigured by the specific power relations among market agents. Prices can best be seen as prosthetic devices deployed to further various trading objectives. Traders produce various price forms to prevent or foster exchange. Prices are never set by a mere coming together of supply and demand; they are made, produced, and challenged by a variety of actors in the market process. Thus, simply proposing to let the market free in agricultural commodity markets would further asymmetries in the realization of prosthetic prices. More valid policy recommendations should incorporate specific price realization relations, and the prosthetic price forms that these relations produce in concrete market settings. Furthermore, this conclusion is valid for all forms of markets, from highly developed options markets to oligopolistic local markets, regardless of their degree of perfection. The second cluster of research that challenges the neoliberal understanding of the market focuses on the exchanged object. It has been commonly assumed that the nature of a given commodity has an impact on how that commodity is marketed. However, the varying quality of commodities and the ways in which their natural characteristics interact with production and exchange processes are almost never incorporated in the approach to markets.

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Recent studies show that no market can be properly understood without comprehending the specific qualities of the items that will be exchanged in that market. Historians have illustrated this point better that anyone. Mintz argued that the specific role sugar plays in the development of colonial and post-colonial domination relations cannot be dissociated from the making of its markets (Mintz, 1985). Similarly, Cronon showed that for agricultural products to be exchanged they had to be commodified and reproduced in markets as homogeneous abstractions (Cronon, 1991). The particular commodification histories of agricultural products play a significant role in the making of their markets. Thus, seeing markets as a venue of simple exchange erases the particular history of how the commodified items were actually commodified in the first place. Despite several commodification trajectories, all agricultural products still exert forms of agency, for they are living organisms. Recent studies reveal that all agricultural commodities prefigure the processes that frame their production and exchange. In the case of sugarcane, it was shown that universal policy recommendations regarding the exchange of sugarcane that did not incorporate sugarcane‘s specific, natural qualities were doomed to fail, precisely since only those who control the agency of the sugarcane could benefit from its production and exchange (Mitchell, 1998). Similarly, the specific natural quality of rice imposes a limit on rice markets, which are universally uniform institutions of exchange (Harriss-White, 2007). Thus, market approaches require careful attention to the agency of the crop to be produced for the market. This is why a neoliberal approach to the market cannot account for the specifics of markets that it aims to reform. The third challenge to a neoliberal understanding of the market comes from researchers who focus on the nature of exchanges and the production relations that underlie markets. Their studies showed that market approaches should be reformed to incorporate research designs that pay attention to the dynamic social conditions of commodity production and exchange. A production environment dominated by small producers is fundamentally different from one dominated by incorporated farms. Approaching a market dominated by an agrarian structure of subsistence and semi-subsistence producers requires a fundamentally different approach compared with approaching a market dominated by medium-sized farms that have larger capacity and financial potential for economic reform (Bush, 1999). These forms of categorical variation in exchange and production relations call for a similarly dynamic vantage point in understanding markets, a perspective that is completely absent in the neoliberal approach to agricultural markets. Furthermore, scholars employing ethnographical research designs showed that exchange relations never form unified markets in agriculture. All markets take place in differentiated exchange relations (Rudra, 1982; Crow, 2001). Producers enter categorically different market relations depending on farmers‘ capacity to affect prosthetic prices, and on land size, tenurial relations, and financial capacity. Turning our attention to Turkey, for instance, we would observe that agricultural markets are seen to differentiate in three ways. Small producers find themselves in what Bhaduri (1983) calls ―forced commerce,‖ where producers are obliged to hand over their crops to their financiers, to cover their debt. Medium-scale producers may have some say in when to sell their crop, yet the constant need for capital investments in agriculture forces them to market their produce as fast as possible. Larger farmers are the only ones who have equal footing with traders, and thus enter into a symmetrical exchange relationship. Any policy recommendation that fails to recognize the dynamic nature of market differentiation in agriculture is bound to be offering erroneous advice. The neoliberal

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understanding of the market pays no attention to specific market differentiation patterns, thereby proposing to reform a relationship it does not understand. Fourth, the neoliberal understanding of the market was challenged by researchers who offered a new theory regarding the relationship between global and domestic markets. It was shown that the objective of opening domestic markets to world markets—without taking into account the specific institutional and political working of global markets, such as indirect government subsidies and the presence of options and futures markets—and the incorporated hegemony of global trading corporations would actually hamper the capacity of third world producers to reform their markets based on their own needs. The neoliberal understanding of the market does not pay attention to the ways in which global processes are linked to local relations of production and exchange. For example, proposing to liberalize a local cotton market where farmers‘ cooperatives can hedge their trading positions in global markets differs fundamentally from offering similar options to a local market that does not have an institutional context for hedging. Furthermore, global trading practices go through exchanges that draw on corporate concerns. Yet the global countryside, where items to exchange are produced, chiefly draws on non-corporate relations of economization dominated by subsistence and semi-subsistence producers. Expecting these categorically-different agents to act in line with the requirements of corporate capitalism is another weakness of the neoliberal approach to economic reform in agriculture. Taking all these critical points together, one can easily conclude that the whole neoliberal project in agriculture (also in other sectors) suffers from a serious misunderstanding of how markets are formed, function, interact with other institutions, and are shaped by the society.

CONCLUSION Neoliberal policies that have been implemented in agriculture (and indeed in other sectors) can be seen as responses to bureaucratic, top-down and to some extent corrupt (or at least corruptible) practices of the paternalistic governance modalities that arose after the Second World War. It is a truism that, apart from those who felt the threat arising from neoliberal policies to their lives and livelihoods, the middle and upper classes by and large supported neoliberal ideology from the late 1970s onwards. The state-led system certainly had its own problems, as touched upon above, and there was therefore a pressing need to reform the prevailing state–economy–society structure. Yet, instead of searching for alternative governance modalities that would address these failures, the straightforward solution that neoliberal economists proposed was to cut down the intervention channels of society and the state apparatus from economic life entirely. Yet, as the last section made clear, the understanding of the market structure in the minds of neoliberal thinkers has had many flaws, and therefore the whole marketization drive, where competition among many entrepreneurs is thougt to promote efficiency and innovation, turns out to be a naïve attempt. Furthermore, in an environment where power is unevenly distributed (as in the case of land ownership), it is a simple logical conclusion that those with power will very likely have benefited and those with no power will most probably have suffered under neoliberal applications.

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The corollary of this logical result would entail that with the state‘s withdrawal from its traditional obligations to rural populations and the waves of privatization affecting people‘s control over natural resources, it is highly probable that many poor peasants and small farmers were exposed to the harshness of market forces. Additionally, concern regarding the extent to which neoliberal policies can satisfactorily address, let alone deal with, the sustainability and rural heritage dimensions is a case in point. Perceived as threats by many, neoliberal ideologies have been confronted, nationally as well as internationally. One line of opposition has been to address and provide solutions to the hierarchical state modality. Here the common aim has been to make the whole governance modality more participatory and transparent, and to incorporate all major stakeholders into the decision-making processes. The second line of opposition has been to form alternative production and distribution organizations. Here reference can be made to many rural social movements, such as La Vía Campesina or Movimento dos Trabalhadores Rurais Sem Terra (MST), whose self-proclaimed aims were to defend and struggle for the peasant way of life and livelihood. The Campesina way, for example, describes itself as ―an international movement which coordinates peasant organizations of small and middle-scale producers, agricultural workers, rural women, and indigenous communities from Asia, Africa, America, and Europe‖, with an aim of developing solidarity and unity among small farmer organizations in order to promote: gender parity and social justice in fair economic relations; the preservation of land, water, seeds and other natural resources; food sovereignty; and sustainable agricultural production based on small and medium-sized producers (La Via Campesina, 2009). The movement further advocates a decentralized model where production, processing, distribution, and consumption are largely controlled by the communities themselves and not by transnational corporations Although it is possible to expand the list of such alternative attempts, neoliberal thinking continues to exercise its power on our economies, including the agricultural sector. Part of this dominance can be explained by referring to the current distribution of power, nationally as well as globally, which feeds and is fed by neoliberal policies. But the other part results from the inability to provide a feasible alternative path to neoliberal ideology that would be supported by many. In the search for alternative paths, we think that understanding how the market mechanism works is of crucial importance. The aim of this chapter has been to provide some clues to that end.

REFERENCES Akram-Lodhi, A. H. & Kay, C. (2008). Peasants and Globalization: Political Economy, Rural Transformation and the Agrarian Question. London: Routledge. Alexander, J. & Alexander, P. (1991). What is in a fair price? Price setting and trading partnership in Javanese markets. Man, 26 (3), 493–512. Arensberg, C. (1957). Anthropology as history. In K. Polanyi, C. Arensberg & H. W. Pearson (Eds.), Trade and Markets in the Early Empires: Economies in History and Theory (pp. 97–113). New York: Free Press. ARIP (2009). Basic problems Turkish agriculture faces. http://www.arip.org.tr/ eng/foy1.htm

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In: Rethinking Structural Reform in Turkish Agriculture: … ISBN: 978-1-60876-718-2 Editors: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 7

AGRICULTURAL TRANSFORMATION AND THE RURAL LABOR MARKET IN TURKEY Ipek Ilkkaracan1 and Insan Tunali2 1

Istanbul Technical University, Turkey 2 Koc University, Turkey

ABSTRACT After five decades of transformation, the share taken by agriculture in total employment in Turkey had decreased from 85 percent in 1950 to 36 percent in 2000. Despite significant technological progress, total agricultural employment remained in the 8–9 million range during much of this period. The pace of transformation hastened upon implementation of the Agricultural Reform Implementation Project (ARIP) in 2001. This process placed some two million additional inhabitants in the ―surplus labor‖ category as the share of agricultural employment fell to under 25 percent by the end of 2008. We rely on various data sources to trace the contours of this transformation and examine its manifestations in the rural labor market. Since the transformation burdens the urban labor market with the task of absorbing the surplus labor, we also review the changes that have taken place in urban areas to gauge the prospects. We tease out the demographic manifestations of the transformation by breaking the aggregates down by gender, age, and education. We find that the agricultural labor force is ageing at unprecedented rates as the young and women opt for nonparticipation. Women, who typically contribute to the small family farm as unpaid family labor, face the biggest challenges as the distinctions between the rural economy and the urban economy become blurred. Although there are signs that the rural economy took a more diverse form in the postARIP period, rural labor markets do not appear to hold much promise for the workingage population.

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INTRODUCTION One of the stylized facts of growth is that agriculture‘s share in output and employment declines with economic development (Kuznets, 1966; Chenery and Syrquin, 1975; Chenery, Robinson and Syrquin, 1986). Turkey‘s case is no exception. In 1950 agriculture accounted for more than 40 percent of Turkey‘s national income while its share in total employment was 85 percent. By 1970 the respective shares were 26.3 and 63 percent, and by 1990 they were 15.9 and 47 percent. In other words, between 1950 and 1990 it took 20 years for agriculture to shed 25 percent of its former share in employment. If this pace of decline had continued, agriculture‘s employment share in 2010 would be 0.75×0.47 or 35 percent. Yet Turkey reached this threshold in 2002, and as of December 2008 agriculture‘s share in total employment had fallen below 25 percent. A related stylized fact of growth is the increase in the relative size of the urban population. Surplus labor (a term coined by Lewis, 1954) that leaves agriculture serves the growing labor needs of the urban economy. Since economic growth and technological change proceed together, it is not unusual for agricultural output to register gains during this time (Sen, 1966; Timmer, 1988; Johnson, 1997). Thus it is possible to feed a growing population with fewer hands on the farm. Again, Turkey‘s case fits this model. Between 1950 and 1979, while population grew at an average rate of 2.6 percent per annum, agricultural and nonagricultural output respectively grew by 2.95 and 6.39 percent per annum. The figures for the 1980–2005 period were respectively 1.7, 1.13 and 4.74 percent (Altug, Filiztekin and Pamuk, 2008). As we document in the next section, Turkey reached the limits of arable land in the early 1970s and the total area under cultivation at the beginning of the 21st century was about the same as that during the 1960–69 period. Census data indicate that the absolute numbers engaged in agriculture were fairly stable (around 9.7 million during 1960–65, 10 million during 1975–80, and 11–11.5 million over the period 1985–90)+. Thus the sustained output increase in agriculture is attributable to increased use of inputs other than land and labor. Tractors followed by other types of machinery, fertilizers, irrigation and crop rotation each contributed their share to the process. While some inputs reduced the need for labor, others called for more labor days, and the joint outcome was stability in the size of the rural population and agricultural workforce. Undoubtedly Turkey‘s generous agricultural support policies had a hand in keeping the numbers engaged in agriculture high. As of the 1980s and 1990s, small-scale commodity farming was the dominant form of agricultural production, rather than large-scale capitalist farming (Aksit, 2006). The apparent motives for sustained supports included food selfsufficiency, poverty alleviation, and containment of rural–urban migration that would result in chaotic city growth (See Chapter 2 by Keyder and Yenal). An equally important motive GDP data are from Bulutay (1998:xviii:Table 2). Bulutay reports that the percentages of agricultural production as a share of national income are based on the earlier national income series; and that on the basis of the new national income series the respective shares for 1970 and 1990 would be 35 percent and 17.3 percent. The labor share data are from World Bank (2006). + Census data provide an upper bound on the size of the agricultural workforce because all able-bodied adults (aged 15 and above) who live in a land-owning agricultural household are counted as employed. As we document in the next section, levels measured by the Household Labor Force Survey (which has been conducted since 1988) are considerably lower. Agricultural employment includes fishery and forestry workers, but they account for a negligible fraction of the total.

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was a hard-learned lesson in politics: rural voters with strong ties to land have had a say in election outcomes ever since multi-party elections began (Akder, 2007; Chapter 3 by Keyman). Recent accounts of the agricultural transformation underscore the role of markets in bringing about the favorable changes in output and productivity. As Timmer (2002:1489) puts it, ―… [T]here is now general agreement that agricultural development is best served by a market-oriented strategy capable of stimulating rapid technological change in the agricultural sector.‖ The Turkish case may be viewed as providing corroborating evidence, albeit from the negative side. After decades of protection, the macroeconomic policy reorientation unleashed in 1980 under the mantle of a military regime dismantled price supports and introduced the agricultural sector to the whims of the global market. As imported agricultural commodities flooded the market, local agricultural prices fell and aggregate output increased, giving Prime Minister Turgut Ozal an early opportunity to boast of the virtues of the liberal stance he championed. Following the restoration of freely contested multiparty elections, however, Ozal discovered that his liberal policies did not provide the best election platform. As his second term as Prime Minister came to an end, the third looked more and more elusive. He desperately revived the policies he had vehemently opposed, in an effort to win back the rural vote. This ushered in a new era of agricultural supports as his victorious competitors followed suit.+ According to estimates by the OECD, supports to the agricultural sector, which claimed 3.5 percent of the GDP in 1988, crept up and reached their peak of 6.7 percent during 1997– 99.§ Notably, real agricultural value added per worker during this three-year period was about the same as that during 1979–81, before Ozal‘s market-oriented reforms redefined the landscape (Dogruel, Dogruel and Yeldan, 2003: Table 1). Agricultural supports contributed to the large budget deficits and high inflation that marked the 1990s. Among other things the structural reform program adopted in 1999 called for a massive overhaul of the agricultural sector, and the Agricultural Reform Implementation Project (ARIP) was born (see Chapter 5 by Cakmak and Dudu). ARIP stipulated immediate removal of all subsidies and replaced them with direct income support to alleviate the welfare impact. After five years of implementation (from 2001 onwards), agricultural employment in 2006 had declined to 6.1 million, after peaking at 9.3 million in 1996 and averaging 8.7 million in the 1990s.€ Recent data indicate that the drastic employment decline coincided with increases in real agricultural value added per worker (DPT, 2008: Table 1.8; Chapter 5 by Cakmak and Dudu). Inflation, which averaged 33.4 percent during 2000–5, was down to 9.6 percent during 2006–7.

Turkey had pursued an import-substitution-based industrialization policy until this time. By the end of the 1970s commodity prices in Turkey were completely out of line with world prices. The reforms adopted in the 1980s ushered in corrections in relative prices as well as higher inflation. Boratav (2000) documents the relative price changes using various measures, including the terms of trade between agriculture and manufacturing. In 1986 the terms of trade stood at around 40–50 percent of the 1976–79 level. + This is not the first example of reversion to populism. Gurkan and Kasnakoglu (1991) use data from 1962–83 to identify the political cycles and find that election years are marked by increased subsidies, while military interventions and liberal shifts in the policy environment decrease them. § International comparisons based on data from the 1990s reveal that Turkey was not an outlier in its support of agriculture during this time (Dogruel, Dogruel and Yeldan, 2003). € As underscored by Tunali, Umit Akcigit, Baslevent, Ercan and Ozturk (2003), care has to be exercised in comparing pre- and post-2000 employment series obtained from the Household Labor Force Surveys (HLFS). Nonetheless, a sustained decline in employment is observed in the post-2000 data.

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It is tempting to credit ARIP with the productivity gains and the reduction in the inflation rate (see Chapter 5 by Cakmak and Dudu). Yet, as the contributions to this volume repeatedly point out, it is not clear that the objectives stipulated in ARIP have been attained. According to Akder (2007:530), ―… policy instruments may have changed but the basic policy paradigm persisted.‖ One outcome that cannot be debated is that the hastened pace of transformation contributed to Turkey‘s growing labor-absorption problems. The technological progress that made the reforms possible placed some two million additional inhabitants in the ―surplus labor‖ category. The main aim of this chapter is to document the correlates of the agricultural transformation on the rural labor market. Since the dualistic development model burdens the urban labor market with the task of absorbing the surplus labor, we also review the changes that have taken place in urban areas. Towards that end we examine time series and crosssection patterns in employment, participation and unemployment. We study employment patterns broken down by four main sectors of production (agriculture, manufacturing, services, and construction) to delineate the changes in the labor absorption patterns. Finally, we tease out the demographic manifestations of the transformation by breaking the aggregates down by gender, age, and education. We begin our investigation in the next section with a brief overview of the evolution of the structure of agricultural production. We then turn to the labor market. While the urban labor market is closer to what is understood by a ―market,‖ historically only a small segment of its rural counterpart has had market-like features. This is attributable to the specialized nature of production, whereby the rural economy becomes concomitant with agriculture, while the urban becomes one and the same with non-agriculture. In the subsequent section we first examine employment trends and show that the reduction in the share of agricultural employment was accompanied by a decline in labor force participation, and more recently by the ageing of the agricultural workforce. We also examine the composition of nonparticipants and look at trends in unemployment. After that we scrutinize the rural labor market further, and pursue the signs that suggest that its economic base is becoming diversified. Nonetheless, using synthetic cohort analysis we establish that career prospects in rural areas have been declining over time, especially for women. We then evaluate in turn the prospects for absorption of the surplus in the urban labor market and in non-agricultural employment in the rural labor market. We end that section with an account of the special obstacles that face women in rural areas. This is followed by our concluding remarks.

EVOLUTION OF THE STRUCTURE OF AGRICULTURE Until the 1950s the rural share of Turkey‘s population remained stable at around 75 percent. Population pressure on land was yet to be felt. Farming inputs consisted of labor and a pair of oxen, and land was tilled with a wooden plow (Herschlag, 1960). Although the agricultural transformation began with the development of the highway network and the introduction of tractors in the 1950s (Aksit, 1988; Keyder, 1983a; Tekeli and Erder, 1981; Pamuk, 2009), because of data constraints our sweeping account covers the post-1960 period. In this section we mostly rely on data from the World Development Indicators (WDI) database maintained on the World Bank site, and supplement it using survey data from the

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Turkish Statistical Institute (TURKSTAT) as needed. In the interests of readability, we typically report decade averages of the various indicators.+

Population Dynamics We begin by highlighting the changes as captured by the population indicators reported in Table I. Turkey‘s population growth rate peaked at 2.5 percent per annum in the 1960s, remained high through the 1980s, and fell below 1.5 percent after 2000. According to the generally accepted account, Turkey entered the third stage of the demographic transition in the mid 1980s and reached near replacement fertility by 2003 (Shorter, 1995; HUPSI, 2004). The population residing in rural areas (localities with a population less than 20,000) reached 25 million in 1980 and started a slow decline thereafter. The rural share of the population started declining earlier. It fell below 50 percent in the 1980s and 30 percent in 2007.§ Table I. Population indicators. Total population

Population growth

Rural population

Rural population growth

Rural share

(average)

(annual %)

(average)

(annual %)

(%)

Rural densitya (population per 100 km2 arable land)

1960–69

30,858,180

2.53

20,266,590

1.54

65.8

86

1970–79

39,481,849

2.34

23,242,858

1.34

59.0

92

1980–89

49,688,058

2.30

24,040,347

–0.50

48.8

97

1990–99

61,190,833

1.89

23,375,673

0.15

38.3

95

2000–05/07a

70,795,560

1.36

23,694,451

–0.14

33.5

100

Period

a

All series end in 2007 except for rural density, which ends in 2005. Source: World Development Indicators database, World Bank (2008).

Rural fertility and birth rates have been considerably higher than urban fertility throughout the period under examination. However, migration flows have kept rural population growth rates below the national average. Using ―arable‖ land area rather than surface area to account for available resources, rural population density per 100 km2 of arable land was 86 between 1960 and 1969 and increased at a rate of 5–6 persons per decade during the 1970s and 1980s. It decreased to 95 during 1990–99, but averaged 100 persons between

Links to the WDI database may be found under Data & Research on the World Bank website: http://www.worldbank.org/. In what follows we cite the source as ―WDI database, World Bank (2008).‖ + Decade averages are the arithmetic averages of the annual values of the indicators. Tables with the annual data are available from the authors. § TURKSTAT published a revised population figure of 70.6 million in 2007, based on residential registration (the Address Based Population Registration System, or ADNKS; see TURKSTAT, 2008b). This revision is not reflected in the WDI database. If and when it is, the share of the rural population for recent years will be

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2000 and 2005. Our rural density measure suggests that the population burden on available agricultural land increased over time, except for a lull during the 1990s.

Agricultural Employment, 1940–2000 A long, internally consistent data series on agricultural employment is notoriously difficult to construct. Earlier data come from censuses conducted every five years. These have the advantage of covering the entire country, but use non-standard criteria for measuring employment. Furthermore, census data for 1950 and earlier rely on an occupational rather than a sectoral classification, resulting in a break in the series. Annual Household Labor Force Surveys (HLFS) that employ modern conventions have been conducted from 1988 onwards. The methodology has improved over time via increases in the sample size and the sampling frequency during the year. Data from these two TURKSTAT sources and the series reported by Bulutay (1995) are compiled in Table II. In 1990 agricultural employment recorded in census data is 32 percent higher than that shown in the HLFS. It is natural for employment levels reported in the HLFS to be lower because the standards used in determining employment status are clear cut. Nonetheless, the discrepancy is extremely large. In the 2000 census data the amplification factor is an astounding 57 percent. Note that census data also amplify total employment in 1990 and 2000, but only by a factor of 18–19 percent. Taking any of the available series as our guide, we can say that the share of agriculture in total employment went down over time, emulating a key stylized fact of growth. We will exploit the richer information content of the HLFS employment series in some detail below. At present we would like to underscore that, although the reduction in the agricultural share of employment can be established with confidence, it is harder to measure the changes in labor productivity over time.+ The impact of the agricultural transformation on labor use is likely to have been manifested in both the intensive and the extensive margins of work. Thus the reported numbers may not be sufficient for capturing the changes in labor input over time. We therefore turn to indicators of the performance of the agricultural sector, reported in Table III, and piece together the evidence in an indirect manner. The last period covered in the table is identified as ―2000–05/07‖. This is because in some cases data are available until 2005, and in other cases until 2007. We refer to this last period as the ―ARIP period,‖ even though implementation did not begin until 2001. As in Table I, period averages are arithmetic averages of the annual values. adjusted downward. According to the administrative breakdown given in ADNKS, less than 30 percent of Turkey‘s 2007 population resided in villages. Bulutay‘s series appears to be the one used in World Bank (2006). The methodology used for constructing the annual series is not made explicit in Bulutay (1995) but the reader is referred to Bulutay (1992). Bulutay‘s series has been reported for the period 1923–2006 with minor revisions in recent TURKSTAT publications, such as TURKSTAT (2008e). + The standard approach for productivity analysis is based on data on Agricultural Value Added per Agricultural Employee. The available series all indicate increases over subperiods (see Cakmak and Zaim (1998) for 1970– 95 data, the WDI database for 1990–2005 data, Cakmak, Akder, Levent and Karaosmanoglu (2008) for various subperiods, and Chapter 5 by Cakmak and Dudu for 1998–2008). To the best of our knowledge none of the avialable series correct for changes in the intensity of labor use over time.

Table II. Agricultural employment and share in total, ages 15 and above. Year

General Population Census

1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 2000

Total – – – 12,205,272 12,993,245 13,557,860 14,051,209 16,049,565 17,219,571 19,208,608 22,085,711 25,527,737

Agriculture – – – 9,446,102 9,737,489 9,750,269 9,281,024 10,458,286 9,972,361 10,950,844 11,506,708 12,202,401

Bulutay Ag share – – – 0.77 0.75 0.72 0.66 0.65 0.58 0.57 0.52 0.48

Sources: General Population Census: TURKSTAT (2008e: Table 1.15). Bulutay: Bulutay (1995: Table 7.A). HLFS: HLFS database, TURKSTAT (2008d).

Total 7,255,924 7,685,780 8,789,265 10,481,281 11,257,614 12,051,057 13,033,977 14,386,813 15,702,127 16,699,204 – –

HLFS Agriculture 6,242,653 6,559,112 7,407,616 8,092,505 8,341,556 8,352,206 8,243,246 8,398,084 8,360,398 8,245,704 – –

Ag share 0.86 0.85 0.84 0.77 0.74 0.69 0.63 0.58 0.53 0.49 – –

Total – – – – – – – – – – 18,536,000 21,575,000

Agriculture – – – – – – – – – – 8,691,000 7,769,000

Ag share – – – – – – – – – – 0.47 0.36

Performance of the Agricultural Sector over Time Table III: Performance of the agricultural sector over time. Indicator

Period 1960–69

Agricultural land (% of land area) Arable land (hectares) Arable land (70–79=100)

48.5 49.8 50.1 51.8 53.2 n.a. 23,873,667 25,178,200 24,786,833 24,491,833 23,782,333 n.a. 95 100 98 97 94 n.a.

Arable land (% of land area)

31.0

1970–79

32.7

1980–89

32.2

1990–99

31.8

2000–05

30.9

2006–7

n.a.

Arable land (hectares per rural resident) 1.18 1.08 1.03 1.05 1.00 Agricultural machinery, tractors 62,016 232,822 557,795 793,733 964,489 Agricultural machinery, tractors per 100 sq. km of arable land 25.8 92.4 225.4 324.5 406.2 Index of agricultural machinery, tractors per 100 sq. km of arable land (60– 69=100) 100 358 872 1,256 1,572 Fertilizer consumption (100 grams per hectare of arable land) 83 356 631 779 799

n.a. n.a. n.a.

Index of fertilizer/land ratio (60–69=100)

100

431

763

943

966

n.a.

Food production index (1999–2001 = 100)

44

57

77

93

104

112

Crop production index (1999–2001 = 100)

41

57

75

92

103

n.a.

Livestock production index (1999–2001 = 100) Cereal yield (kg per hectare) Cereal yield index (1999–2001=100)

55

Source: World Development Indicators database, World Bank (2008).

66 1,201 55

84 1,569 72

96 1,984 91

100 2,126 98

n.a. n.a.

n.a. 2,338 108

2,486 115

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113

We begin by noting that although the share of land identified as ―agricultural land‖ has increased over time, the share of land deemed ―arable‖ has been fairly stable, at around 31 percent. There is evidence that marginal lands were brought under cultivation with the help of increased mechanization, but the limits of expansion were reached in the 1970s. Starting with the 1980s, the amount of arable land decreased as alternative uses became more attractive. The average amount of arable land recorded for the ARIP implementation period, 2000–05, was 94 percent of that for 1970–79. Arable land per rural resident, which averaged 1.18 ha during 1960–69, slowly drifted down and stood at 1 ha during 2000–05. Although our labor measure is very rough, we take this as an indicator of a remarkably constant land/labor ratio over time. In fact Hayami and Ruttan (1985) report a land/labor ratio of 10 ha per male worker for Turkey for 1960 and 1980, and Cakmak and Zaim (1998) conclude that the land/labor ratio was fixed over the 1970–95 period. Four output indicators, included in Table III in the form of indices (with the 1999–2001 average set equal to 100), provide us with a perspective over 40+ years regarding food, crop, and livestock production, and cereal yield. We see that average outputs during 1960–69 were around 41–55 percent of the 1999–2001 averages and increased steadily over time. Furthermore, three of the four indicate additional increases of 3–9 percent after 2000. This suggests a sustained productivity increase over time. Since the land/labor ratio remained constant, it is clear that other inputs are responsible for the recorded gains in output. We are able to provide direct evidence on two inputs: tractors and fertilizers. In Table III we show both absolute and relative measures based on indicators reported in the WDI data base. These are: (i) the number of tractors and the average number per 100 km2 of arable land; and (ii) metric tons of fertilizer consumption and consumption (in units of 100 grams per hectare of arable land). For ease of interpretation, we have converted the relative measures to index form by setting the 1960–69 averages equal to 100. We see that the tractor/land ratio increased over time, very quickly at first and rather slowly after 2000. The fast spread in mechanization corresponds to the period of expansion to wider and wider parts of the country. The fertilizer/land ratio followed a similar path, but the jumps were more muted. To recapitulate, we have strong evidence that the amount of land devoted to agriculture has been more or less fixed throughout the period of 40+ years under study. We also have evidence from several sources that the land/labor ratio has been constant during this time. Putting these two together, we may conclude that the labor input has been more or less fixed as well. Secondly, we have clear evidence of output increases. This establishes that labor productivity increased over time. Thirdly, we have offered evidence of increased tractor and fertilizer use, which are two of the sources of the historical productivity gains. As the data in Table III show, while the tractor/land ratio increased by 25 percent during the ARIP period, the fertilizer/land ratio increased by only 2.5 percent. This suggests that some substitution of The account by Cakmak (2004) corroborates our findings and supplies additional evidence. According to him, technological change started in the 1950s. He points out that use of land resources improved over time, first via expansion into new land (meadows and pastures), and later by reduction of fallow facilitated by crop rotation, increased fertilizer use and irrigation. Fertilizer use and irrigation also paved the way for sowing multiple crops during the growing season. Remarkably, only 14 percent of the land was irrigated in 1991. This share rose to 20 percent in 2001. The fallow share decreased from 21 to 18 percent during this time. Pamuk (2009) examines agricultural development from a longer-run perspective and offers a succinct account of the major changes since 1950. Aksit (2006) offers a sweeping summary of the vast literature (mostly in Turkish, written from a sociological–anthropological perspective) directed to the examination of the agricultural transformation, and documents the regional differences.

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machinery for labor may have taken place during the ARIP period. In fact, recent data from the HLFS that we examine in some detail in the next section indicate a sharp reduction in agricultural employment.

Changes in Farm Size Distribution The consensus is that subsidies directed at agriculture provide the right incentives for continued investment in it and may dictate the pace of technological progress (Timmer, 1988:280). This is likely to have been the case in Turkey, where small farm holdings have dominated production. Historically there have been three major forms of state involvement in agriculture: product price supports, subsidized credit, and input price subsidies. Both the support mixture and its coverage varied over time and were manipulated by populist governments (Gurkan and Kasnakoglu, 1991). According to Organisation for Economic Cooperation and Development (OECD) data, total agricultural support as a fraction of GDP rose in the 1990s and reached a peak of 6.7 percent during the 1997–99 period before declining to 5.3 percent in 2000 and further to 2.9 percent in 2001. The sharp reduction in 2001 reflects the combined effect of ARIP and the economic crisis. Although ARIP stipulated removal of all subsidies and use of direct income support (DIS) instead, the record indicates that subsidies crept back in within a couple of years. DIS payments and other supports accounted for 4.4 percent of the GDP during 2003–4 as Turkey‘s first single-party government in three decades solidified its grip on power (Cakmak et al., 2008).+ Akder (2007, and Chapter 4 in this volume) underscores that the large government bureaucracy charged with the tasks of overseeing the subsidies resisted and effectively suffocated the reforms. Although self-serving bureaucrats are likely to have influenced the course of events, a more likely explanation is the ownership structure in agriculture, which kept the populist instincts alive. By most accounts, the reorientation from self-sufficiency to market production was complete by 1970, with the exception of some feudal remnants in southeastern Turkey (Boratav, 1980; Keyder, 1983a, 1983b; Aydın, 1987). Small family farms dominated agriculture at this time. Data from the agricultural censuses, and a recent survey compiled in Table IV, indicate that operational size crept up over time. However, as of 2006 small farms continue to account for a majority of the producers. According to the 1970 General Census of Agriculture, 73 percent of all farms (about 3.1 million in total) owned less than 5 ha of land each, and these farms worked 27 percent of the total land under cultivation. Middle-sized farms in the 5–20 ha range accounted for 23.5 percent of all farms, and worked 42 percent of the land. Only 3.7 percent of the farms were greater than 20 ha in size, and these large farms operated 30.8 percent of the land under cultivation. Censuses of 1980 and 1991 provide two snapshots from the closing episodes of the period of expansion of agricultural employment. We see that the number of farms increased by about 500,000 every ten years. Interestingly, the dramatic changes in the size distribution of farms and farmed area captured by the 1980 census appear to have been partially reversed in the 1991 census.

Pamuk (2009) points out that small farms are a legacy of the Ottoman era. + Chapter 5 by Cakmak and Dudu provides updated information on the revival of agricultural subsidies.

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Table IV. Distribution of farm holdings and farm area by farm size, and indicators of land use. Number of farms Share of farms by farm size: (0–2) ha [2–5) ha [5–20) ha [20+ ha Total farm area, ha Share of total area by farm size: (0–2) ha [2–5) ha [5–20) ha [20+ ha Average farm size, ha Flower–vegetable share in total Vineyard–orchard share in total Crop share in total Fallow share in total Fallow share in crop area

1970 3,058,905

1980 3,558,815

1991 3,966,822

2001 3,022,127

2006 n.a.

44.2 28.7 23.5 3.7 17,064,994

28.4 32.7 32.6 6.3 22,764,029

34.9 32.1 27.6 5.3 23,451,099

33.4 31.4 29.4 5.8 18,434,822

24.4 33.2 34.5 7.9 n.a.

10.4 16.8 42.0 30.8 5.6 0.0064 0.065 0.57 0.27 0.32

4.1 15.9 45.1 34.9 6.4 0.014 0.065 0.58 0.25 0.30

5.6 16.5 40.9 37.0 5.9 0.022 0.083 0.67 0.20 0.17

5.1 15.5 44.5 35.0 6.1 0.020 0.095 0.66 0.15 0.18

3.4 13.0 39.0 44.6 n.a. 0.017 0.094 0.70 0.13 0.16

Sources: General Censuses of Agriculture, State Institute of Statistics (1979, 1983, 1994, 2003); 2006 Structure of Agricultural Businesses Survey, TURKSTAT (2008c).

Data collected some 30 years later (for the 2001 General Census of Agriculture) indicate that the total number of farms was about the same as in 1970. The ranks of small farms thinned from 73 to 64.8 percent (of around 3 million farms), while their land share decreased from 27 to 20.6 percent. Middle-sized farms increased in number (from 23.5 to 29.4 percent of all farms) while their share of land area grew by a small amount (from 42 to 44.5 percent). The number of large farms also increased (their share went up from 3.7 to 5.8 percent) and they commanded a larger share of the land area (35 percent). The finer breakdown of the small farm category given in Table IV indicates that operations under 2 ha have been the ones losing their shares. Thus, although there is some evidence that the smallest family farms were being replaced by larger ones, three decades of technological change brought little change in ownership structure. Notably, the average farm in Turkey owned under 5 ha in 1970 and 1980, 5.2 ha in 1991, and 6 ha in 2001 (Cakmak, 2004). The ability of small, family-owned farms to endure and adjust to the changes that come with technological progress is a well-established historical fact (see De Janvry, 1981; Hayami and Ruttan, 1985; Otsuka, Chuma and Hayami, 1992). In Turkey the adjustment was aided by migration to urban areas and emigration, which reduced the population pressure on land (Keyder, 1983a, 1983b; Chapter 2 by Keyder and Yenal). Links between members of the extended family were sustained via remittances and in-kind transfers, an arrangement that provided insurance for both the land-based and the mobile branches of the family (Aksit, 2006). Land-based members had to contend with droughts and other natural disasters, but the government was always ready to pardon unpaid farm debts and supply additional credit. Under these circumstances it is not surprising to see that land did not change hands very Another persistent feature of Turkish agriculure is the fragmentation of land holdings. In 2001 the average family farm had to supervise 4.1 parcels of land (SIS, 2003).

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often. The DIS provision of ARIP proved yet again that farmers were keen to collect any and all benefits associated with landownership. During the first year, when DIS payments were confined to holdings of 20 ha or less, 2.2 million farmers registered. The next year the number of claimants increased to 2.6 million, as larger holdings were broken down to qualify for support. To avoid further breakups, the ceiling had to be raised to 50 ha in 2003, covering 99 percent of all holdings (Cakmak, 2004). A key point that emerges from the foregoing analysis is that technological change did not bring about a significant change in ownership structure. However, the TURKSTAT survey data reported in the last column of Table IV suggest that the process of elimination of the smallest operations may have speeded up as a result of ARIP. Remarkably, in 2006 farms with holdings of 20 ha or larger accounted for 7.9 percent of all operations, but 44.6 percent of the land under cultivation.+ Further, comparison of recent data from two other surveys conducted as part of the ARIP evaluation with data from the 1970s (reviewed below) indicate that rental markets were being used with much higher frequency. Thus while ownership structure has been slow to adjust, there is concrete evidence that the operational size of the family farm has edged upwards via rental arrangements. The bottom rows in Table IV provide a glimpse of the changing cultivation practices over time. We see large reductions in the use of fallow practices between 1970–80 and 1980–91, which coincide with the period of dramatic expansion of fertilizer use identified in Table III. As a result a larger and larger fraction of arable land is devoted to crop production, the main agricultural activity in Turkey. At the same time significant increases are registered in the share of land devoted to labor-intensive agricultural products that come under the flower– vegetable and vineyard–orchard categories.§

Short-Term Transactions Involving Land and Labor We are primarily concerned with the employment implications of the transformation reflected in Table IV. In Table V we examine the adjustments that took place on the land and labor margins jointly, using data from two nationwide surveys conducted 30 years apart. Table Va is based on a survey conducted by Hacettepe University Population Studies Institute (HUPSI) in 1973. The data we report are for agricultural households who cultivate their own land. The sample is extremely good at capturing the full range of agricultural practices of the time, with primitive farms using a wooden plow and a pair of oxen at one extreme, and fully mechanized farms relying on tractors and combine-harvesters at the other. Given this heterogeneity, it may not be surprising to find rather limited action on the labor and land

According to Cakmak (2004), a total of 2.8 million farmers qualified for DIS payments in 2003. This number is below the ―99 percent of 3+ million farmers‖ enumerated in the 2001 General Census of Agriculture. The discrepancy is attributable to the fact that farmers who could claim usufruct rights to land based on local administrative records (kept by the Village Headmen) were not recognized as landowners in the central administrative records used in establishing the legitimacy of DIS claims. + Using the midpoints of the detailed distributional breakdown provided in the 2006 Structure of Agricultural Businesses Survey (reported in TURKSTAT, 2008c), Gursel and Karakoc (2009) arrive at an average operational size of 9.3 ha. § Excluded categories of land use are pastures/meadows and forested areas.

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margins. Bedi and Tunali (2005) rely on a transaction-costs-based theory to explain the overwhelming preference of land-owning cultivators for relying on their own resource base. They provide evidence that markets are more active in the more commercialized areas of the country. Table V. Participation in transactions involving land and labor, 1973 versus 2002. Number and share (percent) of owner-cultivators in sample. Lease land out

Do participate

2 (0.20)

100 (9.85)

38 (3.74)

0 (0)

140 (13.79)

not 18 (1.77)

433 (42.66)

126 (12.41)

2 (0.20)

579 (57.04)

20 (1.97)

183 (18.03)

60 (5.91)

0 (0)

263 (25.91)

Hire labor in 0 and out (0)

26 (2.56)

7 (0.69)

0 (0)

33 (3.25)

Column totals

742 (73.10)

231 (22.76)

2 (0.20)

1015 (100.00)

Table Va: 1973 survey Hire labor out Do participate Hire labor in

40 (3.94)

not Lease land in

Lease land in Row totals and out

Source: Bedi and Tunalı (2005). Table Vb: 2002 Lease land out survey Hire labor out 11 (0.28) Do not 22 participate (0.56) Hire labor in 19 (0.48) Hire labor in 4 and out (0.10) Column totals 56 (1.42)

Do participate 626 (15.85) 1347 (34.10) 631 (15.97) 213 (5.39) 2817 (71.32)

not Lease land in 179 (4.53) 447 (11.32) 337 (8.53) 99 (2.51) 1062 (26.89)

Source: Dudu, H. Personal e-mail communication, January 16, 2009.

Lease land in Row totals and out 1 817 (0.03) (20.68) 4 1820 (0.10) (46.08) 8 995 (0.20) (25.19) 2 318 (0.05) (8.05) 15 3950 (0.38) (100.00)

Panel Vb is based on survey data collected as part of the ARIP evaluation efforts in 2002. By this time technological innovations were widespread, and commercialization was complete. Consequently we would expect to see more activity on both land and labor The average landowner in the sample owned 5.8 ha of land while the average owner-cultivator in the sample owned 5.7 ha of land. The distribution of farms by operational size is similar to that reported in Table IV for 1970: (0–2) ha—41 percent, [2, 5) ha—27.9 percent, [5, 20) ha—25 percent, 20+ ha—6 percent. We are indebted to Hasan Dudu for furnishing the data in panel Vb. We excluded the table from the 2004 survey because the patterns are nearly identical. The average owner-cultivator in 2002 operated 6.2 ha of land, slightly more than that reported for 2001 in Table IV.

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margins. What we find is that while activity on the labor margin had increased significantly in 30 years, the land margin had remained stable. More than 70 percent of the owner-cultivators did not lease land in, or out. However, those who made adjustments were 19 times more likely to lease land in rather than out. Back in 1973 those who leased in were almost six times as numerous as those who leased out. Despite the incremental changes, the average Turkish farm is still considerably smaller than the average for the EU-25 (16 ha in 2007).+ One reason why owner-cultivators may be averse to adjusting the scale of the family farm is their limited managerial potential. As we show later in this chapter, average human capital engaged in agriculture is extremely low. This might discourage farmers from expanding beyond a scale that can be cultivated under the supervision of household members.§ As Timmer (1988:293) puts it, ―… there are too many opportunities to let high yields slip beneath the hoe or in a late fertilizer application, even under the watchful eyes of a guardian.‖ The next question is the nature of the increased activity on the labor margin. Returning to Table V, note that the fraction of owner-cultivators who hired labor in remained about the same, and increased activity took the form of hiring labor out. The HLFS data we examine in the following sections indicate that non-farm activities have claimed an increased share of rural employment in the ARIP period. This development suggests that the agricultural transformation has reached the point where the rural economy has other legs to stand on. Before rural areas become fully integrated with the urban labor markets, agricultural households would have a tendency to use the labor of their members on the farm. As new time-use options emerge, household labor will be put to the best possible use, often outside agriculture. As incomes go up, income-elastic products (vegetables, fruits, and flowers) replace traditional ones (cereals). Both technology- and demand-driven changes in cropping have implications for the labor needs of owner-cultivators. Mechanization means that certain laborintensive stages of agriculture (such as the harvesting of field crops) cease to be so. On the other hand, more intervention may be needed during the growing season for effective application of irrigation and fertilizers, and other yield-enhancing measures. Maintenance of perennials (vineyards–orchards) and multiple crop cultivation (flowers–vegetables) require timely interventions by experts. Not all members of the household may be qualified to engage in the full range of specialized activities. And not all members may be in the best position to exploit the opportunities that emerge off the farm. We turn to our detailed examination of the HLFS data next, and explore the adjustments that took place.

Agricultural Transformation and Surplus Labor The technological change that triggers agricultural transformation facilitates the release of surplus labor for absorption into industry and service-sector employment. The dualistic model of growth popularized by Lewis (1954) and Fei and Ranis (1964), and extended by + With the addition of Bulgaria and Rumania, the average for the EU-27 went down to 11.5 ha (European Commission, 2009). § The monitoring challenges are underscored in Hayami and Ruttan‘s (1985) classic account. As they point out, only a few crops (such as sugar cane and cotton) can be grown in large farms by gangs of unskilled labor supervised by hired overseers.

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Harris and Todaro (1970) to allow for urban unemployment, suggests that industrialization effort creates manufacturing jobs in urban areas, and migration flows channel surplus labor in agriculture to maintain a reserve army of workers near the industrial centers. The process creates unemployment, but at a minimum urban wages will remain low and agricultural productivity will rise, creating conditions amenable for growth. A viable construction sector, combined with an informal sector that supports the modern manufacturing sector, serves as a buffer for initiating young unskilled males to the rigors of wage labor (Fields, 1975). The model has a limited role for unskilled females in sectors linked with agriculture such as food processing and textiles, and as domestic workers. This dualistic model of growth serves us well for describing Turkey‘s experience between 1950 and 1990. Census data from 1955 to 1990 show that of the total increase of 8 million jobs for men in this period (from 6.9 million employed men in 1955 to 14.9 million in 1990), 3 million were in industry, 4 million in services, and only 1 million in agriculture. During this time 3.2 million jobs were created for women (a change from 5.3 to 8.4 million), less than half as many as for men. The bulk of these (2 million) were in agriculture, and only a total of 1.3 million in non-agricultural employment (Bulutay, 1998: Table 3; ages 12 and over). Thus expansion of non-agricultural employment appears to have been adequate for absorption of male surplus labor to a large extent, but not for the female agricultural labor surplus. The macroeconomic picture that emerged at the end of the 1970s made it clear that import-substitution industrialization could not deliver the growth rates needed for sustaining real incomes. In fact, the reforms undertaken between 1980 and 1990 may be viewed as an attempt to render the traditional labor-absorption model workable again, by following an export-oriented industrialization strategy. However, employment creation in the post-reform period lagged behind earlier levels and the absorption problem extended to male surplus labor as well. Between 1988 and 1998, while the population in the 20–54 age group grew at an average rate of 3 percent per annum, employment increased at only half this rate. During this time the unemployment rate in urban areas of Turkey remained fairly stable for males and was on a declining trend for females. Migration directed towards huge metropolises also remained stable, below the pre-1980 levels. As we show below, the absorption problem was initially manifested mainly in the form of declining participation rates. After the crisis of 2000–01 exposed the bankruptcy of the economic policies pursued in the 1990s, however, the national unemployment rate shot up to double-digit levels and the number of the unemployed doubled in three years. In this section we review the recent record with the help of the HLFS data to establish the subtle and not-so-subtle manifestations of the growing absorption problem. We examine the gender and generational differences and interpret them with the help of the material in the previous section. Although the time series we have is fairly short, it allows us to offer a preliminary assessment of the changes that took place as a result of ARIP. Towards that end we treat the period until 1999 as the ―pre-ARIP‖ period and the period after 2000 as the ―ARIP period,‖ and look for evidence of structural breaks. According to Ercan (2007), rural migrants accounted for half of the urban population increase of 9 million during 1990–2000. The flows were dominated by young people: 70 percent of the migrants were between 10 and 29 years of age. These numbers have to be read with caution, because 2000 census data have been subjected to downward revision. Since migration costs have been decreasing over time, circular movements are likely to have replaced permanent ones.

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Decline in Agricultural Employment Data from the HLFS enable us to examine the trends over a 20-year period, 1988–2007. However, several methodological changes took place over time, the most important being sampling frequency. The first HLFS was conducted in October 1988. Between 1989 and 1999, the HLFS was conducted biannually, during the second full weeks of April and October. Starting with 2000, data were collected every month, using a new and larger sample frame. Although TURKSTAT revised the old series using annual population projections obtained from the 1990 and 2000 censuses, the change induced a break in the HLFS series. Finally, in 2007 TURKSTAT produced a revised population count, based on residential registration records. The total population was revised downward but the HLFS database maintained on the TURKSTAT website is yet to be adjusted retrospectively.+ The levels data reported in this paper have to be read with this caveat in mind. In light of past revisions, our sense is that the shares at the level of aggregation that we study will remain relatively stable when the absolute numbers are adjusted. TURKSTAT also stopped updating the HLFS database beyond 2006, pending the population projection revisions. In places we have used data from TURKSTAT Press Releases to display the entire available HLFS series in the relevant figures. In our discussion we focus on the period 1989–2006, with the proviso that the data for 1989–99 are from the ―old‖ (biannual) HLFS, while the data for 2000–6 are from the ―new‖ (continuously implemented) HLFS. In Figure I we plot total agricultural employment along with the gender-specific totals. All three series reveal that employment in agriculture remained stagnant throughout the 1990s (with the exception of a dip in 1993) and took a dive starting in 2000. Arguably the dramatic reduction of 1 million workers between 1999 and 2000 (a drop of more than 20 percent) is attributable to the break induced by the switch from the old to the new HLFS. However, the sustained and precipitous decrease recorded during the ARIP period is indicative of a structural break. Notably, the high plateau (of more than 9 million workers) that is reached in the second half of the 1990s coincides with the peak in agricultural state subsidies. DIS payments, which started in 2001, were entitlements based on ownership of land, and were not initially linked with agricultural activity. Starting in 2003, owner-cultivators became entitled for higher payments linked to input use. It appears that this temporarily arrested the decline (at least in the series for males), but the trend resumed in 2005. There is a net loss of over two million jobs between 2001 and 2006, pulling down total agricultural employment to 6 million people. Further inspection reveals that the higher volatility observed in the ―old‖ series is almost entirely attributable to the volatility in female employment. With the exception of 1989–1991 and 2002, female employment is less than male employment. This development is attributable to the changing labor needs of owner-cultivators brought about by technological change. As agricultural tasks become specialized, men are more likely to be the ones to acquire the skills for doing them. Mechanization, in particular, is likely to drive out more women out than men. The patterns in data support these expectations except for a reversal in the trends during Detailed information on the registration system ADNKS (Adrese Dayalı Nufus Kayıt Sistemi) can be found on the TURKSTAT website. For a summary, see TURKSTAT (2008b). + The HLFS data base can be accessed from the Database link on the TURKSTAT web page: http://www.turkstat.gov.tr/jsp/duyuru/upload/vt_en/vt.htm. In what follows we cite the source as ―HLFS database, TURKSTAT (2008d).‖

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2001–03. When ARIP was launched, there was a cap of 20 ha for eligibility for DIS payments. This led to fictional breakups of some large farms, in which each of the smaller holdings was registered under a different family member. Some of these new farmers were women, who have traditionally been excluded from ownership rights. As we show below, the number of female own-account workers increased during this time, and this narrowed the gender gap. 10000

Thousands

8000 6000

Male Female

4000

All

2000 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d). Figure I. Agricultural employment by gender, 1988–2006.

In Figure II we reexamine the trends after breaking down agricultural employment according to employment status and gender. We observe that the bulk of agricultural employment consists of female unpaid family workers, male own-account workers and male unpaid family workers, in decreasing order of importance. This is reflective of the fact that the small family farm is the dominant operational unit. Adult men assume the role of the head of the household, and own the land and the farm, while women and young men provide the household labor. Regular and casual employees make up as little as five percent of total agricultural employment. The structural break after 2000 where agricultural employment takes a downturn is clear. The employment losses during the ARIP period are almost entirely confined to the male and female unpaid family workers and male own-account workers. Unpaid family workers, regardless of gender, have the fastest declines. The decrease in female unpaid family workers of close to one million corresponds to half of the total decline, while unpaid male family workers and male own-account workers together make up the remainder. The increase in the number of own-account female workers during 2001–03 is the only development that bucks

Although Turkish inheritance law gives male and female offspring equal rights, in practice males exercise control over, and become eventual owners of, their ancestral land. According to the findings of a field research study conducted in eastern and southeastern Turkey in 1997, 61 percent of the women surveyed stated that the inheritance of girl children will be determined according to traditional customs. When asked about what these customs were, 79 percent responded that girl children are obliged by custom to resign the inheritance in favor of their brothers. Besides girls resigning their right to inheritance, another common strategy used to bypass the gender egalitarian inheritance clause of the Civil Code entails fathers registering all property under the names of their sons (Ilkkaracan and Ilkkaracan, 1998). See also Sterling (1957) for a vivid account.

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the trend. This development is the source of the shrinking gender employment gap in this period observed in Figure I. By 2006 the categories of unpaid female family workers and male own-account workers (more than 2 million people each) comprised as much as 71 percent of total agricultural employment, about the same as in 2000, and marginally below the 1988 level of 74 percent. Thus, ARIP appears to have had a small effect on modes of agricultural employment. This is attributable to the dominance of small family farms. The traditional source of labor continues to be household labor, while hired help during the harvest season remains a distant secondary source. Male and female employees (including regular as well as casual workers) average around 350 and 180 thousand respectively, with hardly any change in their absolute numbers throughout the period. Given the decline in the other categories, however, their share in total employment increased from around five percent in the 1990s to around nine percent in the 2000s. This development is consistent with the recent increases in operational sizes observed in the previous section. With eight million people engaged in agriculture in 2001, Turkey had more hands engaged in agriculture than all of the EU-15 combined (6.8 million) at the time when EU membership became a prospect (EUDG-AgRuDev, 2008). We have clear evidence that ARIP boosted the rate at which agriculture sheds labor, and some indication that farm sizes are increasing as well. It may well be the case that both changes will have to accelerate for accession to become a reality. We turn to the examination of the labor absorption record next, in an attempt to gauge the feasibility of a faster transformation. 4500

4000

3500

3000 Unpaid Family Worker F Own Account Worker M Unpaid Family Worker M Own Account Worker F Employees M Employees F

2500

2000

1500

1000

500

0 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: HLFS database, TURKSTAT (2008d). Figure II. Agricultural employment by gender and employment status, 1988–2006.

As we mentioned in the previous section, the ceiling for DIS payments was raised to 50 ha in 2003. This appears to have curbed the short-lived surge in land ownership by women.

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Decline in Labor Force Participation A major manifestation of the agricultural transformation process has been to push former agricultural workers out of the labor force altogether, particularly in the case of women. This is reflected in the declining labor force participation rates. Examination of HLFS data for the 1988–2008 period (Figure III) shows that while the urban male participation rate is on a slow declining trend until the end of the 1990s, it appears to have stabilized at around 70 percent from 2000 onwards. The urban female participation rate is stable throughout the entire period at just around 20 percent. The sustained decline in rural female labor force participation is the main contributor to the decline in the nationwide average during 1988–2008. In the pre-ARIP period, leaving the fluctuations aside, there is a reduction of eight percentage points in the rural female laborforce participation rate (LFPR). During this time the rural male participation rate remained relatively stable. By the end of the 1990s it was above 80 percent, almost double the figure for females. The effect of ARIP is particularly evident in the case of males. The rural male LFPRs take a downward turn from 2000 onwards, registering a drop of more than five percentage points (from 77.9 percent in 2000 to 72.6 percent in 2008). During this period rural female LFPRs continue to decline at the pre-ARIP rate. These sharp declines contrast with the stability in the urban picture. Increases in educational attainment, early retirement, and ageing of the rural population through selective migration, possibly account for some of the decline. Note that the gender gap in participation is striking in both rural and urban locations. The urban gap is higher and remains so, even though it declines from about 60 percentage points in the early 1990s to about 50 percentage points in the late 2000s. The narrowing of the gap, however, is for the most part due to the decline in urban male participation rates. The lower rural gender gap is attributable to the dominance of agricultural employment, and the significance of the unpaid family labor category among the agricultural workforce. The widening of the rural gender gap (from 30–35 percentage points in the 1990s to about 40 percentage points by the late 2000s) is attributable to the decline in the relative share of unpaid family workers. The low urban female participation rate, coupled with the decline in the rural female participation rate, places Turkey near the bottom of the female LFPR rankings not only among the OECD countries, but also in the world. The effect of the decline in the rural male participation rate is to pull down the national average even further, to 47.7 percent in the December 2008 HFLS. As a result, Turkey has the lowest LFPR among not only the EU but also the OECD countries, as of the end of the ARIP period (OECD 2008). The decline in participation signals that the labor absorption problem has been worsening, and paints a grim picture of the employment consequences of the hastened pace of agricultural transformation.

As of 2007 Turkey has the 8th lowest female economic activity rate and the 17th lowest female share of adult employment among 191 countries (United Nations, 2009). According to the ILO Global Employment Trends Brief (ILO, 2007), women‘s average LFPR in 2006 for the Middle East and North Africa was 29.5 percent; for Latin America and the Caribbean it was 52.4 percent, and for South Asia 36 percent. Turkey‘s labor-marketwide female LFPR of 24.8 percent in 2007 is below all of these developing region averages. Also contrast it with the EU-27 average of 55.7 percent and the target rate set by the Lisbon criteria for female employment of 60 percent in 2010. The male participation rate of Turkey at 71.3 percent is closer to the EU-27 average of 77.5 percent (2004).

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TOTAL MALE

Turkey

FEMALE 100

80

60

40

20

0

1988 1992 1996 2000 2004 2008

Urban 100

80

60

40

20

0

1988

1992

1996 2000

2004

2008

2000 2004

2008

Rural 100

80

60

40

20

0

1988

1992 1996

Note: The 2008 LFPR is for the month of December. Source: HLFS database, TURKSTAT (2008d; 2009b; 2009c) Figure III. Labor-force participation rate by location and gender, 1988–2008 (percent).

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125

Parallel to the declining share of agriculture in domestic production and the industrialization-driven pull of urban areas since the 1950s, we observe a masculinization of the workforce. As the next section shows, women retreat from the status of unpaid family workers in agriculture to become urban (and to some extent rural) homemakers. Thus the agricultural transformation process does not bring about a change in the gender relations for rural and migrant women. The preservation of the gender hierarchy is facilitated through a combination of bottlenecks on both the demand and the supply sides. On the demand side, the extent of non-agricultural job creation has not provided a sufficient absorption mechanism for the entire agricultural labor surplus. Women‘s withdrawal from the labor market altogether and their retreat into the traditional role of the homemaker has alleviated the scope of the problem. On the supply side, to the extent that there were absorption opportunities, rural and migrant women were not competing with men. Their relatively lower levels of education presented one obstacle. As of 2003, almost 20 percent of the prime working age female population (age 20–45) had less than primary level education, while for men the rate was substantially lower at 5 percent (HUPSI, 2004). The gender-based division of labor acted as a reinforcing supply-side bottleneck. By assigning the primary responsibility for household and care work to women in the form of unpaid labor, this model suppresses women‘s educational aspirations and leads to intermittent and short-lived participation patterns. The lack of legal and institutional mechanisms to enable the reconciliation of work and family requirements in Turkey further reinforces these supply-side constraints (Ilkkaracan 1998; Ilkkaracan and Acar, 2007). Regularly collected labor force statistics do not capture the status of working children under the age of 15. However, TURKSTAT has relied on occasional surveys (1994, 1999 and 2006) that piggyback on the regular HLFS to track the incidence of child labor (ages 6–17). Based on these surveys, the number (and share in their age group) of 6–14-year-old working children declined from 974,000 (8.5 percent) in 1994 to 320,000 (2.6 percent) in 2006 (Darbaz and Uysal-Kolasin, 2009). Agriculture still accounts for the lion‘s share of child labor (72 percent of girls and 50 percent of boys in 2006). Although the share of working children has declined dramatically since the 1990s, a significant number still serve the needs of small family farms as unpaid family labor.

Changes in the Composition of Non-Participants Having established that a significant segment of the agricultural labor surplus has dropped out of the labor force, we turn to an investigation of the reasons for non-participation as captured by the HLFS. Although the questionnaire has undergone changes, it is possible to compare the responses over time by aggregating to a smaller number of categories. Table VI gives the profiles of non-participating rural men and women in the 1989–99 and 2000–06 sub-periods, using seven categories: ―not looking for a job but able to work,‖ ―seasonal worker,‖ ―busy with housework,‖ ―student,‖ ―retired,‖ ―not able to work,‖ and the residual category ―other.‖ The upper part of the table shows the stocks and changes in absolute numbers of men and women, while the lower part of it, illustrated by Figure IV, shows the shares of each of the seven categories among the row totals given earlier. Figure IV also

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contrasts rural versus urban in the distribution of non-participant males and females among the seven categories for the years 1989 and 2006. The numbers of non-participant rural females increased from 3.8 million women in 1989 to 4.9 million in 1999, and reached 6.5 million by 2006. In the case of rural men the numbers were lower (respectively 1.2, 1.7 and 2.5 million) but the rate of increase was higher. Earlier we implicated increased years of schooling, early retirement, and the ageing of the rural population through migration as potential channels through which a decline in the participation rate could come about. While the three categories of ―students,‖ ―retired,‖ and ―not able to work‖ did register increases in terms of absolute numbers of men and women from 1989 to 2006, there was hardly a change in their shares. In fact, the share of male students among the total male non-participants declined by almost 12 percentage points, from one-third of all non-participants (32.1 percent) in 1989 to one-fifth (20.3 percent) in 2006. Female students as a share of total female non-participants registered a small increase of two percentage points from only 3.9 percent in 1989 to 5.9 percent in 2006. Individuals in the retired category collect a non-negligible pension. The share of retired men among non-participants went up in this period by almost ten percentage points. This amounts to more than one-third of the rise in the total number of male non-participants (1.2 million). By 2006 one in every four male non-participants is retired. This surge can be attributed to the window of opportunity for early retirement that existed between 1992 and 1999. Interestingly, retirement hardly ever seems to be the reason for non-participation for rural women (less than one percent). This is attributable in part to the lower participation rates of women. A more significant reason is the fact that women who work as unpaid family workers do not qualify for pensions. Although life expectancy was increasing, the weight of the ―not able to work‖ category was fairly stable throughout the period, averaging approximately 27 percent of non-participant men and 15 percent of non-participant women. 80

1989 Urban Female 70

1989 Rural Female

60 50

% 40 30 20 10 0 ready to w ork

Panel Iva. Females, 1989.

seasonal w orkers

housew ork

student

retired

not able to w ork

other

Agricultural Transformation and the Rural Labor Market in Turkey

80 70

2006 Urban Female

60

2006 Rural Female

50

% 40 30 20 10 0 ready to w ork

seasonal w orkers

housew ork

student

retired

not able to w ork

other

Panel IVb. Females, 2006. 45 40

1989 Urban Male

35

1989 Rural Male

30

% 25 20 15 10 5 0 ready to w ork

seasonal w orkers

housew ork

student

retired

not able to w ork

other

Panel IVc. Males, 1989. 45 40

2006 Urban Male

35

2006 Rural Male

30

% 25 20 15 10 5 0 ready to w ork

seasonal w orkers

housew ork

student

retired

not able to w ork

Source: HLFS database, TURKSTAT (2008d). Panel IVd. Males, 2006.

Figure IV. Reasons for non-participation: rural versus urban, 1989–2006.

other

127

128

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―Busy with housework‖ is the dominant reason for non-participation provided by rural women. In 2006 almost 4 million rural adult women who define themselves as full-time homemakers make up the bulk of rural female non-participants (60 percent). While almost half of the non-participant men are out of the labor market either because they are preparing for it (students: 20 percent) or enjoying their pension post-participation (retired: 25 percent), more than half of the female non-participants are out of the labor market because they are performing unremunerated labor in the household. Figure IV shows that the urban composition of non-participants is very much the same, with 70 percent of male nonparticipants in the student and retired categories, and an equal share of female nonparticipants who are full-time homemakers. A striking shift in the rural non-participant profile is the expansion of the category ―not looking for a job but able to work.‖ This category is relevant, because it includes discouraged workers. While the share of this category appears negligible in 1989 (3.5 percent for men and 2 percent for women), it can no longer be ignored in 2006 (18.7 percent for men and 6.4 percent for women). This corresponds to almost half a million each of men and women, with the bulk of the registered increase occurring during the ARIP period. The swelling ranks of able-bodied men and women who stop searching for work may be indicative of the dwindling work opportunities in agriculture combined with low rates of non-agricultural employment generation. In the following two sections we follow this lead and show in turn that the decline in agricultural employment disproportionately affected the younger age groups, and that the growth of entry-level non-agricultural jobs has not been high enough to compensate for the losses. In some respects the rural non-participant distribution becomes increasingly similar to the urban one. ―Retired‖ (which is the largest category for urban non-participant males) becomes more important in rural areas, moving from fourth place in 1989 to second in 2006. As the share of ―students‖ and ―other‖ among male non-participants decline for both urban and rural areas, the reverse holds true for female non-participants. The weights of the ―not looking for a job but ready to work‖ as well as the ―seasonal worker‖ categories increase for both male and female non-participants in both locations. ―Not able to work‖ continues to stand as a higher category in the rural setting than in the urban.

Ageing of the Agricultural Workforce Examination of the agricultural employment patterns at different phases of the life cycle reveals useful clues about the evolution of labor markets. We break the life cycle into four phases: entry to employment (ages 15–24), early career (25–34), mid-career (35–44) and late career (45 and above). The four panels of Figure V track the total and gender-specific levels of agricultural employment during the four phases. Note that males and females claim nearly equal shares of agricultural employment except late in their careers. Comparison of the four panels indicates that the employment losses observed in agriculture, beginning in the latter half of the 1990s, are predominantly in entry-level jobs followed by early-career jobs. Notably the employment levels of 15–24-year-old workers have been declining steadily and markedly since the early 1990s, indicating that careers in agriculture had become less attractive even before ARIP entered the picture.

Table VI. Reasons for non-participation by gender in rural areas.

1989 1999 1989–99

Not in labor force M W 1,217 3.831 1.708 4.962 +491 +1.131

Numbers of non-participants (thousands) Not looking for a job but Seasonal Busy with ready to work workers housework M W M W M W 43 83 11 15 – 2.845 249 148 56 70 – 3.478 +206 +66 +45 +55 – +633

Student M 391 471 +81

2000 2006 2000–06

2.011 2.497 +486

5.669 6.560 +891

280 467 +187

129 420 +291

211 78 –133

304 243 –61

– – –

3.926 3.997 +71

1989–2006

+1280

+2729

+424

+338

+67

+229

–

+1.153

1989 1999 1989–99 2000 2006 2000–06 1989–2006

Not in force M 100 100 100 100 100 100 100 100 100

labor W 100 100 100 100 100 100 100 100 100

W 15 53 +38

Not able to work M W 343 571 461 771 +118 +201

Other M 243 161 –83

W 155 194 +39

407 624 +217

32 64 +32

458 674 +216

711 1.105 +394

218 146 –72

363 343 –20

+437

+50

+332

+535

–97

+188

W 150 266 +116

Retired M 188 412 +224

435 507 +72

203 386 +183

+117

+236

Shares of non-participant categories (percent) Not looking for a job but ready to Seasonal Busy with work workers housework M W M W M W 3,53 2,15 0,9 0,38 – 74,3 14,6 2,98 3,3 1,40 – 70,1 +11,1 +0,83 +2,4 +1,02 – –4,2

Student M 32,1 27,6 –4,5

W 3,9 5,4 +1,4

Retired M 15,4 24,1 +8,7

W 0,38 1,06 +0,68

Not able to work M W 28,1 14,9 27,0 15,5 –1,2 +0,65

Other M 20,0 9,4 –10,6

W 4,05 3,90 –0,15

13,9 18,7 +4,8

2,28 6,40 +4,13

10,5 3,1 –7,4

5,36 3,70 –1,66

– – –

69,3 60,1 –8,3

21,6 20,3 –1.3

3,6 5,9 +2,3

20,2 25,0 +4,8

0,56 0,98 +0,41

22,8 27,0 +4,2

12,5 16,8 +4,3

10,8 5,9 –5,0

6,40 5,23 –1,17

+15,2

+4,25

+2,2

+3,33

–

–13,3

– 11,8

+2,0

+9,6

+0,60

–1,2

+1,95

–14,1

+1,18

Source: HLFS database, TURKSTAT (2008d).

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130

The paces of decline are almost identical for men and women. In contrast, employment levels for 25–34-year-old males rose during the 1990s. The decline set in with ARIP and affected both males and females. During this time there are declines in the totals for the midand late-career groups as well. However, the rate of employment loss is lower. The ageing of the agricultural labor force over the period 1988–2006 is easier to document with the help of Figure VI, which shows the shares of the four age groups we identified above. Back in 1988, entrants and late-career workers jointly had the lion‘s share in agricultural employment. Workers entering agricultural careers accounted for 34 percent of the female total and 27 percent of the male total, while late-career workers accounted for 28 percent of the female total and 40 percent of the male total. By 2006 the share of entrants had halved: they accounted for 17 percent of the female and 13 percent of the male agricultural work force. In contrast, late-career workers increased their share (to 38 percent in the case of females, and 47 percent in the case of males). Given the relative stability of the other age groups, we conclude that as young people under 25 left agriculture, those who were 45 and older emerged as the dominant group in the workforce.

3500 3000 Thousands

2500 2000

Male

1500

Female All

1000 500 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel Va. Entry (ages 15–24). 2500

Thousands

2000 1500

Male Female

1000

All

500 0 1988

1990

1992

1994

Panel Vb. Early career (ages 25–34).

1996

1998

2000

2002

2004

2006

Agricultural Transformation and the Rural Labor Market in Turkey

131

2000

Thousands

1500 Male

1000

Female All

500

0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel Vc. Mid-career (ages 35–44). 3500 3000 Thousands

2500 2000

Male

1500

Female All

1000 500 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d). Panel Vd. Late career (ages 45 and above). Figure V. Agricultural employment by age group and gender, 1988–2006 (thousands).

The phenomenon of an ageing agricultural work force in conjunction with the decline in the share of agricultural employment is not unique to Turkey. In fact, as long as the agricultural transformation is accompanied by economic growth, young generations are best placed to exploit the new career opportunities that emerge. The question we turn to next is whether the steady decline in agricultural employment from the mid 1990s onwards in the case of the 15–34 age group was offset by developments in the urban labor market.

Changes in the Prospects of Entry to Non-Agricultural Employment The dualistic model of growth states that the industrialization drive in urban areas creates jobs in manufacturing and services, which act as the channels of absorption of agricultural surplus labor. In 1989 there were 18.2 million workers in the Turkish labor market. Agriculture accounted for 47 percent of the total while services were second at 32 percent, followed by manufacturing at 16 percent, and construction at 5 percent. As of 2006, total employment stood at 22.3 million. The shares of services and manufacturing went up, respectively to 47 and 20 percent, and construction remained stable at 6 percent, while the

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share of agriculture had gone down to 27 percent. Despite the shift in the sectoral distribution of employment away from agriculture, however, the growth of non-agricultural employment seems to have failed to absorb the agricultural labor surplus for female labor from the beginning; and for male labor from the late 1990s onwards, exacerbated by the 2001 economic crisis.

0.50 0.40 15-24 25-34 35-44 45 & above

0.30 0.20 0.10 0.00 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel Via. Males.

0.40 0.35 0.30 0.25

15-24 25-34 35-44 45 & above

0.20 0.15 0.10 0.05 0.00 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d). Panel VIb. Females. Figure VI. Share of agricultural employment by age and gender, 1988–2006 (percent).

The data on non-agricultural employment compiled in Figure VII suggest that entry-level jobs for males have been disappearing steadily after 1997 in manufacturing as well as in construction and services. Entry-level jobs for females, which were substantially below those held by their male counterparts in manufacturing and services (and virtually non-existent in the construction sector), exhibit modest gains throughout the 1990s. However, these appear to have stabilized after 2000. Thus there is absolutely no evidence of increased absorption capacity during the ARIP period. The decline in male entry-level jobs is particularly striking in the case of the construction sector. It is evident that males in the 15–24 age bracket did not benefit from the construction boom of the 1990–99 period, and that the jobs shed in the construction sector over the 2000– 02 period were also concentrated among younger males. Although construction employment

Agricultural Transformation and the Rural Labor Market in Turkey

133

recovered, starting with 2003, the level in 2006 is below that in 2000. Overall services did a better job of generating entry-level jobs, particularly for females, but 226,000 such jobs were lost between 2000 and 2004. These observations suggest that the lure of the urban labor market has been weakening in the late 1990s, and may have disappeared altogether during the post-crash period. Indeed, the decline in rural labor force participation rates (discussed earlier in this chapter) suggests that a significant portion of the rural population failed to exercise the migration option. The global economic crisis, which started having an impact in Turkey in the second half of 2008, has exacerbated the poor absorption capacity of non-agricultural employment even further. 1200

Thousands

1000 800 Male

600

Female All

400 200 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel VIIa. Manufacturing. 300

Thousands

250 200 Male

150

Female All

100 50 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel VIIb. Construction. 1800 1600

Thousands

1400 1200 1000

Male

800

Female

600

All

400 200 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d).

Panel VIIc. Services. Figure VII. Entry to non-agricultural employment, ages 15–24, 1988–2006 (thousands).

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Unemployment Figure VIII displays the available series on unemployment broken down by location and gender. The slow employment-generation rates in urban areas have been accompanied by two-digit urban unemployment rates throughout the period under study. Thanks to the dominance of small family farms, rural unemployment rates have been significantly below the urban rates. This has been the case particularly for rural women, whose unemployment rate fluctuated between two and three percent throughout the 1990s, while the figures for urban women were above 15 percent (yet on a declining trend). While the gap is not as pronounced in the case of men, rural male unemployment rates remained at around half those of urban males (4 percent versus 9–10 percent).

9 8 7 6 Male

5

Female

4

All

3 2 1 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Panel VIIIa. Rural areas (population 20,000 or less).

30 25 20

Male Female

15

All

10 5 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d). Panel VIIIb. Urban areas. Figure VIII. Unemployment rate by location and gender, 1988–2006 (percent).

After 2000 both the rural and the urban unemployment rates shot up. While the 2000–01 economic crisis is likely to be the main culprit, we should not forget that ARIP was launched during this time. Urban rates peaked at 13 percent for men and 18.7 percent for women, and started coming down after 2002. In contrast, rural unemployment rates rose steadily and almost doubled in the ARIP period (from 4.9 percent for rural men and 2 percent for women in 2000, to 8.2 percent and 4.1 percent respectively in 2007). As we documented earlier,

Agricultural Transformation and the Rural Labor Market in Turkey

135

absorption problems of surplus labor were exacerbated during this time. All indications are that all the unemployment statistics are headed for new records as a result of the global slowdown that started in 2008. The evolution of ―non-agricultural‖ rural unemployment rates followed the rural trend, albeit at levels that equaled or exceeded those in urban areas.+ In 2000 rural non-agricultural unemployment rates were almost the same for men and women (respectively 10 and 11 percent). By 2006 the male rate reached 12.1 while the female rate shot to 19.2 percent, indicating that rural areas were hosting a significant share of the reserve army of nonagricultural employment seekers. The dramatic increases in the numbers of active job seekers would not have been possible without the improvements in communication (knowledge dissemination), transportation, and other amenities that reduced the handicaps of residing in rural areas.

The Rural Labor Market In the previous section we found evidence that the faster decline in agricultural employment associated with the hastened pace of transformation during the ARIP period exacerbated the labor absorption problem. In this section we bring the rural labor market into focus and look for additional evidence that can help delineate the contours of change. In particular we look for evidence that the distinction between rural and urban labor markets might be withering away, as rural areas became better articulated with the rest of the country. We continue to work with the HLFS data and bring in evidence from other sources. In Figure IX we track over time the shares of agricultural and rural employment in total employment, and the share of agricultural employment in rural employment. We already documented the declining share of agricultural employment in total employment earlier; we show it here for comparison. The figure suggests that the share of rural employment in the total is declining in lock-step with that of agricultural employment. But there is a subtle change: before 2000, the share of agriculture in rural employment was stable at around 80 percent. After 2000 it started to decline. During 2002–4 it was in the low 70s, and during 2005–6 in the high 60s. In fact, the share of agriculture in rural employment underwent a steeper decline than the other two numbers over the period 2004–6. This suggests that the rural economy might be becoming more diverse over time. We examine different aspects of this diversity next.

According to the February 2009 TURKSTAT news bulletin, the ranks of the unemployed swelled by 1.1 million in one year as the unemployment rate shot up from 11.9 to 16.1 percent. During this time the rural unemployment rate increased from 8.5 to 11.9 percent (TURKSTAT, 2009a). Although Turkey has had an Unemployment Insurance (UI) system since March 2002, only a small segment of the unemployed population stands to benefit from it (Tunali et al., 2003). Based on the most recent data available (February 2009), those collecting UI benefits accounted for 7.4 percent of the unemployed total (3.8 million). Since the UI system covers non-governmental regular wage workers who have social security coverage, it has an urban bias. + The non-agricultural unemployment rate is the ratio of the unemployed workers who are looking for a job in the non-agricultural sector to the total non-agricultural labor force. The rural version is calculated for individuals residing in rural areas.

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1 0.8 Ag share

0.6

Rural share Ag share in Ru

0.4 0.2 0 1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Source: HLFS database, TURKSTAT (2008d).

Figure IX. Shares of agricultural and rural employment in total employment, and share of agricultural employment in rural employment.

Withering Career Prospects in Rural Areas Earlier in this chapter we examined the age composition of the agricultural workforce and concluded that it was ageing. Since younger generations are better educated, one possibility is that younger workers have other more attractive job prospects, and refrain from careers in agriculture. The question we examine in this section is how careers in rural areas have panned out for different generations over time. We achieve this by using synthetic cohort analysis with several rounds of cross-section data from the HLFS (for 1990, 1995, 2000, and 2005) to track birth-cohorts over time. The youngest cohort observed in a given cross section consists of people in the 15–19 age group. In the 1990 HLFS data, this youngest age group contains people born between 1971 and 1975. We follow the 1971–75 birth cohort and observe them as 20–24 year olds in the 1995 HLFS, as 25–29 year olds in the 2000 HLFS, and finally as 30–34 year olds in the 2005 HLFS. Using this methodology we are able to follow eight five-year cohorts (namely those born in 1971–75, 1966–70, 1961–65, 1956–60, 1951–55, 1946–50, 1941–45, and 1936–40) for four periods that span 20 years each. The age profiles of employment for these birth cohorts are given in Figure X. In addition we are able to follow the 1976–80 cohort for three periods (using the HLFS for 1995, 2000, and 2005) and the 1981–85 cohort for two periods (using the HLFS for 2000 and 2005), and get to observe the 1986–90 cohort once (in the HLFS for 2005). In order to keep the pictures manageable, we do not show the profiles for these cohorts. All available data are compiled in Tables IX and X. To the degree that employment prospects in rural areas mimicked those in the urban labor market, we would expect to see a concave age profile. Employment rates would increase with age, at a rate that captures the speed of the transition from school to work. They would eventually reach a peak (and possibly a plateau) and start to come down. In the case of females, marriage and child bearing emerge as important life-cycle events that may trigger early withdrawal from the labor market. Employment rates of both genders would eventually come at a rate determined by the generosity and selectivity of the retirement prospects. Viewed altogether, the profiles for males shown in Panel Xa conform to the expected pattern. Upon closer inspection, however, we see that the profiles of the younger cohorts peak and turn down prematurely, before they reach mid career. Furthermore, there is evidence that

Agricultural Transformation and the Rural Labor Market in Turkey

137

the profiles of older cohorts are above those of younger cohorts at later points in the life cycle. Thus, there is evidence that employment prospects declined across the board in 2000, followed by a sharper drop in 2005. In the case of women (Panel Xb), the usual life-cycle pattern appears to have disappeared altogether. With one exception (observed for the 1951–55 cohort between 1990 and 1995), the cohort-specific profiles are sloped downward for each and every life-cycle segment. That is, regardless of their starting level (in 1990), women from a given cohort were employed at a lower rate five years later (in 1995), at an even lower rate 10 years later (in 2000), and at the lowest rate yet 20 years later (in 2005). This striking and pervasive pattern of exit is attributable to the declining importance of agriculture and in particular the type of agriculture centered on the small family farm, which constitutes the main source of employment for women in the capacity of unpaid family workers. Reading Panel Xb vertically across cohorts but at a given segment of the life cycle, we see that access to employment is decreasing from one generation of rural women to another. For instance, when the cohort of 1971–75 reached the age of 30–34 in 2005 they had an employment ratio below 38 percent. The previous cohort (born during 1966–70), which reached this point in 2000, had a higher employment ratio of 42 percent. 1.0

1956-60

1951-55

1946-50 1941-45

1961-65

0.9

1936-40

1966-70

0.8 0.7

1944-48

Born 1971-75

0.6 0.5 0.4 0.3

0.2 0.1 0.0 15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65+

Panel Xa. Males. 0.7

1951-55

0.6

1966-70

1961-65

1946-50

1941-45

1936-40

1956-60 1944-48

0.5

Born 1971-75 0.4

0.3

0.2

0.1

0.0

Doğum 1969-73 15-19

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65+

Source: HLFS database 1990, 1995, 2000, 2005, TURKSTAT (2008d).

Panel Xb. Females. Figure X. Age profiles of employment rates by birth cohorts in rural areas, by gender (percent).

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Notably the cohorts (born during 1956–65) that reached this point in the 1990s achieved considerably higher employment ratios, of above 50 percent. Drops of similar magnitudes are evident among 35–39 and 40–44 year olds. The faster pace of transformation appears to have had an adverse effect on the employment prospects of younger generations of women, who reached working ages during the ARIP period. Both the 1976–80 and 1981–85 cohorts were less likely to enter employment at age 15–19 and lagged considerably behind older cohorts when they reached age 20–24 (see Table A1). Note that for the youngest cohort (born during 1986–90) the average employment rate at age 15–19 was only 34.5 percent for men and 22.8 percent for women. This is the first cohort that was affected by the extension of compulsory education to eight years. There is evidence that enrollment in high school also increased as a consequence (see Tunali and Yuret, 2009). It remains to be seen how this will influence the employment prospects of the young cohorts in later years. Table IX. Age profiles of employment rates by cohort, rural males (data for Figure X). Age: Cohort: 1986–90 1981–85 1976–80 1971–75 1966–70 1961–65 1956–60 1951–55 1946–50 1941–45 1936–40

15–19 0,346 0,524 0,540 0,600

20–24 0,622 0,703 0,748 0,789

25–29

0,800 0,852 0,880 0,885

30–34

0,851 0,878 0,939 0,918

35–39 40–44 45–49 50–54

0,867 0,908 0,944 0,948

0,881 0,909 0,934 0,946

Source: HLFS database, 1990, 1995, 2000, 2005, TURKSTAT (2008d).

0,830 0,877 0,740 0,915 0,804 0,915 0,863 0,551

Table X. Age profiles of employment rates by cohort, rural females (data for Figure X). Age:

15–19

20–24

25–29

30–34

35–39

Cohort: 1986–90 0,228 0,338 1981–85 0,361 0,392 0,332 1976–80 0,485 0,511 0,432 0,367 1971–75 0,542 0,547 0,511 0,422 0,401 1966–70 0,525 0,513 0,445 1961–65 0,537 0,527 1956–60 0,566 1951–55 1946–50 1941–45 1936–40 Source: HLFS database, 1990, 1995, 2000, 2005, TURKSTAT (2008d).

40–44

0,426 0,463 0,569 0,595

45–49

0,435 0,473 0,564 0,590

50–54

0,402 0,461 0,544 0,551

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Skill Mismatch and Declining Prospects for Absorption in the Urban Labor Market As we pointed out earlier in this chapter, Turkey chose to open up its economy and to compete in the global arena through a series of reforms implemented between 1980 and 1990. Given the strong forces of globalization in the period under examination, exports based on cheap labor have been drying up. Hence, the need to climb up the skill and productivity ladder is more urgent than ever. In this section we examine the skill levels of the workforce and the prospects for absorption of the agricultural workforce in non-agricultural jobs. Tables VII and VIII show the skill (educational attainment) composition of the different sectors, and give overall averages as well as the numbers disaggregated by gender for the years 1989 and 2006 respectively. The educational composition of employment is very different in urban areas. Low levels of educational attainment of the rural population stand as a major obstacle to the absorption of the agricultural labor surplus into urban non-agricultural employment. This leaves a huge reserve army of uneducated or unskilled workers who have stopped participating altogether. Table VII. Composition of sectoral employment by education, 1989 (percent). Illiterate (%) Five-year primary or Eight-year High school (%) less (%) primary or junior high (%) Agriculture All 29.7 65.2 3.0 2.0 M 18.3 73.5 4.6 3.4 F 41.0 56.9 1.3 0.7 Construction 9.4 76.4 5.6 5.4 9.3 76.8 5.6 5.2 10.0 40.0 10.0 30.0 Manufacturing 4.7 70.1 9.9 11.6 3.0 70.9 10.2 11.8 12.7 66.4 8.7 10.7 Services 4.2 52.2 12.2 17.7 3.9 57.2 12.5 15.3 6.5 22.1 10.4 32.0 Total 16.7 62.4 7.1 8.7 9.0 66.8 8.8 9.8 33.5 52.7 3.3 6.1

Source: Authors‘ calculations from HLFS database, TURKSTAT (2008d).

University (%) Total (%) 0.1 0.2 0.0 3.2 3.1 10.0 3.7 4.1 1.6 13.7 11.2 29.1 5.2 5.5 4.4

100 100 100 100 100 100 100 100 100 100 100 100 100 100 100

In 1989 one out of eight jobs in manufacturing was held by an illiterate woman. At this time two women out of five engaging in agriculture were illiterate. In 1989, while 98 percent of the female agricultural workforce (and 92 percent of the male) had five years of primary education or less, 78 percent of the female manufacturing workforce (and 74 percent of the male) had this level of education. In 1989 getting manufacturing jobs in urban areas was not a far-fetched possibility as far as rural migrants were concerned. In 2006, by contrast, only one out of 25 jobs in manufacturing was held by an illiterate woman. At that time one out of four women in agriculture was illiterate. In 2006 half of the jobs (48 percent) in manufacturing required more than five years of primary education. Only six percent of the women in agriculture (and 20 percent of men) have more than five years of primary education. The

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prospect of getting a manufacturing job has seriously diminished for rural migrants, particularly for women. Table VIII. Composition of sectoral employment by education, 2006 (percent).

Agriculture

Construction

Manufacturing

Services

Total

Illiterate (%) Five-year Eight-year High University Total (%) primary or primary or school (%) less (%) junior high (%) (%) All 16.4 69.9 6.3 6.4 0.9 100 M 7.2

72.5

9.3

9.6

1.5

100

F 27.0

66.9

2.9

2.8

0.3

100

2.4

60.4

13.0

17.2

6.9

100

2.5

61.9

13.1

16.4

6.1

100

0.0

11.1

11.1

44.4

33.3

100

1.4

50.3

14.2

26.2

7.8

100

0.8

49.9

14.9

27.0

7.4

100

4.2

52.1

11.5

22.6

9.6

100

1.3

34.8

12.8

28.7

22.3

100

1.0

38.2

14.5

28.3

18.0

100

2.4

21.4

6.4

30.5

39.3

100

5.5

48.8

11.3

21.5

12.8

100

2.3

49.2

13.4

23.4

11.6

100

14.5

47.6

5.4

16.1

16.3

100

Source: Authors‘ calculations from HLFS database. TURKSTAT (2008d).

In the case of males, construction still offers jobs that have a similar education profile to those found in agriculture. However, construction accounts for only a small portion of overall non-agricultural employment. As shown above, this already small share was also drastically reduced after the 2000–01 crisis, and despite the pick-up in 2004, employment is yet to reach the levels recorded in the 1990s.

Non-Agricultural Employment Prospects in Rural Areas Consistent with the dualistic paradigm, until the turn of the century agricultural employment and rural employment were almost synonymous. Based on annual HLFS data, almost 77 percent of all rural employment in 1989–90 was in agriculture. Between 1989–90 and 1995–6, when agricultural employment reached its peak, there was no change. A decade later, the share of agricultural employment was below 60 percent and on a declining trend. Over the 20-year period spanned by the HLFS, agriculture accounted for a small, stable share of the urban workforce, around five percent.

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18 16 14 12 10

1989-90 1995-96

8

2005-06

6 4 2 0 Manufacturing, Mining and Utilities

Construction

Wholesale and Retail Commerce

Communication and Logistics

Financial Services

Social and Personal Services

Panel Xia. Share of rural non-agricultural employment by sector, males (percent). 7 6 5 4 1989-90 1995-96

3

2005-06

2 1 0 Manufacturing, Mining and Utilities

Construction

Wholesale and Retail Commerce

Communication and Logistics

Financial Services

Social and Personal Services

Panel XIb. Share of rural non-agricultural employment by sector, females (percent). 1200

1000

Thousands

800

1989-90

600

1995-96 2005-06

400

200

0 Manufacturing, Mining and Utilities

Construction

Wholesale and Retail Commerce

Communication and Logistics

Financial Services

Social and Personal Services

Source: HLFS database, TURKSTAT (2008d). Panel XIc. Total rural non-agricultural employment by sector (thousands). Figure XI. Non-agricultural employment in rural areas over time.

The increase in the share of non-agricultural jobs in rural areas from 23 percent in the 1989–96 period to 41 percent in 2005–6 was accompanied by an almost 40-percent increase in the number of non-agricultural rural jobs (from around 2.5 million to 3.7 million). The sectoral composition of non-agricultural employment in rural areas is displayed in Figure XI, at three points in time (1989–90, 1995–6 and 2005–6). The first two panels show the employment shares of six non-agricultural sectors, respectively for males and females, while the third panel displays the totals in each of the sectors. The increased pace of diversification can be gleaned from all three panels. The last panel underscores the fact that diversification captured by the shares is not simply a statistical consequence of the decline in agricultural

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employment. We see that expansion of wholesale and retail commerce (which includes hotels and restaurants) accounted for the bulk of the increase in non-agricultural employment opportunities during the post-ARIP period. The expansion of manufacturing employment has been taking place at a constant pace of about 100,000 jobs every five years. Expansion of financial, social and personal services, despite a declining population base, suggests that the rural areas are catching up with urban areas in terms of amenities. Notably, rural men obtained the lion‘s share of the new employment opportunities, as three quarters of the increase in rural non-agricultural jobs was absorbed in male employment. The signs for economic diversification and the obstacles to rural development are recognized in a recently published policy document of the State Planning Organization (DPT, 2006). One of the points underscored there is the dispersion of the rural population. According to the report, there were around 35,000 villages and more than 40,000 settlements linked to villages in 2005. According to the General Census of 2000, 41.7 percent of the villages had 250 or fewer inhabitants. It is clear that the size of the typical rural settlement is far below what may be needed for breaking their dependency on agriculture and husbandry. Fragmentation also stands in the way of delivering basic health and education services. The report mentions that while 73 percent of all schools providing eight years of basic education are in villages, the share drops to seven percent in the case of secondary schools.

Obstacles for Women in Rural Areas In the last two subsections we established first that technological change is driving women out of agriculture in larger numbers than men, and then that the skill requirements of non-agricultural jobs provide even a larger obstacle for rural women‘s absorption prospects in non-agricultural employment compared with those of men. Furthermore, the low rates of labor-force participation of urban women with primary or secondary school education suggest that, even when women have the skills that a majority of the male workforce has, they face additional challenges in entry into the paid workforce. While the participation rates of urban women do increase with the number of years of schooling, the rise is only minimal from around 13 percent for those with primary school education to around 30 percent for highschool graduates. The real jump occurs at the university level, to 70 percent (HLFS 2000–08). The question that remains to be answered, then, is whether rural women stand much chance in getting non-agricultural jobs in rural areas. A major challenge to increasing female LFPRs lies in a supply-side bottleneck embedded in the gender-based division of labor, assigning women‘s primary responsibility to production in the home, and men to engagement in market work. There is a two-way relationship between the division of labor and gender roles such that gender roles reinforce the division of labor, while the division of labor itself strengthens the gender roles. The nature of this interaction plays a significant role in household decisions with respect to investments in girls‘ versus boys‘ education. It also influences older children‘s own decisions in continuing their education, their choice of occupation and types of jobs, their participation in on-the-job training, and consequently time spent in market versus non-market work. The lack of legal and institutional mechanisms for reconciliation of work and family responsibilities reinforce the gendered division of labor further. Time-use data that have recently become available for

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Turkey provide further testimony to the gendered nature of market versus non-market production patterns. TURKSTAT‘s Time-Use Survey, conducted nationwide for the first time in 2006, reveals useful insights with respect to women‘s and men‘s as well as urban versus rural allocation of time between market and non-market work (TURKSTAT, 2008a). The aggregate data show that rural women perform seven hours of labor on the average (combined market and nonmarket labor) versus five hours and 12 minutes by rural men, six hours by urban women, and five hours 21 minutes of labor daily for urban men. Rural women who also participate in the labor market report a daily eight hours and 32 minutes of market and non-market work combined. This amounts to almost 60 work hours weekly and represents the heaviest work load among all categories (higher than participant urban women and men). On the average, women allocate more than 80 percent of their total working hours to household and child care, while men allocate 84 percent of total working hours to market work (TURKSTAT, 2008a). The gender gap in labor hours is particularly pronounced in the case of young women and men (15–24 age category) with less than primary schooling. Young women with low education perform three hours and 21 minutes more work on average than their male counterparts. In the same age–education category, men report spending an average of 52 minutes daily on educational activities versus only 13 minutes for women.+ These findings also shed light on the low underemployment rates observed for women, especially rural women (averaging around one percent in the 2000–06 period versus six percent for rural men). It is highly improbable for rural women to be underemployed given their load of reproductive work, as evidenced by their working hours cited above. Considering the higher birth rates and limited access to health and educational services, combined with lower standards of household technology, rural women are more likely to be overworked rather than underemployed.

CONCLUSION In this chapter we analyzed the recent changes in rural labor markets by situating them within the context of nearly six decades of agricultural transformation. We have clear evidence of significant technological change in agriculture facilitated by capital accumulation (mainly mechanization and irrigation) and biological–chemical innovations (hybrid seeds, fertilizers, pesticides and insecticides, and crop rotation). Both changes affect labor use in different ways: mechanization typically reduces the need for labor, but introduction of highyielding varieties and new cash crops facilitated by irrigation mitigate the pace of reduction. Biological–chemical innovations that improve yields are typically seen as land augmenting, but they call for increased labor use as well. However, skill requirements also increase. Itinerant members of the household may no longer qualify for farm work or have better

These are aggregate average figures as reported by TURKSTAT for a population sample of age 15 and above. Daily average means divided over seven days of the week; hence weekly work hours should be calculated by multiplying the daily averages by seven. + The average market versus non-market work and educational activity hours disaggregated by gender, age and education group based upon the Institute‘s Time Use Survey 2006 was provided upon written official request to the Turkish Statistical Institute.

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options off the farm. In sum, the implications for labor are complex, and require empirical verification. Of particular interest for us were the labor market manifestations of the Agricultural Reform Implementation Project (ARIP), which was implemented in 2001. In brief, a successful transformation is expected to proceed in two phases. The first is the release of surplus labor from agriculture through elimination of low-productivity small family farming. The second is the absorption of the rural labor surplus, initially in urban and later in rural nonagricultural production. ARIP appears to have accomplished the first phase with some success. The number of people employed in agriculture has undergone a drastic reduction of two million workers in a short span of seven years. Furthermore, the targeted categories of unpaid family workers and own-account workers account for the bulk of the reduction. However, it is also evident that younger and potentially productive members of the household are disproportionately represented among those leaving agriculture. More significantly, the second phase is imbued with myriad problems. Neither nonagricultural job generation nor high-productivity market-oriented agricultural employment exhibits the potential for absorbing the large numbers of workers displaced from small farming. To be sure, the economic crisis of 2000–01 that coincided with the launch of ARIP had a hand in this outcome. Yet the sheer size of the workforce involved in small farming was arguably far too big, and had serious human capital impediments to facilitate easy absorption even without the added obstacles of the recession in the economy. It could well be the case that the government saw this early on, and brought back input supports to arrest the employment decline. The unabated decline in labor-force participation rates and the trend for rising unemployment, in particular for the young and the women, suggest that this effort fell short. Early indications are that the global crisis that struck in 2008 will be pushing the urban unemployment rates to unprecedented levels. Since the jobs being shed were concentrated in industry and services, the share of agricultural employment actually went up slightly in 2008. Yet the trends in farm size and the changes in the composition of the agricultural workforce indicate that the agricultural transformation is proceeding at near-to-full speed. It appears that farmers hold on to their land, but increasingly use household labor in other activities as the rural economy diversifies. Since improved communication and transportation channels make it possible to remain in rural areas without losing touch with the urban labor market, the rural labor market in the post-ARIP period displays some key features of the urban one, such as declining participation and increasing unemployment rates.

ACKNOWLEDGMENTS Tunali would like to acknowledge the visit to the University of Michigan Economics Department that created the opening for work on this project. We are grateful to Bengi Yanik Ilhan for her tireless expert assistance in preparing tables and figures using various TURKSTAT data sources. We would like to thank Baris Tartici for his detailed comments on an earlier draft, and Hasan Dudu and Erol Cakmak for sharing with us results from micro data collected as part of the ARIP evaluation effort.

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Tunali, I., with Umit Akcigit, U., Baslevent, C., Ercan, H. & Ozturk, O.D. (2003). Background Study on the Labor Market and Employment in Turkey. Torino, Italy: European Training Foundation. Tunali, I., & Yuret, T. (2009). Impact of extended compulsory primary education on high school enrollments in Turkey: Human capital and sorting models reconsidered. Mimeo. Koc University, Istanbul. TURKSTAT (Turkish Statistical Institute) (2008a). Zaman Kullanım Istatistikleri 2006 (Time Use Statistics 2006). Ankara: Turkish Statistical Institute. TURKSTAT (Turkish Statistical Institute) (2008b) Address Based Population Registration System 2007, Population Census Results. Press Release No: 9, January 21, 2008. Ankara: Turkish Statistical Institute. Accessed as http://www.turkstat.gov.tr/ PreHaberBultenleri.do?id=3894 TURKSTAT (Turkish Statistical Institute) (2008c). 2006 Agricultural Holding Structure Survey. Press Release no. 196, December 17, 2008. Ankara: Turkish Statistical Institute. Accessed as: http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=3977 TURKSTAT (Turkish Statistical Institute) (2008d). Labor Force Survey, Dynamic Search Engine. Ankara: Turkish Statistical Institute. Accessed as: http://www.tuik.gov.tr/ isgucueng/Basla1.do TURKSTAT (Turkish Statistical Institute) (2008e). Statistical Indicators, 1923–2007. Publication No. 3206. Ankara: Turkish Statistical Institute. Accessed as: http://www.turkstat.gov.tr/yillik/stat_indicators.pdf TURKSTAT (Turkish Statistical Institute) (2009a). Household Labor Force Survey for February 2009 (January, February and March 2009). Press Release no: 85, May 15, 2009. Ankara: Turkish Statistical Institute. Accessed as: http://www.turkstat.gov.tr/ PreHaberBultenleri.do?id=4054 TURKSTAT (Turkish Statistical Institute) (2009b). Household Labor Force Survey for 2007. Press Release No: 36, March 6, 2008. Ankara: Turkish Statistical Institute. Accessed as: http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=1933 TURKSTAT (Turkish Statistical Institute) (2009c). Annual Results of the Household Labor Force Survey, 2008. Press Release No: 79, May 8, 2009. Ankara: Turkish Statistical Institute. Accessed as: http://www.turkstat.gov.tr/PreHaberBultenleri.do?id=4061 United Nations (2009). Demographic and Social Statistics: Statistics and indicators on women and men. UN Statistics Division. Accessed as: http://unstats.un.org/unsd/ demographic/products/indwm/tab5a.htm World Bank (2006). Turkey: Labor market study. Washington, D.C.: World Bank. World Bank (2008). World Development Indicators Online Database. Washington, D.C.: World Bank. Accessible to subscribers via http://www.worldbank.org/

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 8

AGRICULTURE IN TURKEY TOWARDS A NEW CLIMATIC ERA: PROSPECTS AND CHALLENGES Ali Kerem Saysel Institute of Environmental Sciences, Bogazici University, Turkey

ABSTRACT Agriculture is generally accepted as one of the sectors most vulnerable to anthropogenic climate change. Although the climate science community is able to create likely projections of expected weather patterns, the overall impact on the total resource base of agricultural production and the expected socio-economic response in technological, managerial, and political terms are highly uncertain. Yet, by considering the scientific knowledge on projected climate patterns and on their direct impact on production at the farm level as a starting point, it is possible to create insights as to the likely paths of agricultural adaptation to climate change. For Turkey, climate projections predict increasing surface temperatures (an increase of 2–6°C by 2070–2090 compared with 1960–1990, according to IPCC‘s SRES A2 scenario) and decreasing precipitation patterns (of up to 35 percent in the Mediterranean basin) by the end of this century (Karaca, Sen and Kindap, 2007). Longer growing seasons, heatwaves and water stresses will become the major constraints and limiting factors in crop choices and for yields. From the western to the central and southern regions of Turkey, comprising the largest and most productive arable lands, the expected net reduction in the difference between precipitation and evapo-transpiration (P–E) is particularly alarming. This chapter reviews the environmental and social characteristics of agriculture in Turkey, the likely patterns of climatic change, and its possible consequences on the agricultural sector, fundamentally at the farm level. It argues for short-term and long-term policy options aiming to strengthen the farmers‘ adaptation potential, and addresses the research gaps in building informed agricultural adaptation strategies.

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INTRODUCTION As this chapter was being written (in the summer of 2008) Turkey experienced the second-worst destructive forest fire in its recent history, on its southern and western coastlines. Fires around the southern province of Antalya alone have affected more than 12 thousand hectares and completely destroyed more than 5 thousand hectares of land that had been occupied by diverse endemic Mediterranean forest stands (TMMOB, 2008). The conditions of agricultural drought over the last two years have caused complete crop failures and yield losses of up to 40 percent on average on dry-land farmlands in certain regions, in both winter and summer crops. The national average loss in 2007 for cereals production was more than 15 percent and it was even higher for legumes, which constitute the second staple food crop in Turkey (TUIK, 2008). In 2007 in central, mid-western and northwestern Turkey, and in 2008 in the southeast of the country, farmers growing rain-fed winter cereals had to abandon thousands of hectares of farmlands and let their cattle in for grazing on what remained from drought and heatwaves. In many wetlands in the country the water levels were at historic lows, and this also created water stresses on small-scale irrigated agricultural systems, and resulted in significant yield losses. From the climate-science perspective, these observations alone cannot be considered as evidence for anthropogenic climate change. On the other hand, they strikingly parallel its projected impacts on Turkey. A selected summary of climatic projections for the eastern Mediterranean in the 21st century suggests that: Turkey will remain under the influence of a warmer and drier climate. The duration and intensity of summer droughts will increase. The coverage of arid and semi-arid areas will expand towards the north. The frequency and influence of forest fires will increase. The change in timing and quantity of runoff from winter snow cover will negatively influence the irrigation water availability. (Turkes, Sumer and Cetiner, 2000) Thus, warmer and drier weather and longer and more severe dry periods, with their combined impact on water budgets, will become the major limiting factors in agricultural production. The recent events suggest that Turkey may already be experiencing the impending consequences of the building atmospheric greenhouse gas concentrations. Less is known about the impacts of climate change on the larger resource base of agriculture, such as crop genetic diversity, soil nutrient availability, fauna, and the like, and least is known about the likely long-term adaptive technological, behavioral, and political responses. Climate does not influence agriculture only through temperature changes and water availability, but it affects all of the natural resources that provide the basis of agricultural production (Rosenberg, 1992). For example, soil generation processes depend on the climate. Increased atmospheric carbon dioxide (CO2) concentrations accelerate photosynthesis and stimulate plant growth. CO2 fertilization alters the crops‘ carbon:nitrogen nutrient ratios, which may influence the size and diversity of predator insect populations (see, CO2 fertilization is the enrichment of the atmosphere surrounding a plant or crop (that is, the canopy of the crop) by increasing concentrations of CO2. Wheat, rice and soybean yields increase with increased CO2 concentrations, while the yield response of maize and millet is relatively low.

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for example, Battisti (2008)). In warmer conditions, increased soil microbial activity can accelerate organic decomposition and lead to reduced soil nutrient availability (Reilly, 1996). The unknowns of likely social response to uncertain natural impacts raise even more difficult questions (Burton and Lim, 2005). The impacts of climate change and the technological, behavioral and political responses of societies, the process called ―adaptation‖ in standard climate science terminology, emerge over time. Rosenberg (1992) claims that the standard question posed on this matter is ―how the world of today would be impacted if the climate were to change instantaneously,‖ and argues that this may not be the right question to ask. It is fair to claim that, for a long-term comprehensive analysis of agricultural adaptation problems, beyond the knowledge gap on the impacts on the larger agricultural resource base, a dynamic systems analysis of social change is required. To achieve this, researchers need to cross the boundaries of individual disciplines (such as agricultural sciences, water sciences, behavioral sciences, and so on) and adopt systems methodologies. This chapter focuses on what might be called the easier aspects of the larger problem of adaptation. That is, climatic projections and their likely direct impact on agriculture, mostly at the farm level, are considered. First, the agricultural sector in Turkey is introduced with figures on its climatological characteristics, land and water resources, production, inputs, and the structure and size of landholdings. After that, the best scientific knowledge on expected anthropogenic climate change in Turkey is summarized; this is fundamentally based on the research assembled by the Intergovernmental Panel on Climate Change (IPCC) and on other national analyses. Next, available adaptation strategies to the conditions of higher temperatures, longer growing seasons, heatwaves, and water stresses are summarized, and short- and long-term strategies are proposed. The chapter concludes with a discussion and critique of the current adaptation efforts as an overreaction to the recently experienced climatic events, and proposes adaptation strategies emphasizing farmers‘ cooperation and control on the resource base of agricultural production.

TURKEY’S AGRICULTURAL ENVIRONMENT Turkey is located between the 36° and 42° north parallels and the 26° and 45° east meridians, and exhibits temperate and semi-arid Mediterranean climatic characteristics. According to Thornthwaite‘s moisture index (which identifies moisture conditions with respect to agricultural production) almost two-thirds of the country lies in the range between generally dry and generally moist climates. (Erinc, 1950; Cicek, 1995). Based on the 1971– 2000 data, average annual surface temperatures vary between 3°C in the northeast and 20°C in the south. For the same time span the average annual precipitation is 654 mm, and it varies between 200 mm in mid Anatolia to 2200 mm along the northeastern coastline of the country (see Figures I and II).

Adaptation, according to its standard definition, refers to ―adjustments in ecological, social or economic systems in response to actual or expected climatic stimuli and their effects or impacts. It refers to changes in processes, practices, and structures to moderate potential damages or to benefit from opportunities associated with climate change‖ (IPCC, 2001:879).

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Source: Sensoy, 2000 Figure I. Mean annual temperature in °C (1971–2000).

Source: Sensoy, 2000 Figure II. Mean annual precipitation in mm (1971–2000).

The geographical and seasonal distribution of water budgets—the difference between precipitation and evapo-transpiration (P–E)—is a key measure in assessing the agronomic potentials of the country. In Turkey, for all regions except the northeastern coastline, there are water deficits on arable lowlands between the fifth to sixth and the ninth to tenth months of the year. The duration and intensity of the deficits are larger in the inner regions and the southeast (Erinc, 1950; Cicek, 1995). The Central and Southeastern Anatolian regions are particularly poor in natural agricultural water reserves. Because of this characteristic of

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seasonal water budgets, agriculture in Turkey has traditionally been based on winter cereals and legumes such as wheat and lentils, which benefit from the autumn and winter surpluses. These crops derive from some of the most genetically diverse origins (Mannion, 1995:51). Water budget deficits in summer limit the production of summer crops. Traditionally, during this season arable lands are either totally abandoned or cultivated in a small way (for maize and oilseeds) in regions having the potential to transfer the winter surpluses to the summer, by using either natural or artificial means of water storage. Especially since the 1960s the construction of extensive, centrally planned and state governed irrigation works, and, later, the introduction of privately owned deep motor wells, have helped to overcome the water constraint on agricultural production. Total arable lands in Turkey (excluding forests, shrubs, pastures, and meadows) are 27.7 million hectares, 8.5 million of which is classified as suitable for irrigation in economically feasible terms (DSI, 2008). Currently, almost all arable lands are in use for seasonal and perennial crops (or are fallow), or are used as gardens, or for vines and olives (TUIK, 2007:5). Close to 5 million hectares are irrigated (DSI, 2008). These figures suggest that Turkey utilizes all its arable lands, but there still appears to be a large margin for agroproduction growth by irrigation development. The General Directorate of State Hydraulic Works (DSI) of Turkey ambitiously pursues this end and has declared an official irrigation target of 8 million hectares by 2020. Contrary to the state entrepreneurship models of the past decades, the irrigation works of the next decade are expected to be constructed by public–private partnerships and operated by private entrepreneurs (see Chapter 9 by Kadirbeyoglu and Ozertan).+ The renewable water potential of Turkey is estimated as 234 billion cubic meters per year, with 41 billion of this being recharged in groundwater. These figures are reduced to 112 billion and 14 billion, respectively, when the economically and technically feasible use of the total renewable water potential is considered (DSI, 2008). These assessments do not consider expected declines in renewable water potentials due to the impacts of anthropogenic climate change and the destruction of groundwater aquifers and streams by extractive industries such as gold, boron or coal mining, or by excavating activities such as large-scale dam constructions. Thus, agricultural production in Turkey is constrained by its land and water resource base, with diminishing renewable water potential—and considering the increase in national population to around 80 million, its endowment is approaching a level of less than 1600 cubic meters per capita per year, which means that it is heading towards the water poverty threshold—and this creates a bottleneck for irrigation development as the demands for alternative uses of water resources increase.§

According to the recent GAP (Southeast Anatolian Development Project) Action Plan, available at http://www.gap.gov.tr/Turkish/Genel/eylem812.pdf. + The World Water Forum 2009 is hosted by the Turkish General Directorate of State Hydraulic Works (DSI) in Istanbul. This huge event was structured as a forum for exchanges between states and corporations with involvement of non-governmental organizations, so as to convey the transfer of water resources control from governments to corporations. § The State Hydraulic Works (DSI, 2008) estimates the available per capita fresh water in Turkey by 2030 as 1,120 m3/year. This figure is based on TUIK‘s estimate of 100 million as the population size for the same year. The Food and Agriculture Organization of the United Nations classifies Turkey as a country approaching the level of physical water scarcity.

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Figures for agro-production and inputs use also shed light on the socio-economic characteristics of agriculture in Turkey. According to the 2006 data, average fertilizer consumption (of nitrogen, phosphate, and potassium fertilizers) is around 400 kg/hectare and aggregate average pesticide consumption in all categories (herbicides, insecticides, fungicides and others) is around 1.4 kg/hectare (TUIK 2007:48). These figures have been increasing slightly over the last 20 years. For the same period, there has been a much greater, approximately a twofold, increase in tractor ownership (see Chapter 13 by Karapinar and Temmerman). By 2006 the incidence of tractors had reached around 3.8 per square kilometer, and the incidence of combine-harvesters was around 0.05 per square kilometer (TUIK 2007:48). Since 1997, while the number of waged employees in agriculture had increased and that of unpaid family workers had decreased, while own-account workers stayed constant (see Chapter 7 by Ilkkaracan and Tunali). In the same period agriculture‘s share in national employment had declined from 40 percent to less than 30 percent (TUIK 2007:43). A positive foreign trade balance is observed for staple foods, and in 2006 net exports of cereals were 400 thousand tonnes (TUIK 2007:46). The average farm size per farmer household is around 5.7 hectares according to the 2001 agricultural census (DIE, 2004:27). This figure ranges between about 2–3 hectares per household in the northern (Black Sea) and western (Aegean) regions and around 10 hectares per household in the central and southeastern regions, where agricultural water budgets and average crop yields are particularly low. Overall, in Turkey, 67 percent of the households own or cultivate less than 5 hectares of land and another 18 percent hold lands of between 5 and 10 hectares. These two categories (totaling 85 percent of farmers) constitute the small farmers or peasant farmers group, and together cultivate around 42 percent of the country‘s arable lands. Over the last thirty years, mixed farming systems, in which peasant farmers adopt a crop mixture along with animal husbandry, have been in decline, and their percentage has decreased from 83 percent in 1970 to 67 percent in 2001 (Aysu, 2006). The figures overall imply several facts that are of interest for the larger problem of adaptation to climate change. First, while the arable land in use stays relatively constant, wage labor increases and the number of unpaid family workers decreases, indicating a trend towards concentration of land and power in large families or commercial organizations. Second, although it is in decline, peasants‘ farming still constitutes a significant share of agriculture. Its mixed production systems enable cultivation methods that require fewer inputs and are more energy efficient. As climate change unfolds in the coming decades one may expect to see the agricultural sector dominated by large agribusiness firms and corporations, choosing either to adapt by use of capital-intensive agricultural technologies or to abandon production, depending on their expected financial returns. On the other hand, reversing this trend towards industrialization so as to sustain peasants‘ farming and ecologically sustainable forms of agricultural production is an environmentally and socially desirable vision. If this The average fertilizer and pesticide consumption rates in Turkey and Europe are hard to compare. Turkish figures are based on sales data and represent the product rather than active ingredients. For EU-25 countries, average fertilizer consumption for 2006 was around 100 kg/ha in active ingredients (Eurostat, 2008). Product mass of fertilizers can be converted to active ingredients by multiplying by a factor of ¼. The average fertilizer consumptions in Turkey and Europe appear to be similar. This is not true for pesticides. According to the same data source, active pesticide ingredients consumption is around 1.25 kg/ha in the EU-25, and that implies considerably higher rates. This figure is around 55 ha for Denmark, 45 ha for France, 65 ha for England, 25 ha for Belgium, 24 ha for Holland and 5 ha for Greece (Eurostat, 2008).

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vision prevails, one may expect to see small farmers facing the challenge of adaptation by crafting novel means of cooperation and control to share their scarce water resources and precious genetic materials. Adaptation to climate change in these two distinct worlds is different, while those two worlds may exist together and still be in constant struggle.

CLIMATE CHANGE IMPACTS IN TURKEY The IPCC‘s fourth assessment report (AR4), the Contribution of Working Group II on Impacts, Adaptation and Vulnerability, covers the impacts relevant to Turkey (Parry, Canziani, Palutikof, van der Linden and Hanson, 2007). In particular, Chapter 10 on Asia (Cruz, Harasawa, Lal, Wu, Anokhin, Punsalmaa, Honda, Jafari, Li and Huu Ninh 2007) and Chapter 12 on Europe (Alcamo, Moreno, Nováki, Bindi, Corobov, Devoy, Giannakopoulos, Martin, Olesen and Shvidenko 2007a) treat impacts on western Asia (12–42°N and 27–63°E) and on southern and southeastern Europe (the Mediterranean basin) respectively, which between them include Turkey (36°–42° N and 26°–45° E).

Observed Trends in Temperatures and Precipitation The warming trend in Europe is well established as +0.9°C between 1901 and 2005 (Jones and Moberg, 2003). The instrumental records in Turkey reveal warming trends of between 0.07 and 0.34°C per decade; however, these findings are less conclusive due to entangled urban heat island effects (Turkes, Sumer and Demir, 2002; Karaca et al., 2007). A recent study by Tayanc, İm, Dogruel and Karaca (2009) observes significant warming trends over the last decade, particularly significant in the south and southeast of the country. In the larger Mediterranean basin, precipitation trends are negative in the east while they are insignificant in the west (Norrant and Douguédroit, 2006). Even in some areas that have become drier, the intensity of precipitation events has increased (Frich, Alexander, DellaMarta, Gleason, Haylock, Tankand and Peterson, 2002). In Turkey, decline in precipitation is salient for the western (Aegean) region in winter and the results are mixed for other regions and seasons (Karaca et al., 2007). These findings are confirmed by Tayanc et al. (2009), as they conclude that, particularly winter precipitations are in decline throughout the country. A summary of impacts on agriculture, particularly in Mediterranean Europe, shows longer and warmer growing seasons for summer crops (Jones and Davis, 2000). Parry, Rosenzweig, Iglesis, Fischer and Livermore (1999) conclude that the adverse effects of climate change on agricultural production are likely to be felt more in the lower latitude countries even though the magnitude of temperature change is projected to be less than in higher latitudes. A study by the European Environmental Agency (EEA) confirms this finding. According to EEA (2004), southern Europe will be more severely affected by climate change, becoming warmer and dryer, and this will threaten its waterways, agricultural production, and timber harvest.

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Temperature and Precipitation Projections Several General Circulation Model (GCM) simulations forced by IPCC‘s Special Report on Emission Scenarios (SRES) A2 and B2 emission scenarios show 2.5–5.5°C and 1–4°C warming trends respectively over Europe by the period 2070–2099 compared with 1961– 1990 (Giorgi, Bi and Pal, 2004). The differences in the estimates are due to the different models used in these analyses. In general, for all scenarios, mean annual precipitation increases in northern Europe, while it decreases for the south (Räisänen, Hansson, Ullerstig, Döscher, Graham, Jones, Meier, Samuelsson and Willén, 2004). For the Mediterranean Basin, the expected loss in precipitation is about 30 to 40 percent and it reaches 70 percent in summer (Giorgi et al., 2004). The frequency and intensity of extreme climate events are important in anticipating the characteristics of future agricultural systems. Yearly minimum and maximum temperatures are expected to increase. Even in climatic regions with negative precipitation trends like southern Europe, the intensity of daily precipitation events is expected to increase (Giorgi et al., 2004). The combined effect of increasing temperatures with decreasing summer precipitation creates a high risk of heatwaves and droughts. Beniston, Stephenson, Christensen, Ferro, Frei, Goyette, Halsnaes, Holt, Jylhä, Koffi, Palutikof, Schöll, Semmler and Woth (2007) predict that, in the Mediterranean Basin, the summer droughts will start earlier and last longer. Polemio and Casarano (2004) find that, in the late 21st century, the Mediterranean and eastern Europe may experience an increase in dry periods. Hence, both the frequency and the severity of heatwaves and droughts are expected to increase. The impact of climate change on water resources is inevitable. Several general circulation modeling (GCM) results forced by different emissions scenarios show that the runoff in the Mediterranean basin and eastern Europe will decline. Analyses with respect to SRES B2 and A2 scenarios show that runoff in southern Europe will decline by 0 percent and 23 percent respectively by 2020, and by 6 percent and 36 percent by 2070 (Alcamo, Floerke and Maerker, 2007b). This will create an obvious negative impact on groundwater recharge (Eitzinger, Stastna, Zalud and Dubrovsky, 2003). As the water resources decrease and drought risk increases, the irrigation water demand will be increasing with higher temperatures as well (Döll, 2002). Onol (2007) and Karaca et al. (2007) point to similar threats for Turkey. Their simulations of regional models with downscaled GCM runs, aiming to increase precision in climatic predictions, show that, for the IPCC‘s SRES A2 scenario, Turkey will be experiencing 2–6°C of average warming by 2070–2100 compared with 1960–1990. This warming is more pronounced for summer seasons in the western, southern, and southeastern regions. As for precipitation, losses of up to 150 mm are observed, particularly for summer seasons in western to central Anatolia, and there is a large increase in the number of consecutive dry days in autumns and summers all over the country, except on the northern coastline. Their analyses also reveal that these impacts emerge gradually over decades, and this finding can be viewed as an opportunity for pursuing informed proactive adaptation strategies in the agricultural sector. As for precipitation minus evapo-transpiration (P–E), In Onol‘s (2007) analyses, ICTP-Regional Climate Model V3 (RegCM3) is used to downscale present and future simulation results generated by NASA-Finite Volume General Circulation Model (fvGCM). Karaca et al. (2007) use the same regional model to downscale ECHAM5 general circulation model results.

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which is a fundamental indicator of agricultural water availability, the simulations show losses of around 30 percent. Winter runoff significantly decreases in the western half and spring runoff significantly decreases in the eastern half of the Anatolian peninsula, creating dramatic water deficits for summer crops in both parts of the country.

Expected Impacts on Genetic Resources and Yields Climate change affects genetic resources that serve as a fundamental resource for agricultural production. The pace of climate change is expected to exceed the adaptation capacity of many non-cultivated plant species (Hitz and Smith, 2004). Viner, Sayer, Uyarra and Hodgson (2006) predict that mountain regions might lose their endemic character due to invasive species. For the Mediterranean and Lusitanian mountains by 2080, under the A1 scenario, Thuillier, Lavorel, Araújo, Sykes and Prentice (2005) predict 62-percent species loss. As the forests expand in the northern tundra, they are expected to shrink in the south (Metzger, Leemans, Schröter, Cramer and the ATEAM consortium, 2004). Warming and particularly drought in southern Europe are likely to lead to reduced plant growth and primary productivity (Ogaya, Peñuelas, Martínez-Vilalta and Mangirón, 2003; Llorens, Peñuelas, Estiarte and Bruna, 2004), reduced nutrient cycling and nutrient availability (Sardans and Peñuelas, 2005) and altered plant recruitment, phenology and species interaction patterns (Maestre and Cortina, 2004). Changing precipitation patterns in the Mediterranean are expected to affect the productivity and species diversity of the grasslands negatively (Valladares, Peñuelas and de Luis Calabuig, 2005). Cultivated environments will be affected as well. Climate change and increased atmospheric CO2 concentrations are expected to create small increases in European crop productivity. However, the geographical distribution of this change is uneven and the expected increases in productivity are concentrated in the north, while expected decreases are concentrated in the south. In southern Europe and the Mediterranean region, the productivity of spring-sown crops is expected to decrease and their water demand is expected to increase. Anticipated productivity changes by 2050 are: –5 to –30 percent for leguminous crops, –12 to 3 percent for sunflower, and –14 to 7 percent for tuber crops. Anticipated changes in water demand for the same time period are 2 to 4 percent for maize, and 6 to 10 percent for potatoes (Giannakopoulos, Bindi, Moriondo, LeSager and Tin, 2005; Audsley, Pearn, Simota, Cojocaru, Koutsidou, Rounsevell, Trnka and Alexandrov, 2006). The expected changes in yields of autumn-sown crops are different for the north and south as well, and the direction of change is positive in the north and negative in the south. Expected average yield change for wheat ranges between 3 and 4 percent by 2020, –8 and 22 percent by 2050, and –15 and 34 percent by 2080 (Santos, Forbes and Moita, 2005; Audsley et al., 2006). According to a series of SRES scenarios, by the year 2050 the potential cropping areas for oilseeds, sunflowers, tuber crops, cereals, and biofuel crops are expected to shift towards north (Tuck, Glendining, Smith, House and Wattenbach, 2006). Extreme climate events, like heatwaves and droughts, are likely to increase the variability of yields (Jones, Lister, Jaggard and Pidgeon, 2003) and reduce average yields (Trnka, Dubrovski and Zalud, 2004). Particularly in the Mediterranean basin, extreme climate events occurring at specific stages of crop development (such as heatwaves during the flowering period or precipitation at sowing

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times), combined with longer-lasting droughts and intense precipitation events, are expected to reduce yields in summer crops. Kanber, Kapur and Tekin (2007) analyze the climatic impacts on agricultural production in southern Turkey, in the Seyhan basin. Simulations using the regional model TERC-RAMS (based on SRES-A2) show the average temperatures increasing by 3°C and annual precipitation decreasing by 25 percent by 2070. The loss in evapo-transpiration is 17 percent. Local vegetation is expected to move towards higher elevations due to temperature and moisture stresses at lower elevations. Yield losses in wheat and corn due to temperature stresses outpace the potential gain from CO2 fertilization.

Other Impacts Parry et al. (2007) also document other likely indirect impacts of climate change on agricultural production. Increased temperatures increase the risk of livestock diseases. The likely increase in the dispersal of insects, enhanced survival of viruses from one year to the next, and improved survival conditions for insects and viruses with warmer temperatures are the factors increasing the risk of livestock diseases (Wittmann and Baylis 2000; Colebrook and Wall, 2004). Another prediction that would be of interest for irrigation development projects is the likely decrease in hydropower production in Europe. By 2070 hydropower production in Europe is expected to decline by 6 percent, but in the Mediterranean basin this figure reaches 20 to 50 percent (Lehner, Czisch and Vassolo, 2005).

ADAPTATION OF AGRICULTURE TO CLIMATE CHANGE IN TURKEY The climate projections for Southern Europe and Turkey summarized in the previous section show that agriculture in Turkey in particular will need to adapt to conditions of higher temperatures (and heatwaves particularly in the spring and summer), water stresses and agricultural drought; and thus to a net reduction in the agricultural water budget and to related impacts on land degradation, in the form of soil salinity and erosion. Moreover, shifting climate zones will cause stress on endemic and cultivated plant species, and biodiversity conservation will become a major challenge for sustaining agricultural production. On the other hand, while climate mitigation is an immediate task for alleviating impending hazards of global climate change, adaptation is a prolonged process that can be dealt with in gradual steps. This is because, while the frequency of extreme climate events and related hazards has already increased, the systemic trends in increasing temperatures and declining precipitation will only arise over a few decades. With these perspectives, short-term (roughly assessed in this chapter as less than one decade) and long-term adaptation tasks and strategies must be differentiated (see Chapter 10 by Karapinar).

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Short-Term Tasks In the short term, risks from extreme climate events are inevitable and should be alleviated by insurance mechanisms accessible by all farmers. This requires an agricultural insurance pool covering common climate-related hazards (such as droughts and frosts) that is applicable to a wide range of agricultural products. Since the impacts of climate-related hazards are widespread and create very high aggregate costs, the risk premiums in this pool need to be paid both by the producers and the consumers. In other words, the risks created for agricultural production by extreme climate events should be shared by the urban consumers (the taxpayers), whose contribution to climate change has historically been much higher than the contribution of rural sectors (ZMO, 2008). However, the agricultural insurance pool, TARSIM, in Turkey was newly initiated in 2005 and there are barriers to its effective implementation. The system has a conventional risk premium structure with limited governmental support and it does not cover common climate-related hazards. About 35 percent of agricultural fields are not registered, risk statistics are not available, and the limited financial capacities of small farmers are an impediment to their accession to the system (Dimitriyadis, 2007). Thus, in the short term, either this existing insurance pool must be restructured or a new system must be created to secure the needs of agricultural production in a climatically destabilized era. In the short term, for conservation of water resources and to increase the resilience of irrigated agriculture against seasonal lows in water yields, retrofitting the existing irrigation infrastructure by canal maintenance, and by drip and sprinkler irrigation systems, is important. To avoid overexploitation of groundwater reserves and to reduce competition over scarce surface water, water-conserving crops, tillage methods and irrigation scheduling must be promoted. There are institutional as well as technological barriers to efficient water use in agriculture. In the short term, while monitoring, sanctions on over-consumption, and fair water pricing should be encouraged, alternative and diverse methods of water control appropriate for different agricultural technologies and communities should also be explored to reduce potential corruption. In fields prone to seasonal floods, control measures must be taken. As an alternative to the conventional flood-control measures in the form of reservoirs and dykes, expanded flood plain areas, emergency flood reservoirs, preserved areas for flood water and flood warning systems are earning popularity and should be preferred where necessary and appropriate (see, for example, Helms, Büchele, Merkel and Ihringer, 2002). In the short term, what not to do is also relevant in the context of adaptation to climate change. Overreacting to the past two years‘ agricultural droughts, experts are proposing immediate high-investment solutions to alleviate water stresses, which may prove to be worse in the longer term because of the water-consumptive infrastructure. Alarming meteorological conditions create new opportunities for investors in water resources development, for biotechnology companies targeting large agricultural communities as their potential market, and for the elements of agricultural and water bureaucracy eager to cooperate with such private partners. For example, the Konya plains area in mid-Anatolia has been one of the most waterstressed agricultural regions of the country over the past years, with its systemically declining groundwater reserves now close to absolute depletion, mainly due to increased cultivation of irrigated sugar beet (Celik and Karakayaci, 2007). Agro-industry provides strong incentives

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for sugar beet production compared with its traditional, ecologically friendly alternative, rainfed winter cereals. Observing the escalating water scarcity in the basin, Celik and Karakayaci (2007) propose inter-basin water transfer from a neighboring watershed rather than demandside conservation by ecologically appropriate crop selection. Similarly, Kanber et al. (2007) observe the present and future water stresses in the Seyhan basin in southern Turkey and propose irrigation development for the regions where fruit and vegetable production are expected to migrate in the future. Surely enhanced water-storage capacity within a basin reduces the vulnerability of agriculture to the conditions of drought. On the other hand, proposals for inter-basin water transfer and for large-scale surface irrigation are a call for inefficient water consumptive infrastructure with a very long capital lifetime and high retrofitting costs, which will exacerbate water stresses both on the ecosystems and on society when the climate-change-induced systemic decline in water yields arise after a few decades. Another ―not to do‖ is related to seed policies. Particularly in dry farmlands, heat-, drought-, and salt-resistant crop varieties will be needed, and Turkey is a center of origin for many cereal and leguminous crops. Historically, on-farm conservation of these traditional varieties has been the crucial mechanism for the preservation of crop genetic resources. In the modern era, public enterprises controlled by the General Directorate of State Breeding Farms (now called the General Directorate of Agricultural Enterprises, TIGEMs) have supported large farming communities by providing them with seeds, studs, and saplings for production. On the other hand, privately funded biotechnology research and now genetic engineering offer solutions both for climate mitigation (with the help of innovations to increase the carbon storage capacity of cultivated ecosystems and by reducing energy use in agriculture with notill weed-control technologies) and for agricultural adaptation (with the help of genetically engineered heat-, drought-, and salt-resistant varieties). Recent legislation related to the production and exchange of crop genetic resources, such as Law on the Protection of Breeders‘ Rights for New Plant Varieties (No. 5042), which came into force in 2004, and the 2006 Seed Law (No. 5553) support private breeders‘ intellectual property rights rather than farmers‘ rights to use, improve and share traditional varieties (see Chapter 11 by Aksoy). In Turkey between 2002 and 2005, 60 percent of policy funding in biotechnology research was channeled towards the commercialization of biotechnology, 38 percent was used for biotechnology research in public organizations, and the rest was used for biosafety activities (van der Molen and Enzing, 2007). Although commercialization of genetically modified organisms (GMOs) has not yet started in Turkey (because the biosafety law is still to be ratified by parliament), the multinational companies waiting for the law to be enacted are already investing in future field trials with GMOs and arranging information meetings with the local stakeholders. Dobos and Karaali (2003) argue that there is an almost exclusive network consisting of the Ministry of Inter-basin water transfer is used to satisfy the non-satiating requirements of ever-expanding conurbations such as Ankara and Istanbul as well. Recent droughts have increased popular support for these projects. A highranking official of the General Directorate of State Hydraulic Works (DSI) has fiercely announced at a national meeting that ―we shall use every inch of our waters wasted into the oceans, and we shall transfer them to where and when they are needed.‖ (Personal note from the Fifth World Water Forum, Irrigation, Salinization Meeting, 12-13 June 2008, Sanliurfa, Turkey). According to Turkey‘s Minister of Forestry and Environment, who is a past director of DSI, ―Turkey does not have water problems but water investment problems,‖ meaning that Turkey should be investing in water supply infrastructure rather than water conservation policies, on both the demand and the supply side (Radikal, September 10, 2008, available at http://www.radikal.com.tr/Default.aspx?aType=BugunkuRadikal&Date=10.09.2008).

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Agriculture, the multinational biotechnology industry, and the potential purchasers of GM seed, which represents a power center in the agricultural decision making processes. These policy choices, addressed as a ―not to do‖ here, strongly favor private firms and commercialization rather than enhancing the capacity of public institutions and empowering farmers to improve and share their genetic resources. Contrary to these policies, which disenfranchise farmers and risk the adaptive capacity of the crop genetic heritage to the expected climatic change, seed resources can be conserved and improved by a mixture of novel approaches in science, technology, and policy. For the purpose of creating a pool of endemic heat-, drought-, and salt-tolerant seed resources under the control of farmers, public research institutions, and agricultural extension organizations, some short-term tasks should be outlined. Participatory plant breeding (PPB) is a process based on the collaboration between farmers and crop breeders. PPB works with crop populations managed by peasant farmers and is based on an understanding of the farmers‘ selection criteria and an appreciation of how farmers acquire and manage seeds (Brush, 2004). Turkey‘s existing national agricultural program for seed conservation can create the institutional framework for PPB activities provided that the current trend towards commercialization of genetic resources (as institutionalized by the recent laws, 5042 and 5553) is reversed in such a way as to empower farming communities and public institutions rather than private breeders (again, refer to Chapter 11 by Aksoy for details). As one of the fundamental elements of Turkey‘s national program, TIGEMs provides 80 percent of certified wheat seed and 75 percent of certified fodder wheat. In the past these enterprises served for the extension of modern agricultural practices, particularly in small and medium landholdings, but suffered from underinvestment, mismanagement, and nepotism. Recently, the government has initiated their transfer to private companies. When this transfer is completed, farmers will become totally bound to private firms in seed selection and learning about agricultural practices. Instead, TIGEMs and similar public organizations (research enterprises controlled by the General Directorate of Agricultural Research, TAGEMs) should be restructured to serve as a basis for participatory research with the farmers in order to preserve and improve endemic gene resources tolerant to the expected conditions of climate change. Thus, one (decadal) short-term task in the adaptation of agriculture should be to enhance farmers‘ access to their social and economic rights in the form of insurance against climaterelated hazards, and access to safe genetic resources, with the help of effective public organizations. Meanwhile, retrofitting of available waterworks and improved water management on both the supply and the demand sides will be required. However, impending climate change is more severe and its long-term consequences are uncertain. There is a big knowledge gap as to what agriculture in a warmer world will look like. This knowledge gap is due to uncertainty, both about impacts on agriculture‘s resource base and about the socioeconomic response to changing and geographically shifting agricultural systems.

Long-Term Strategies In this world of uncertainties, with increasing claims on its reducing resource base, democratic control of water and genetic resources will facilitate the adaptation of agriculture

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to climate change. The short-term tasks described above, and their like, will be useful in the long term only if they serve this grand strategy. On the other hand, if short-term tasks cannot be achieved, adaptation in the long term will involve more severe conflicts since the resource base will be dramatically reduced and the potential agents of adaptation will already be inconveniently excluded. Adaptation of agricultural production in the long term to climate extremes and systemic trends requires the existence of secure, affiliated farming communities able to control and share their diminishing water resources, and to conserve and enhance their gene pools using field trials by constant experimentation with nature. Life-nourishing knowledge is expected to emerge and diffuse in the field with the aid of publicly controlled research organizations. As climate change unfolds towards the middle of this century, the challenge of adaptation will become a struggle over the control of agriculture‘s resources, between democratic control on the one hand and corporate and bureaucratic control on the other. Meanwhile, the research community will have time to increase its understanding of various aspects of future natural and social response by adopting novel holistic methods, instead of relying on reductionist, compartmental analyses that generate limited knowledge of what agriculture on a warmer planet may look like.

CONCLUSION Projected impacts of climate change in Turkey show that, by the second half of the century, systemic trends in increasing temperatures (by 2–6°C), decreasing precipitation patterns (by around –35 percent), more frequent droughts and heatwaves, longer growing seasons and decreasing runoff, groundwater recharge and net evapo-transpiration (around –30 percent) are expected. There is limited research on the indirect influences of these climate impacts on agriculture‘s resource base; however, more saline and less nutritious soils, and loss in wild and cultivated plant diversity, are likely expectations. In the meantime, the hazards to agricultural production from extreme climate events are expected to increase in the short term. Agriculture in Turkey is largely based on small-scale production by peasant farmers (85 percent of farmers own less than 10 hectares of land, and between them they cultivate 42 percent of total arable lands), and, although it is in decline, more than 60 percent of this community still adopts mixed plant and animal husbandry and uses less inputs than do larger farms. Trends show that, while self employment is decreasing, wage employment is increasing. Peasants‘ small-scale agriculture is being replaced by the large landholdings of corporations and powerful families. Adaptation of agriculture to climate change in Turkey will become a challenge both for agro-corporations and for peasant farmers. Corporations will have easier access to land and water resources and to genetically modified seed varieties (however, Turkey still lacks a biosafety law; see Chapter 11 by Aksoy; Chapter 14 by Kivilcim). They will not face the dilemma of pursuing production under negative returns when the costs of climate-related risks and hazards increase. On the other hand, peasants will need to adapt to sustain their livelihoods, but will not have easy access to appropriate land, water and seed resources.

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Adaptation studies in Turkey need to focus on the challenges posed to this large agricultural community of peasant farmers, so as to sustain the country‘s agricultural production base. While hazards from extreme climate events are already increasing, systemic change in temperatures and water yields, and their indirect impacts, will arise after a few decades. Thus, to increase the adaptive potential of agricultural production, short-term (single-decade) and long-term tasks should be differentiated. Short-term tasks must include measures to enhance farmers‘ access to their social and economic rights in the form of insurance against climate-related hazards (for example, by restructuring the Agricultural Insurance Pool, TARSİM) and safe resource and technology availability (for example, by rehabilitating public institutions like TAGEMs and TIGEMs). Environmentally safe flood control and retrofitting of existing irrigation systems will help increase the resilience of farmers to extreme climate events. Short-term measures will be useful only when they are forged as a part of a long-term grand strategy to improve democratic control over agriculture‘s resource base, particularly on water and seed. Sustaining crucial food, oil, fiber and fodder production in a warmer and drier environment will require secure, lively, affiliated agricultural communities in the field, learning through constant experimentation with nature.

ACKNOWLEDGMENT The author greatly acknowledges the financial support provided by Bogazici University Research Fund, Project No: 07S103 for this research.

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In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 9

WATER IN TURKEY: NEOLIBERAL POLICIES, CHALLENGES AND THE ROAD AHEAD 1

Zeynep Kadirbeyoglu1 and Gokhan Ozertan2 Department of Political Science and International Relations, Bogazici University, Turkey 2 Department of Economics, Bogazici University, Turkey

ABSTRACT In the neoliberal era, water is considered an economic good and its efficient allocation and long-term sustainability are claimed to be achievable via decentralization or privatization. Since privatization seems to be more difficult to implement due to public criticism and protest, decentralization, in the shape of devolving the operation and management of water to the users through the establishment of Water User Associations (WUAs), is the global trend within the irrigation management field. This chapter examines the WUAs in Turkey in order to evaluate the impact of their institutional setup, their potentials and problems, and, finally, the impacts of decentralization on use of water and farmers‘ livelihoods. The outcomes of decentralization show that seeing water as an economic good and providing it within a decentralized setting in the absence of monitoring and accountability-enhancing measures prevent the benefits of irrigation from materializing—especially in areas with significant inequalities in access to resources and power dynamics. Without the accompanying legal and institutional framework, and in particular without effective monitoring, enforcement, and regulations, the neoliberal policies are unsuccessful in accomplishing political and economic reforms.

INTRODUCTION Water is a resource of crucial importance, especially in today‘s world. Global trends— such as climate change (see Chapter 8 by Saysel)—and recent droughts have brought to the fore a preoccupation with environmentally conscious and sustainable use of water. This chapter examines water, which was transformed into an economic good by the neoliberal and economistic sustainability vision of resource conservation. The focus of the chapter will be on

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the decentralization of irrigation management in Turkey, which began in 1993 as part of an attempt to reduce the burden of irrigation schemes on the state budget. Hence, the dual target of resource conservation and the self financing of irrigation schemes engendered the necessity to set an ―appropriate‖ price for water: it could no longer be seen as the right of the farmer to use water for irrigation without paying the fees that would ensure the sustainability of the resource and the managing body, i.e. the Water User Associations (WUAs). As discussed in detail by in Chapter 4 by Akder and in Chapter 5 by Cakmak and Dudu, at the end of the 1990s the excess burden of the agricultural sector on government expenditures showed the need for a structural reform in this sector. Actually, the structural adjustment in agriculture in Turkey began prior to the Agricultural Reform Implementation Project (ARIP), which was initiated by the World Bank in 2001, and the reforms of decentralized irrigation that began in 1993 provide valuable insights into the challenges and potentials of future reforms. The theme of this chapter, water for irrigation, is a vital resource; it can make or break civilizations, as the example of the fertile crescent in Mesopotamia demonstrates. Christensen‘s (1998) historical account of irrigation in the fertile crescent shows how inappropriate maintenance and salinization were partially the reasons for the decline of the civilizations of the region. Christensen argues that not even the modern irrigation technologies used in the Middle East since the 19th century have been exempt from environmental problems. Whether the implementation of appropriate technology—such as the sprinkler, drip, or trickle irrigation that are advocated by the experts as the primary technical solution to the environmental problems caused by irrigation—is financially realistic and viable in the region and whether it will solve the myriad environmental problems created due to intensification of agriculture are yet to be seen. In the end, sustainability of irrigation is essential for the future of agricultural practices and production. Since the International Conference on Water and the Environment (ICWE) in Dublin in 1992, policymakers and multilateral funding agencies have viewed water as an economic and scarce good that has competing uses (Budds and McGranahan, 2003:91). This is a shift from conceptualizing it as a social good, access to which is a human right. The World Bank works with this new definition and claims that there will be efficient use of water if there is a water market, with appropriate pricing, and if this market is founded on a water law. These policies have led to legislative reforms in the form of decentralization and privatization of water, in Mexico and Bolivia among other developing countries. In the urban context, this has meant promoting the involvement of different types of private enterprises in water provision and sanitation, because the preceding arrangement, which relied on public provision of these services at subsidized prices, had failed (Perry, Rock and Seckler, 1997) and was not financially viable in the neoliberal era. Private water utility companies were to charge an appropriate market price for water such that the operation and maintenance would be rendered self sufficient and self improving. Nevertheless, this approach ignores the problem of equity in the distribution of such a crucial public good. The problem of market failure due to externalities, transaction costs and inappropriate property rights was not taken seriously, either (Perry et al., 1997).

Agrawal and Ostrom (2001:488) define decentralization as ―any act by which a central government cedes rights of decision-making over resources to actors and institutions at lower levels in a politico-administrative and territorial hierarchy.‖

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Regarding implementation, the practice proved to diverge from the postulations of the theory: the evaluation of privatization of water provision in the developing countries in Africa, Asia, and Latin America illustrates that privatization did not reduce deficiencies in water and sanitation provision; on the contrary, it led to premature termination of contracts in some of the Latin American cases—the most notorious of which was Cochabamba-Bolivia where there were violent protests against the water company following a 200 percent increase in water fees (Budds and McGranahan, 2003). This was due to ineffective regulatory capacity of the states in these debt-ridden developing countries—which had little opportunity to dispute the privatization deals since they needed to comply with conditions imposed by international financial institutions—to push companies to ensure an equitable distribution of water to meet basic needs. As Perry et al. (1997:13) argue, it is sometimes necessary to provide subsidies in water provision in developing countries in order to ensure that the ―masses of poor people are not priced out of the market.‖ The evidence of privatization and market failure tends to indicate that privatization is not always a reform that increases efficiency and sustainability of water resources. In the rural context, the operation and maintenance (O&M) of irrigation, a major item in water delivery cost, is transferred to the users as part of the trend to diminish the role of public bodies in water management and distribution. International funding agencies began making the approval of irrigation aid financing conditional on the formation of WUAs. Generally speaking, the viability of decentralized irrigation institutions depends on the ability of farmers to pay their fees. Decentralization of irrigation management throughout the world takes place at a time when prices of agricultural products are very unstable, where most subsidies have been stopped, and the marginal returns to farmers from inputs have declined while the prices of inputs have increased tremendously (Meinzen-Dick, 1997:112). Farmers need to have a minimum amount of revenue in order to pay the irrigation fees. They need effective training, cheap credit for more efficient irrigation technologies, and marketing channels for high value-added produce. These, however, are not possible without the presence of a capable bureaucracy and a competent state administration. Markets need state regulation in order to function, as Polanyi (1944) aptly argued, and decentralization is effective only if there is a competent state administration (Boratav, Turel and Yeldan, 1996; Ozcan, 2006:117).+ Hence, relying on the market and transferring public service provision to the market mechanisms without setting up the necessary regulatory infrastructure may be a recipe for failure. Transfer of irrigation management was promoted in order to relieve the state budget of the burden of irrigation projects. This happened at a time when all forms of government subsidies to agriculture were being eliminated (Kolavalli and Brewer, 1999:249; MeinzenDick, 1997:105). WUAs are thought to be more efficient in the collection of irrigation fees and they are required to recover the cost of irrigation investments. Water program financing in Mexico, for instance, was conditional upon full cost recovery following decentralization The trend, globally, is to transfer the operation and maintenance of irrigation schemes to users. See, among others, Lee (1990), for the case of Chile; Sehring (2007) for the cases of Kyrgyzstan and Tajikistan; and Veldwisch (2007) for the case of Uzbekistan. WUAs have been the most frequently crafted institutions for irrigation management transfer—see, for instance, Nikku (2002) for the case of Andhra Pradesh; Khanal (2003) for that of Nepal; and Gorriz, Subramanian and Simas (1995) for Mexico‘s experience. + The importance of a strong state is acknowledged by scholars of decentralization of natural resources such as Ostrom (1992) and Ribot (2002).

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(Wilder and Romero Lankao, 2006:1979). The proponents of decentralization reforms prioritized financial benefits and tended to neglect the importance of socio-political issues such as equity, institutional governance, and power relations (Wilder and Romero Lankao, 2006:1992). This chapter first examines water management from a theoretical perspective, followed by a discussion of water resources in Turkey. The section on decentralization of irrigation management in Turkey focuses on the institutional setup, the potentials and problems of the transfer of operation and management to the users, and the overall impact of decentralization on the use of water and farmers‘ livelihoods. The emphasis will be on regions where there are substantial problems or conflicts between management and users.

Management of Water As with the non-optimal depletion of any renewable natural resource, management is crucial with water. Research shows that within the next 20 years the number of people living in water-stressed countries will rise to three billion and by 2050 almost one billion people in the Middle East and North Africa will face critical water shortage (Johansson, Tsur, Roe, Doukkali and Dinar, 2002:174). A major portion of available water is used for agricultural irrigation, and currently one-third of agricultural production is obtained by irrigating 18 percent of total arable land in the world (Johansson et al., 2002:174). On average, farmers only benefit from 30 percent of water delivered to them, while the rest is lost due to evaporation, deep percolation, or recycling to the river or irrigation system (Dinar and Mody, 2004:114). Such over-use of irrigation water brings about several interrelated problems, which are not only restricted to management but extend to the fields of sociology, anthropology, political science, engineering, and economics (Dayton-Johnson, 2003). In agriculture, non-optimal and inefficient allocation and use of water resources result in problems and externalities such as erosion, rising water-table, and salinization. Estimations reveal that, worldwide, almost one-fourth of all irrigated area is heavily affected by salinization and waterlogging, and, because of these problems, each year almost ten million hectares are removed from agricultural production (Legras and Lifran, 2006:157). The intensification of competition among different sectors that employ water and the extension of irrigation to new areas are likely to engender new challenges as there is an ever increasing demand for water not only for agricultural, but also for non-agricultural uses such as power generation, industrial production, and daily domestic use (Unver and Gupta, 2003:325; Kibaroglu, 2003; Wichelns and Oster, 2006). Given the above-mentioned problems, scholars and practitioners propose different mechanisms for regulating water resources, such as introducing and developing pricing mechanisms, attribution of water entitlement rights, devising tradable water rights, and the facilitation of water markets through the use of one or several of the aforementioned instruments (Wichelns, 1999; Facon, 2002) or the use of non-market/quantitative restrictions in the allocation of water. A first-best allocation is almost impossible to implement in Similar neoliberal traits are visible in other service areas, as the case of South Africa demonstrates. The democratizing reforms and the expansion of services to previously excluded women happened simultaneously with the neoliberal attempts to recover the full costs of services provided to the community (Beall, 2005:271).

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irrigation—and may be undesirable, not only for reasons like food security and environmental problems from a macro perspective, but also due to external and strategic factors such as social costs, national security, internal politics, or geopolitics (Facon, 2002; Dinar and Mody, 2004). Hence, instead of a first-best allocation, policymakers and users should aim for the long-term physical, fiscal, and financial sustainability of water allocation for irrigation. For healthy functioning of the irrigation schemes and the satisfaction of farmers, the state agency should devise incentives to increase the acceptance of pricing. One way of achieving this is to make water users part of the decision-making process in irrigation O&M. Decentralization reforms offer this possibility.

Pricing of Water and Water Markets: Externality, Efficiency and Equity Perspectives The treatment of water as an economic good is based on its ―scarcity value.‖ Allocation should take into account the benefits to users, costs of provision, and opportunity costs for alternative uses (Wichelns, 1999:479; Hellegers, 2006:158). The prevalent claim in the literature is that pricing of water, mostly in the form of marginal cost rather than average cost, does not reflect its economic or opportunity cost (Facon, 2002). At the same time, besides the difficulties and costs involved in devising a pricing scheme, such a scheme may also be problematic for sustainable use due to incomplete information on monitoring and enforcement costs (Johansson et al., 2002). In addition, crop and input price policies, social equity, and ecological sustainability are factors that need to be considered in devising a pricing mechanism for irrigation water (Dinar and Mody, 2004:113). Regarding the efficiency concept in water use, given the prevalent technologies and water supply, an allocation is efficient when the net benefits to society are maximized; this occurs when, for a unit of water, marginal cost is equal to marginal benefit. The target of any policy here is eliminating the waste of water (Johansson et al., 2002:175; Unver and Gupta, 2003:313). The literature on water use refers to two types of efficiency: productive and allocative efficiency. Productive efficiency is achieved if the minimum amount of water is used for the production of an output vector. One way of achieving efficiency is through pricing mechanisms, which may induce users to employ less water more efficiently with methods such as drip irrigation (Allan, 1999:73). Allocative efficiency, which refers to using water where its returns are higher, will not be dealt with in this paper as we operate in a scheme where water for irrigation has already been assigned and there is not much scope for channeling water to other sectors where its returns could be higher (Allan, 1999:73). Productive efficiency of water use under different management institutions and differing pricing mechanisms will be discussed later in this section. Equity refers to whether or not an allocation is fair across different groups, but it may not be in harmony with efficiency criteria, since one of the targets of the equity principle is reducing income distribution gaps (Johansson et al., 2002:175; Unver and Gupta, 2003:313). While efficiency and equity are two of the main concerns when devising and implementing a pricing mechanism for water allocation, the physical, social, institutional, and political settings surrounding the environment are also of critical importance (Johansson et al., 2002:173). For instance, in regions where poverty is high and subsistence depends on agricultural production, it is inequitable to implement a pricing system that disregards the

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social setting of the locality. Likewise, in settings where corruption and rent-seeking are high, it is unlikely that the pricing mechanism would generate equitable collection of fees. Pricing schemes may be: area based (either crop based while considering irrigation times, or fixed charge while considering irrigation times); volumetric (based on the amount of water consumed, or hourly consumption); block-rate pricing (a modified version of volumetric pricing with some blocks charged at a higher rate); combinations of the above-listed alternatives (Unver and Gupta, 2003:320; Dinar and Mody, 2004). The advantage of area-based pricing is its ease of implementation. It does not require any measurement other than the size of the land and the type of crop. The difficulties with volumetric pricing are the costs involved in installing water meters at each hydrant in the case of pressurized or closed-system schemes, and the near impossibility of measuring the volume used if the irrigation scheme operates with open canals. The only way of measuring water used in these open canal systems is to estimate the volume of water a farmer uses based on the area the farmer cultivates—which is de facto area-based pricing. The price of irrigation water can be determined through the market, in a centralized manner, or in a participatory manner by the users. The water market is based on secure property rights to water use, and, connectedly, trade in water (Brennan and Scoccimarro, 1999). The literature on water markets emphasizes the formation of both informal and formal markets. Whereas water is temporarily traded in the former type, the permanent transfer of water rights takes place in the latter type (Bjornlund and McKay, 2002:771). Efficiency in water markets is achieved when market information is accessible by participants and property rights are secured, especially under formation of an institutional framework. Water users‘ organizations are considered to contribute to water market formation (Bjornlund and McKay, 2002). By establishing water entitlement, and, consequently, provision of the specified amount of water at the desired time, the argument is that an efficient allocation can be achieved. However, worldwide experiences show that some issues still remain problematic with water markets, such as timing (related to the question of when to use the water), losses due to evaporation, return flows, interregional trade, lack of supporting infrastructure, and impacts on downstream users, (Bell, 2002; Dinar and Mody, 2004). Similarly, during the formation of water markets, delivery infrastructure needs to be improved and clearly defined distribution rules need to be set up. If these are not present, then there is room for illegal water trading and interference with controls, which will result in inefficient water use (Dinar and Mody, 2004). Whereas pricing can be used as a tool for achieving efficiency, the effects of pricing can vary: after a price adjustment farmers may prefer to plant less water-intensive crops or use modern irrigation techniques, but they may also plant more water-intensive crops that have a higher market value, and hence increase the amount of water they use. The latter is the ―expansion effect‖ outlined by Dinar and Mody (2004:113). Alternatively, farmers may increase the area planted to adjust their income. The variety of potential farmer responses

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shows the importance of efficiency in water use and the need to supplement pricing policies with complementary conservation tools to achieve sustainability (Dinar and Mody, 2004:113). Despite the problems and complication of its implementation, pricing can be used as a tax with the goal of minimizing water use for agricultural production while maintaining the same amount of output. Pricing mechanisms can be used in conjunction with the establishment of water markets and the attribution of private water rights (Johansson et al., 2002; Wichelns and Oster, 2006; Legras and Lifran, 2006; Loehman and Dinar, 1994:237). If implemented correctly, quantitative restrictions such as quotas can be used as a complementary or substitute policy instrument for water pricing. The quotas are likely to be more successful if they are coupled with the possibility of trading the amount of water users are entitled to (Bate, 2002). And, lastly, regarding pricing and implementing incentive schemes, a combination of (i) price and quota policies, together with (ii) regulations, incentives, and public policies especially at the farm level, can also be formulated (Wichelns and Oster, 2006; Dinar and Mody, 2004).

Institutions of Water Management It is possible to envision three alternative institutional structures for the management of water: public institutions, private firms, and user associations. Andwandter and Ozuna (2002:688) argue that there is no a priori reason to claim that public water utilities are inefficient. Their argument is that inefficiency of the public sector in water management, which is an output-regulated industry, is caused by the absence of competitive pressures and the presence of information asymmetry, which in turn causes principal-agent and regulatory problems. It is important to assess the productive efficiency of different management institutions and different pricing strategies for irrigation water in order to evaluate the benefits and problems of each allocation mechanism and institution in juxtaposition. Table I provides a taxonomy of different combinations of institutions and price determination. Some of the combinations are not realistic—such as privately managed water and centralized pricing—and those boxes are empty. The productive efficiency of P1 and P3 can be identical, since they will be determined such that the costs of water distribution are covered and water use is minimized in order to achieve a given output. However, P3 is likely to be higher than P1 since the private firm is maximizing its profit whereas P1 is determined such that the social cost is minimized. Overall price ranking is where P3>P1=P4>P2>P5. The experience of WUAs shows that water users are short sighted and try to minimize the price without much concern for future problems, unless the users are made part of the debate and decision-making process and they are informed about the costs of running a decentralized irrigation-management institution. Public water management institutions are not dependent on the collected water fees for survival and can forego fees if there are political gains at stake. Private companies or user associations cannot forego the collection of fees since their financial viability rests on these fees.

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Table I. Productive efficiency of water use. Pricing/Management

Public management

Market pricing

Centralized determination

Private company P3—Highest possible price: Monopoly pricing  social costs

price

Participatory pricing

Users (Cooperative/WUA)

P1—Optimum pricing of water: social costs minimized

P4

P2

P5—Lowest possible price: Users lack a long-term vision of the project sustainability

Decentralization of irrigation management to water user associations is the trend throughout the world, in part due to the promotion of decentralization by donors and development agencies. There were several reasons that initiated the transfer of irrigation management from central authorities to other institutions. These can be summed up as: central authorities‘ inability to recover capital costs and partial recovery of O&M costs; the difficulty of implementation of even marginal cost pricing and collection of the fees related to it; lack of incentives and social norms to conserve water; improvement of control of water delivery with regard to timing, frequency, duration, quantity, improved access to and stability of irrigation systems; and implementation costs (such as administrative and compliance costs) related to pricing methods (Wichelns, 1999; Facon, 2002; Johansson et al., 2002; Unver and Gupta, 2003; Tsur, Roe, Doukkali and Dinar, 2004). Hence, efficiency can be attempted through decentralization and farmers‘ participation, leading to financial sustainability, especially with a balanced WUA budget. An important point related to decentralization is that, unless WUAs have clearly defined property rights over the water they control, their functioning will not have significant impacts (Johansson et al., 2002). If WUAs provide water with improved service delivery, this eases the ―buy-in‖ process of farmers in terms of WUAs‘ gaining the approval of farmers regarding the policies followed (Dinar and Mody, 2004:115). However, as the pricing discussion has outlined, there is need for oversight of pricing for it to induce efficiency under the management of water users. The next section discusses the experience of Turkey with WUAs and the impact of decentralization. To conclude, there is no unique prescription for efficient pricing and use of water. Unver and Gupta (2003:326) claim that farmers assume they have the right to irrigate and hence they are not willing to pay for water. In addition, there may also be opposition coming from political groups to slow down reform efforts in water policies (Johansson et al., 2002:190). Based on the above-mentioned points, improving social welfare in water use is dependent on the elaboration of an overall policy initiative (Dinar and Mody, 2004:113). Rather than coming up with a single blueprint, any policy designed, or institution crafted, should be founded on the geographic, political, social, cultural, and economic settings of the country. This also includes complementing specific pricing reforms by agricultural policies while at

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the same time considering linkages with other economic policies (Ostrom, 1992; Dinar and Mody, 2004; Tsur et al., 2004). For many of these policies to be implemented, states should have a significant role. The next section discusses the case of water resources in Turkey and focuses on decentralization of irrigation management in order to determine whether it functions according to the abovementioned proposals for the efficient use of water.

Water Resources and Irrigation in Turkey Turkey has an area of 78 million ha; among the 26 million ha of arable land, the feasible area for irrigation is limited to 8.5 million ha. As of 2007 5.2 million ha are irrigated and by 2023 the General Directorate of State Hydraulic Works (DSI) projections target irrigation of an additional area of 1.3 million ha (DSI , 2008). Table II shows that in 2004 agricultural irrigation consumed the largest share of water in Turkey. Table II. Use of water by different sectors in Turkey (million m3). 1990

%

2000

Irrigation

22.0

72

29.3

Drinking and utility

5.1

17

Industrial

3.4 30.6

Total

%

2004

%

75

29.6

74

5.8

15

6.2

15

11

4.2

10

4.3

11

100

39.3

100

40.1

100

(Source: DPT, 2007)

Annual precipitation in Turkey in 2007 was 643 mm on average, amounting to 501 billion m3 per year (DSI, 2008). Total gross actual renewable water potential is calculated to be 234 billion m3 per year; however, considering technical and economic constraints, only 112 billion m3 (95 from domestic rivers, three from neighboring countries and 14 from groundwater) of this amount is estimated to be used for consumption. In 2007, per capita fresh water is calculated to be around 1,650 m3/year. However, by 2030, considering the 100 million population projection of the Turkish Statistical Institute, per capita fresh water will drop to the level of 1,120 m3/year (DSI, 2008). Farmers use ground methods (border-furrow) on almost 92 percent of the irrigated area in Turkey. The remaining area is irrigated by pressured methods (drip-sprinkler). Currently there are no water markets in Turkey and pricing of irrigation water is area and crop based. Inefficient and excess irrigation in Turkey have already resulted in environmental problems, such as salinity and waterlogging, especially in Southeast Anatolia (Adaman and Ozertan, 2007). Since 1993 the operation and management of irrigation schemes have been transferred to Water User Associations. The following section examines the WUAs and evaluates their

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impact on the sustainability of water use and equity of distribution following decentralization reforms.

Decentralization of Irrigation Management in Turkey In Turkey, DSI constructed, operated, and maintained the large-scale irrigation infrastructure (Unver and Gupta, 2003) until decentralization began in the 1990s. The director of the DSI Operation and Maintenance Department asserts that the act that founded the state agency in 1954, based on the example of the Bureau of Reclamation in the USA, granted the institution the right to transfer the management of irrigation infrastructure. In 1964 only very small-scale irrigation systems were transferred to the users, and until 1993 there were no significant developments on this front. DSI operated the irrigation schemes with a top-down approach that had low levels of farmer participation. In Turkey the main reason for the inability or unwillingness of the state agency to collect the fees was a deliberate attempt to subsidize the irrigation water within a hyperinflationary context. The law imposed a ten-percent fine on the irrigation due when a farmer failed to pay, and did not index the debt to inflation. In a hyperinflationary economy this meant that farmers did not pay significant amounts for irrigating their fields. Under these circumstances, costrecovery rates for the irrigation projects were very low—at around ten percent (Akuzum, Kodal and Cakmak, 1997:552). Maintenance could not be carried out in many cases due to lack of funds. Hence there was a serious need for change for the long-term sustainability of irrigation projects. Turkey‘s model of irrigation management transfer was inspired by the Mexican example (Palerm-Viqueira, 2004), which was also promoted by the World Bank (Whiteford and Melville, 2002:17). Harris (2005:186) claims that state agencies had many expectations from WUAs in Turkey.+ WUAs were expected to increase efficiency, to promote sustainability of irrigation resources, and to establish horizontal networks among farmers, especially in the southeast of Turkey—the case of Sanliurfa WUAs will be evaluated throughout this section. This expectation was based on the belief that WUAs, which are in charge of providing irrigation services to their members, would provide the first experience with horizontal associations rather than the predominantly vertical tribal or kinship ties. Horizontal networks are seen as necessary to transform the rigidity of tribal hierarchies in the southeast, reduce social inequalities, and increase communication among farmers (Kudat and Bayram, 2000). Horizontal associations tend to have a more positive impact on collective action and development than do vertical associations that rest upon exploitation and coercion (Skidmore, 2000). Today, DSI still maintains ownership of the infrastructure but the operation and maintenance of the secondary and tertiary canals are transferred to WUAs. Even though Officials from the Turkish State Hydraulic Works (DSI) traveled to Mexico a few times under the guidance of the World Bank in order to see the functioning of that system on the ground (Svendsen and Nott, 1999). + The Turkish name for WUAs is Sulama Birligi and the literal translation would be Irrigation Union. In the literature, different authors refer to them using a variety of terms such as Water User Associations (Kudat and Bayram, 2000), Irrigation Associations (Svendsen, 2001), or Water User Groups (Harris, 2004). WUAs were created in cases where the irrigation scheme covered more than one village (Svendsen, 2001). In other cases it was the village administration that took over the operation and management responsibility.

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irrigators are in charge of management, technical staff are hired to carry out the operation of the system (Palerm-Viqueira, 2004). In general the legal standing of WUAs is guaranteed by the enabling law, which authorizes their establishment, and the transfer agreement between the state agency and the WUA. In the case of Turkey the transfer of irrigation management to the associations progressed much faster than planned (see Table III). In 1995 alone the area transferred was three times that in the yearly plan. As of 2007 DSI has decentralized more than two million ha to water users in Turkey (DSI, 2008). Even though the majority of irrigation schemes were transferred to WUAs, there were also provinces where the users demanded the right to manage irrigation via cooperatives—such as Tekirdag and Edirne, among others. Table III. Distribution of total area of irrigation transfer by type of institution (1992–2002).

Years 1992 1993 1994 1995 1997 1998 1999 2000 2001 2002 Years 1992 1993 1994 1995 1997 1998 1999 2000 2001 2002

Village authority Area (ha) 15,006 13,348 23,891 39,877 30,488 31,165 32,324 33,067 33,643 34,205 WUA Area (ha) 18,451 18,643 195,119 878,861 1,162,634 1,350,955 1,387,859 1,475,137 1,518,118 1,543,462

Number 93 88 169 157 213 211 214 214 215 215 Number 16 17 68 104 250 287 309 328 336 341

Municipality Area (ha) 29,591 30,594 43,110 51,005 51,607 52,386 54,126 55,275 56,619 57,338 Cooperative Area (ha) 280 1,375 4,559 6,561 33,353 48,468 54,188 54,233 54,318 58,699

Number 63 66 107 90 130 130 131 133 136 145 Number 2 5 14 14 33 37 42 42 44 53

Source: Kumbaroglu (2004:89).

Responsibilities of WUAs The associations are set up by the local authorities in an irrigation zone and apply to DSI in order to sign the transfer agreement and protocol that gives them the right to collect fees

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and assigns them the responsibility to distribute water and maintain the canals. DSI maintains the ownership of the systems and can dissolve the associations if there is inappropriate operation and maintenance. The transfer agreement is signed between DSI and the WUA and determines the responsibilities of the association (Halcrow-Dolsar, 2000a:2.3). According to the association by-law, a WUA is responsible for distributing water, maintaining the canals, and collecting the fees within its zone. WUAs are in charge of collecting the water demand forms before the beginning of each irrigation season (usually in April), and they forward the total amount required to the state agency (DSI), which is responsible for allocating the amount of water from the reservoir. According to Kadirbeyoglu‘s (2008) research there are water distribution problems at the tail end of the schemes. Insufficient access to water could also result from political pressures that have the potential to divert water towards richer and larger landowners. In terms of fee collection, there were cases of WUAs in Sanliurfa where executive committee members and large landowners did not pay or paid reduced fees (Kadirbeyoglu, 2008). Hence decentralized service provision could lead to inequalities in access to services if there are significant resource or power asymmetries at the local level.

Structure of a WUA A WUA is composed of a council, an executive committee, a chair, a general secretary (who is an agricultural engineer), a treasurer, and other association personnel. According to the by-law, the main decision body of a WUA is the council. The council is composed of the local authorities who are permanent members (such as the village headmen and the mayor) and selected or elected representatives from each village. The council has a four-year term. The total number of representatives of a WUA is a function of the number of villages and districts that are within its boundaries. The council is responsible for: the election of the chairperson and the members of the executive committee; the approval of work plans and the budget; determining or approving irrigation fees for the coming season; the decision to acquire machinery and employ new personnel. The council meets twice a year. The general secretary of the association is required to have a university degree in agricultural engineering and is responsible for the steering of the associations‘ daily operations and coordination. The chairperson of a WUA is elected by the council members for four years. The WUA is run by an executive committee, which is headed by the chair of the association. The members of the executive committee are elected via secret ballot by the council from its members for a one-year term. Although important decisions like approving the budget and determining the irrigation fees are taken by the council, the executive committee is responsible for the day-to-day functioning of the association. It is responsible for examining the budget, for preparing the yearly work and investment plans of the association, and for presenting it to the council, and making sure that the expenditures are made according to budgetary provisions.

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In Sanliurfa most of the chairs of WUAs have over-extended their decision-making powers. In such cases, the council is effective insofar as it keeps the irrigation fees at the lowest possible level, but other decisions (such as employment and the purchase of machinery) are made predominantly by the chair (Kadirbeyoglu, 2008).

Budget of WUAs Unlike the local governments, which are dependent on transfers from the central state budget in order to function, WUAs have an independent income-generation system. They devise their planned budget prior to the council meeting in November. Once approved, the budget provides a guideline on how the revenues will be spent during the following year. The revenues of a WUA consist mainly of irrigation fees, donations, aid, and fines. The irrigation fee constitutes the majority of the revenues—approximately 85 percent. The fees (per donum ) are set by each association and depend on the crop that will be cultivated (Unver and Gupta, 2003). The initial results show that while the fee collection rate prior to the transfer was on average 38 percent between 1989 and 1994, it reached an average of 72 percent in 1995 under the governance of WUAs (Svendsen and Nott, 1999). The associations have a better performance in collecting irrigation fees in comparison with the state agency, because their main source of revenue is irrigation fees. It is imperative for them to find ways to make farmers pay—for instance, they do not allow water use if the farmer has not paid for the previous year. They can also impose sanctions such as interest on debt or legal action leading to enforcement by a bailiff.+ In general, WUAs send the list of their debtors to Ziraat Bankasi (the Agricultural Bank) where farmers‘ ―direct income support‖ is deposited by the state. The bank automatically transfers the amount the farmer owes to the association‘s account (Kadirbeyoglu, 2008). The chair has the authority and responsibility to disburse expenditures authorized by the council. There are some guidelines that are put in place in order to determine the share of each expenditure item in the budget, and these are loosely followed by WUAs. One such criterion stipulates that the share of the maintenance and repair item in the budget be around 30 percent of total expenditures. This is put in place in order to ensure that an appropriate level of maintenance is undertaken each year by the WUA. In the planned budget, maintenance and repair are allocated approximately 25 to 30 percent of total expenditures. However, during the budget year, this portion is reduced to approximately 10 percent through transfers to expenditure items such as personnel salaries, their social security payments and taxes (Kadirbeyoglu, 2008). Furthermore, the expenditure item that can easily be cut in case of insufficient revenue collection is maintenance. Such problems with maintenance are common throughout the world. Jensen, Rangeley and Dieleman (1990:51) claim that an estimated 50 percent of World Bank irrigation projects have deteriorated because maintenance is seen as the most easily postponable expenditure.

The donum is the measurement unit used among farmers and is approximately 919.3 square meters (i.e. 10 donums is approximately one hectare). + Kumbaroglu‘s (2004:160) survey conducted with 113 chairpersons and 115 general secretaries of WUAs in Turkey concludes that approximately 90 percent of the interviewees responded that they were imposing sactions on farmers.

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The associations in Sanliurfa have a reputation for corruption. Harris (2005:190), who examined the case of irrigation in Sanliurfa, indicates that the main problems of the associations are embezzlement of funds, nepotism, and injustice. The budgetary autonomy enables the associations to decide freely about their expenditure items. This autonomy, however, should be complemented by systematic and in-depth audit if embezzlement and corruption are to be prevented.

Audit of WUAs The executive board members are in charge of auditing the day-to-day operations of WUAs. Self-auditing mechanisms for WUAs do exist but are not widely used (HalcrowDolsar, 2000b:141). A group of councilors can be selected to audit the accounting, to interpellate the chair, to scrutinize the annual report submitted to the council by the chair, and to impeach the chair (Cetin, 2003:71). DSI has the right to oversee the management of the associations, and the department of operation and management can audit WUAs. At the November meeting each year, the WUA executive is responsible for the presentation of the annual report to the councilors. This report details the operations of the WUA and how the expenditures were allocated between various budgetary items. This provides the basis for councilors‘ decision to approve the finalized budget of the previous year. If the councilors fail to approve the finalized budget, legal processes will make sure that an investigator is sent from the Ministry of Interior. Some WUAs do not provide printed budgets and annual reports. In such cases the transparency of the associations is compromised. The planned budget for the following year, once approved by the council, is sent to DSI for feedback. Then the budget needs the approval of the governor of the province. If the governor‘s office does not object to the document within 15 days, the budget is considered official. Hence the routine audit of the associations‘ budget is the responsibility of the governor‘s office on a yearly basis. A study conducted on the WUAs of Sanliurfa and Aydin show that either there is no regular auditing or it is done by incompetent officials, so effective auditing is far from reality, according to general secretaries of the associations (Kadirbeyoglu, 2008). The Local Authorities Director in the governor‘s office in Aydin has asserted that they received the budgets of the associations for audit and rubber-stamped them unless there was a complaint by users or councilors (Kadirbeyoglu, 2008). The Halcrow-Dolsar (2000a:2.10) report on the irrigation systems in the GAP region claims that the ineffectiveness of the audit process is a result of the lack of skilled personnel in the governor‘s office. In Sanliurfa, since the establishment of the WUAs in the 1990s, there has only been one audit carried out by the Ministry of Interior investigators. These auditors were sent from Ankara following a demand by the governor of Sanliurfa at the time, and did not entertain any local ties (Halcrow-Dolsar, 2000a:2.11). Following their investigation, many chairpersons and general secretaries were charged, and some were even sentenced to prison terms (Dilek, 2002:1). This was a one-shot audit and further action has not been taken. Overall, decentralization of irrigation management offers a possibility for improving the sustainability of water use for irrigation purposes while at the same time creating opportunities for the participation of farmers in the management of the associations. The DSI is responsible for supervising the associations, but fails to do so effectively (Unver and Gupta, 2003).

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decentralization of irrigation management in Turkey shows that in practice there are WUAs that function according to the by-laws and operate the irrigation infrastructure without much complaint from the users. However, in the absence of monitoring and oversight by the users and the state agencies and ministries, these associations can be captured by the elite of the locality and succumb to corruption and embezzlement of funds that are collected from the water users. Especially in regions where there are significant inequalities in the distribution of resources and power, WUAs are unable to ensure equitable distribution of water and fail to enforce irrigation fees equally—executive committee members and powerful farmers either evade fees or get significant reductions (Kadirbeyoglu, 2008).

CONCLUSION The first part of this chapter discussed the theoretical arguments for the achievement of efficient water use. The discussion of irrigation management in Turkey shows that, first, decentralization was not accompanied by a quota or volume-based pricing—as of 2009, there is no discussion on such policy alternatives by related ministries—and second, it was also not complemented by targeting environmental sustainability through efficient use of water. After decentralization, irrigation fees in Turkey are still area- and crop-based and farmers are not provided with incentives to apply and conserve water efficiently. This is clearly observed in southeast Turkey where waterlogging and salinity problems have been exacerbated in recent years; the discussion in this chapter on prevailing problems also mostly applies to users in this region. The overall impact has been the ability of WUAs to collect the fees much better than the public agency did, because they are dependent on them. In general, although decentralization potentially has benefits in terms of service delivery and reduction of the operation and maintenance costs of irrigation schemes, it does not guarantee equitable access to water. For decentralization to have long-term benefits there has to be thorough monitoring of the activities of the associations. This is necessary in order to ensure the equality of service delivery, fee collection from farmers, and the maintenance of the infrastructure in the long run. The state bureaucracy should provide the associations with support, not only on legal and financial, but also with managerial and technical matters— especially in improving agricultural practices to achieve long-term sustainability. The outcomes of decentralization show that seeing water as an economic good and providing it within a decentralized setting in the absence of monitoring and accountability-enhancing measures prevent the benefits of irrigation from materializing, especially in areas with significant inequalities in access to resources and power dynamics. This finding is important in showing that structural reform programs should be accompanied by complementary measures to reform and strengthen the capacity of the state bureaucracy and legal frameworks. The theoretical and empirical discussion of water management shows that, in order to achieve sustainable water use, it is not sufficient to transfer the responsibility to non-state institutions such as WUAs; this may even be too much to ask for from WUAs. There has to be a capable state bureaucracy to ensure effective monitoring of the associations and to enforce the rules and regulations that govern the decentralized institutions. In the absence of such an overarching legal and institutional framework, it is very hard for decentralized

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institutions to function properly. These are important insights for other types of neoliberal reforms: in the absence of a capable bureaucracy and regulation, structural adjustment programs—especially in the agricultural sector, on which almost 40 percent of Turkey‘s population depend for their livelihood—are not likely to have a positive impact on rural development.

REFERENCES Adaman, F., & Ozertan, G. (2007). Perceptions and practices of farmers towards the salinity problem: the case of Harran Plain, Turkey. Int. J. Agricultural Resources, Governance and Ecology, 6 (4/5), 533–551. Agrawal, A., & Ostrom, E. (2001). Collective action, property rights and decentralization in resource use in India and Nepal. Politics and Society, 29 (4), 485–514. Akuzum, T., Kodal, S. & Cakmak, B. (1997). Irrigation management in GAP. Water Resources Development, 13 (4), 547–60. Allan, T. (1999). Productive efficiency and allocative efficiency: Why better water management may not solve the problem. Agricultural Water Management, 40, 71–75. Anwandter, L. & Ozuna, T. Jr. (2002). Can public sector reforms improve the efficiency of public water utilities? Environment and Development Economics, 7, 687–700. Bate, R. (2002). Water—Can Property Rights and Markets Replace Conflict? In Morris, J. (Ed.), Sustainable Development: Promoting Progress or Perpetuating Poverty? London: Profile Books. Beall, J. (2005). Decentralizing government and decentering gender: Lessons from local government reform in South Africa. Politics and Society, 33 (2), 253–76. Bell, R. (2002). Capturing benefits from water entitlement trade in salinity affected areas: A role for trading houses? The Australian Journal of Agricultural and Resource Economics, 46 (3), 347–366. Bjornlund, H., & McKay, J. (2002). Aspects of water markets for developing countries: experiences from Australia, Chile, and the US. Environment and Development Economics, 7, 769–795. Boratav, K., Turel, O., & Yeldan, E. (1996). Dilemmas of structural adjustment and environmental policies under instability: Post-1980 Turkey. World Development, 24 (2), 373–93. Brennan, D., & Scoccimarro, M. (1999). Issues in defining property rights to improve Australian water markets. The Australian Journal of Agricultural and Resource Economics, 43 (1), 69–89. Budds, J., & MacGranahan, G. (2003). Are the debates on water privatization missing the point? Experiences from Africa, Asia and Latin America. Environment and Urbanization, 15 (2), 87–113. Cetin, N. (2003). Tarimda Su Yonetimi ve Katilimcilik (Water Management in Agriculture and Participation), Unpublished Doctoral Thesis. TODAIE (Turkiye ve Ortadogu Amme İdaresi Enstitusu Genel Mudurlugu), Ankara.

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Christensen, P. (1998). Middle Eastern Irrigation: Legacies and Lessons. In J. Albert, M. Bernhardsson & R. Kenna (Eds.), Transformations of Middle Eastern Natural Environments: Legacies and Lessons. New Haven, CT: Yale University Press. Dayton-Johnson, J. (2003). Small-holders and water resources: A review essay on the economics of locally-managed Irrigation. Oxford Development Studies, 31 (3), 315–339. Dilek, M. (2002). Sulama Birlikler (Water User Associations). Sanliurfa: Koylere Hizmet Goturme Birligi Yayinlari. Dinar, A., & Mody, J. (2004). Irrigation water management policies: Allocation and pricing principles and implementation experience. Natural Resources Forum, 28, 112–122. DPT (2007). Toprak ve Su Kaynaklarinin Kullanimi ve Yonetimi (Use and Management of Soil and Water Resources). Special Expertise Commission Report. Available at: http://ekutup.dpt.gov.tr/imalatsa/tastopra/öik671.pdf DSI (2008). 2007 Yili Faaliyet Raporu. Ankara: DSI. Facon, T. (2002). Downstream of irrigation water pricing—the Infrastructure design and operational management considerations. Presented at the Irrigation Water policies: micro and macro considerations, Agadir, Morocco, 15–17 June, 2002. Gorriz, C. M., Subramanian, A., & Simas, J. (1995). Irrigation Management Transfer in Mexico: Process and Progress. Washington, DC: World Bank. Halcrow-Dolsar (2000a.) GAP Sulama Sistemlerinin Isletme Bakimi ve Yonetimi—Taslak Sonuc Raporu (GAP Irrigation Systems Management, Operation and Maintenance— Final Report). Ankara: GAP. Halcrow-Dolsar (2000b). Sulama Birligi Yonetim El Kitabi (Handbook of Water User Association Management). Ankara: GAP. Harris, L. M. (2004). Modernizing Gender: Social Geographies of Waterscape Evolution in Southeastern Turkey. PhD Thesis, University of Minnesota. Harris, L. M. (2005). Negotiating Inequalities: Democracy, gender, and politics of difference in water user groups of Southeastern Turkey. In Adaman, F. & Arsel, M. (Eds.) Environmentalism in Turkey: Between Democracy and Development? Aldershot, UK: Ashgate. Hellegers, P. J. G. J. (2006). The role of economics in irrigation water management. Irrigation and Drainage, 55, 157–163. Jensen, M. E. , W. R. Rangeley, & Dieleman, P. J. 1990. Irrigation Trends in World Agriculture. In Irrigation of Agricultural Crops, ed. B. A. Stewart & D. R. Nielsen. Madison: American Society of Agronomy. Johansson, R. C., Tsur, Y., Roe, T. L., Doukkali, R., & Dinar, A. (2002). Pricing irrigation water: a review of theory and practice. Water Policy, 4, 173–199. Kadirbeyoglu, Z. (2008). Decentralization and Democratization: The Case of Water User Associations in Turkey, Unpublished PhD Thesis, McGill University, Montreal, Canada. Khanal, P. R. (2003). Participation and Governance in Local Water Management. Paper read at Alternative Water Forum, May 1–2, 2003, at Bradford University, UK. Kibaroglu, A. (2003). Sustainable Development of Irrigation Systems in the Southeastern Anatolia Project (GAP) Region. Paper presented at the First International Conference on Hydrology and Water Resources in Asia Pacific Region, March 2003, Kyoto, Japan. Kolavalli, S., & Brewer, J. D. (1999). Facilitating user participation in irrigation management. Irrigation and Drainage Systems,13, 249–73.

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Kudat, A., & Bayram, M. (2000). Sanliurfa-Harran Plains On-Farm and Village Development Project. In A. Kudat, S. Peabody and C. Keyder (Eds.), Social Assessment and Agricultural Reform in Central Asia and Turkey. Washington, DC: World Bank. Kumbaroglu, S. (2004). Sulama Birliklerinin Hizmette Etkinlik ve Verimlilik Ilkeleri Dogrultusunda Yeniden Yapilandirilmasi (Restructuring of WUAs for Service Effectiveness and Efficiency), TODAIE Unpublished Doctoral Thesis. TODAIE (Turkiye ve Ortadogu Amme Idaresi Enstitusu Genel Mudurlugu), Ankara. Lee, T. R. (1990). Water Resources Management in Latin America and the Caribbean. Oxford: Westview Press. Legras, S., & Lifran, R. (2006). Dynamic taxation schemes to manage irrigation-induced salinity. Environmental Modeling and Assessment, 11, 157–167. Loehman, E., & Dinar, A. (1994) Cooperative solution of local externality problems: A case of mechanism design applied to irrigation. Journal of Environmental Economics and Management, 26, 235–256. Meinzen-Dick, R. S. (1997). Farmer participation in irrigation: 20 years of experience and lessons for the future. Irrigation and Drainage Systems, 11, 103–18. Nikku, B. R. (2002). Water Users Associations in Irrigation Management: Case of Andhra Pradesh, South India Opportunities and challenges for collective Action. Paper read at 9th Biennial Conference of the International Association for the Study of Common Property, 12–17 June, at Victoria Falls, Zimbabwe. Ostrom, E. (1992). Crafting Institutions for Self-governing Irrigation Systems. San Francisco: Institute for Contemporary Studies. Ozcan, G. B. (2006). A critical analysis of decentralisation and local economic development: the Turkish case. Environment and Planning C: Government and Policy, 24, 117–138. Palerm-Viqueira, J. (2004). Irrigation institutions typology and water governance through horizontal agreements. http://www.geocities.com/jacinta_palerm accessed on October 20, 2004. Perry, Rock & Seckler. (1997). Water as an economic good: A solution or a problem? In: Water: Economics, Management, and Demand. E. & F.N. Spon, London. U.K., 3-12. Polanyi, K. (1944). The Great Transformation: The Political and Economic Origins of Our Time. Boston: Beacon Press. Ribot, J. (2002). Democratic Decentralization of Natural Resources: Institutionalizing Popular Participation. Washington, DC: World Resources Institute. Sehring, J. (2007). Irrigation reform in Kyrgyzstan and Tajikistan. Irrigation and Drainage Systems, 21, 277–290. Skidmore, D. (2000). Civil Society, Social Capital and Economic Development. Paper read at 41st International Studies Association, March 14–18, Los Angeles. Svendsen, M. (2001). IMT Case Study: Turkey. Paper read at International e-mail Conference on Irrigation Management Transfer, June–October 2001. Svendsen, M., and Nott, G. (1999). Irrigation Management Transfer in Turkey: Process and Outcomes. EDI Participatory Irrigation Management Case Studies Series, http://www.inpim.org/files/Documents/sve_turk.pdf (accessed 14 July 2009). Tsur, Y., Roe, T. L., Doukkali, R., & Dinar, A. (2004) Pricing Irrigation Water: Principles and Cases from Developing Countries. Washington, DC: RFF Press. Unver, O., & Gupta, R.K. (2003). Water pricing: Issues and options in Turkey. Water Resources Development, 19 (2), 311–330.

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Veldwisch, G. J. (2007). Changing pattern of water distribution under the influence of land reforms and simultaneous WUA establishment. Irrigation and Drainage Systems, 21, 265–76. Whiteford, S., & Melville, R. (2002). Water and Social Change in Mexico: An Introduction. In S. Whiteford and R. Melville (Eds.), Protecting a Sacred Gift: Water and Social Change in Mexico. San Diego: Center for US–Mexican Studies. Wichelns, D. (1999). An economics model of waterlogging and salinization in arid regions. Ecological Economics, 30, 475–491. Wichelns, D., & Oster, J. D. (2006). Sustainable irrigation is necessary and achievable, but direct costs and environmental impacts can be substantial. Agricultural Water Management, 86, 114–127. Wilder, M., & Romero Lankao, P. (2006). Paradoxes of decentralization: Water reform and some implications in Mexico. World Development, 34 (11), 1977–95.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 10

―SUSTAINABILITY‖ IN AGRICULTURE: STAKEHOLDERS’ PERCEPTIONS IN TURKEY Baris Karapinar World Trade Institute, University of Bern, Switzerland

ABSTRACT For decades, the agricultural policies of Turkey have been driven almost exclusively by economic objectives, treating other social and environmental concerns as issues of secondary importance. Similarly, the scope of various structural adjustment programs, including the Agricultural Reform Implementation Project (ARIP), did not extend beyond narrowly set economic goals. However, such a unidimensional approach to policymaking looks increasingly inadequate in dealing with new economic, social and environmental challenges facing Turkish agriculture. Hence, policy priorities need to be revised and new institutions should be developed to design and execute multidimensional policy objectives. In this context, the concept of ―sustainability‖ may offer a long-term policy framework. However, the questions of how to define sustainability and its relevance in setting policy priorities are contentious. This chapter discusses the results of a stakeholder perception survey, examining how different groups of Turkish stakeholders define sustainability and how they set or shift priorities when they face policy trade-offs. The results of the survey show that although the vast majority of stakeholders think that Turkish agriculture is not sustainable, there are marked variations among them regarding their priorities on different dimensions of sustainability. There is a general convergence of opinion about the deterioration of the environment, whereas the stakeholders‘ perceptions about potential solutions remain divergent.

INTRODUCTION In early 2008, the initial supply shortages in major agricultural commodities and the corresponding market volatility turned into a ―food crisis‖. World prices of wheat, rice, maize and oilseed crops reached their highest levels in nearly three decades. Major stocks had been reduced to their lowest levels, yet food prices continued to mount, straining the budget of low

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income households all around the world. This led to some political tensions too—as people took to the streets in more than 30 countries, demanding their governments take action. The prices have come down since then, amid the global financial crisis; however, the ―food crisis‖ has once again brought the issue of agricultural development to the forefront of the public agenda in developing countries (Karapinar and Haeberli, Forthcoming). This was also the case in Turkey—as maintaining food security has always been a part of the official agricultural policy. On top of the alarm caused by market volatilities, there are other environmental and social challenges that Turkish agriculture policy needs to address. First, environmental degradation and increasing frequency of extreme climate events present a major threat to the future feasibility of farming, especially in ecologically vulnerable areas. Land erosion, desertification and salinization are serious problems undermining productivity (OECD, 2008). The sector also suffers from falling ground water levels, water pollution and increasing frequency and duration of droughts. In addition, climate change is posing a major challenge— as its potential impacts on the sector are projected to be largely adverse. Social concerns include the future viability of the small farm sector which seems to have been left out of the process of economic growth, leading to a large income gap and hence inequality between rural and urban areas. In this context, achieving ―sustainability‖—with its economic, social and environmental dimensions—is of crucial importance for agricultural and rural development in Turkey. However, the questions of how to define the term sustainability and how to measure it are contentious. There have been various definitions—used by economists, anthropologists and environmentalists alike—ranging from minimalist approaches defining it solely as the conservation of biodiversity and forests to more holistic approaches bringing in economic, social and even cultural dimensions (Ruttan, 1998). The majority of these definitions offer no traceable benchmarks to measure what is sustainable, for whom, for how long and at what cost. However, such lack of clarity has some political relevance in the context of public debates—as the term is an important element of the discourse affecting political decisions. Some argue that the concept has been deliberately kept vague so as to allow interest groups to define it in whatever way would best serve their interests (Aerni, 2009). As such, beyond its analytical purpose, the practice of defining sustainability is of political relevance. On the other hand, even if it is embraced as part of an objective progressive discourse, certain trade-offs and conflicting policy objectives in achieving what is perceived to be sustainable are often overlooked. Hence, there is a need to shed more light on how different group of stakeholders define sustainability, identify their objectives, and formulate their policy priorities. However, the literature analyzing the perceptions of relevant stakeholders in Turkey is scant (Adem, 2005). This chapter, therefore, will address the question of sustainability in Turkish agriculture. The approach taken here is based on an operational assumption that the attitudes of stakeholders toward sustainability are shaped by social perceptions and political interests which may lead to conflicting priorities and resulting policy actions. Rather than attempting to offer an explicit account of whether Turkish agriculture is sustainable or not, the chapter The most commonly used definition is the one adopted by the Bruntland Commission: ―Sustainable development is development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs.‖ (Brundtland, 1987).

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will undertake an empirical analysis of how major Turkish stakeholders perceive the various economic, social and environmental dimensions of sustainability in their country. Presenting the results of a survey involving 40 stakeholders, it will illustrate the patterns of divergence and convergence in the perceptions of different stakeholder groups. This chapter is organized as follows. First, it sketches the background by identifying some of the major economic, environmental and social challenges and policy trade-offs facing Turkish agriculture. Second, it introduces the stakeholder perception survey and presents a descriptive analysis of the survey results. Third, it examines the results of a cluster analysis identifying different perception groups with conflicting views of sustainability. The chapter concludes by drawing attention to alternative institutional approaches and policy recommendations.

SUSTAINABILITY IN TURKISH AGRICULTURE For decades, the agricultural policies of Turkey have been driven almost exclusively by the objective of economic growth, implying that environmental issues were considered to be ―second generation problems‖ (e.g. Aydin, 2005; Adem, 2005)—as this was the prevailing policy perception in many other developing countries too (Reardon, 1998). This view saw farmers‘ concerns about food production and income generation as more urgent and central than environmental degradation (Reardon, 1998). However, as the continuing trends of natural resource degradation intensify and the impact of climate change on agricultural supply systems unfolds, such a distinct separation of economic priorities from environmental concerns in policy-making becomes obscure. For instance, the recent droughts in major cereal producing regions in Turkey, which led to the contraction of agricultural value-added by more than seven percent in 2007 alone, as mentioned by Cakmak and Dudu in Chapter 5, have rung alarm bells, drawing public attention to growing environmental problems. Modeling studies on the impact of climate change project that such extreme events will increase in number and frequency, which will reduce the yields of large stretches of agricultural land (see Chapter 8 by Saysel). The response inevitably requires a shift in policy priorities and reform of the existing institutions which were not designed to serve multidimensional objectives beyond economic growth. Turkey‘s long history of neo-liberal ―structural adjustment‖ programmes has strongly influenced the direction and priorities of agricultural policy, especially in periods of economic difficulty. These packages came under the ―Washington Consensus‖ imposing financial liberalization and tight monetary policies involving limited government spending, wage repression and widespread privatization. These programmes, by design, had a narrow and exclusive focus on achieving fiscal stability, and hence they paid little attention to development in general, or to rural development in particular (de Janvry, Key and Sadoulet, 1997). Similarly, they did not address environmental issues or promote policies which would address growing environmental challenges. Yet, periods when Turkey enjoyed relative autonomy, thanks to strong economic growth, have not fared any better due to the culture of patronage and clientelism. The main objective has been to gain electoral support from rural areas, which comprise more than one-third of the country‘s electorate, rather than formulating goals and designing new policy tools to address

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social and environmental challenges (Akder, 2007). This has been reflected in the form of an unstable system of subsidies, which have always made a pendulum movement between the highs during parliamentary election times and the lows during financial crises often followed by ―structural adjustment‖ programmes (Cakmak and Akder, 2005). Even in periods when agricultural support reached relatively high levels, the share of spending on major agricultural and environmental services and R&D remained dismally small (see Chapter 13 by Karapinar and Temmerman). In this context, the integration of non-economic concerns into the national political system has been difficult, and the process has been largely driven by external stimuli (e.g. through the EU accession process) (Izci, 2005; Vilchez, 2005; Adem, 2005). For instance, in addressing environmental problems, it is often argued that the paternalistic state and its legislations are ineffective due to lack of actual implementing power, combined with corruption and clientelism (e.g Adaman, 1997; Adaman and Arsel, 2005; Kalaycioglu, 2001; Aydin, 2005).

Policy Challenges and Trade-Offs Despite being pursued as the main policy objective for decades, it is rather ironic that existing policies and institutions have largely failed to stimulate economic growth in agriculture in recent years. The sector, which is dominated by more than three million small farms with an average size of around five hectares, has been stagnant over recent years (see Chapter 5 by Cakmak and Dudu), although in the same period, the rest of the economy has been growing relatively rapidly. As a result, the income gap between rural and urban sectors has been widening. This is reflected in the fact that more than one third of those employed in the agricultural sector are living below the national poverty line, representing by far the highest rate of poverty among all sectors (World Bank, 2005). As such, the rural society is lagging behind in the process of economic development, facing relative and in some cases absolute poverty. The future viability of small farms hence poses a serious developmental challenge. The recent volatilities in world agricultural markets also raise questions about the fundamentals of the existing agricultural policies, especially in relation to subsidies and international trade (Karapinar and Haeberli, Forthcoming). The ―food crisis‖ of 2007–2008, during which international market prices of major food commodities reached their highest nominal levels in 50 years (Diaz-Bonilla, Forthcoming), caused consumer protests and riots in more than 30 countries, demonstrating that food security is also a national security concern in many developing countries (Schmidhuber and Matuschke, Forthcoming). In this context, Turkey‘s long-standing agricultural support and protectionist trade policies, which raise domestic prices and thereby support domestic producers at the expense of consumers, might not be politically feasible in the medium and long-terms. The government‘s agricultural support policy has been heavily based on market price support, which pushes domestic prices above world market levels. This means that the

Between 2003–2007, the industrial sector grew by more than 7 percent on average (at 1987 basic prices) (State Planning Organisation (SPO), 2009).

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support policy is largely financed through the transfers from consumers. Trade protectionism is a fundamental component of this policy.+ Turkey‘s average bound tariff is relatively high, slightly more than 60 percent, while the differences between its bound rates and applied tariffs are relatively small (see Chapter 18 by Haeberli).§ More importantly, the highest tariff rates, most of them three-digit, are applied to major food commodities such as cereals, meat, dairy products, and sugar (Cakmak and Akder, 2005). These rates enable policy makers to lift domestic prices well above world prices, a practice which favors domestic producers to the disadvantage of consumers. During the food crisis, however, Turkey had to slash its applied tariffs on major staple crops. The Turkish Grain Board (TMO), the body responsible for maintaining public stocks, sold part of its grain stocks at under market prices to calm the markets. Yet domestic prices continued to rise rapidly. Although the prices have since come down, amid the global financial crisis, they are still significantly higher than in 2005. Given the ―thinness‖ of international markets in agriculture, which is causing price volatility (Anderson, Forthcoming),€ and structural factors leading to growing demand, it is expected that the average price of food commodities will be higher in the next decade than that in the last decade (Jones and Elasri, Forthcoming). Under these new market circumstances, how the existing agricultural support and trade protection policies which traditionally prioritize domestic producers will be shifted to address the growing pressure on consumers is a major policy question. Moving beyond economic concerns, environmental degradation presents a major threat to the future feasibility of farming, especially in ecologically vulnerable areas. Land erosion, desertification and salinization are serious problems undermining productivity in Turkish agriculture (OECD, 2008). Due to ecologic and topographic conditions combined with anthropogenic factors, it is estimated that almost 80 percent of the country‘s land resources is affected by a moderate to very severe degree of erosion (Ozden, Dursun, Sevinc, 2000; Vilchez, 2005). This is particularly the case in the western interior, continental interior and south-eastern regions of the country. Similarly, salinization is a major concern, affecting an estimated area of 1.5 million ha of arable land (Keskin, 2001).± It is particularly severe in the South-eastern Anatolia which has received large scale investment in irrigation infrastructure through the GAP project (South-eastern Anatolia Project, generally known in Turkish acronym for ―Guneydogu Anadolu Projesi‖). In the Harran region of Sanliurfa alone, it is estimated that more than 15,000 hectares of arable land are threatened by salinity and 50,000 hectares by waterlogging (Adaman and Ozertan, 2007). The sector also suffers from falling ground water levels, water pollution, land subsidence and increasing frequency and duration of droughts. The analysis of the variations of the precipitation and aridity index series indicates that between the 1960s and the 1990s, there Considering that the poor spend the bulk of their income on agricultural commodities, high consumer prices means transferring incomes from the poor consumer to the farmer. + G33 is a group of countries pursuing a defensive trade agenda in multilateral trade negotiations. In addressing their concerns in relation to food security, livelihood and rural development, they argue for more flexibility in designating special products which should be subject to low or no tariff reduction and ―special safeguard mechanisms‖ against potential import surges. § Quite a large proportion of its bound tariffs, almost one-third of the total, are higher than 50 percent € ―Thin‖ in the sense that the share of agriculture in world GDP is three per cent, while it accounts for six per cent of international trade (Anderson, forthcoming). ± Also cited in (Vilchez, 2005).

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was a significant change in climate from more humid to dry and sub-humid conditions in Turkey (Turkes, 1999). In particular, water scarcity is reported to be acute in Central Anatolia, Marmara and the interior parts of the Aegean regions which supply substantial proportions of the country‘s agricultural output (Vilchez, 2005). Although, agricultural use constitutes the highest share of demand for water (about three quarters of the total), as discussed by Kadirbeyoglu and Ozertan in Chapter 9, growing demand due to urbanization and industrialization creates additional competition for resources, which restricts the availability of water for agriculture. In addition, it is projected that climate change will lead to a further reduction in the difference between precipitation and evapo-transpiration which will exacerbate water constraints in regions already suffering a water deficit (see Chapter 8 by Saysel). Hence, implementing effective water management policies and designing climate change adaptation strategies are major policy challenges. However, some of the environmental problems prevailing in many other developing countries are not so serious for Turkey. For instance, soil contamination due to chemical fertilizer use and deforestation are not major environmental threats. The average amount of fertilizer use is relatively low as compared to the world average. It grew only slowly from an already low base of 57 kg/ha in 1980 to 73 kg/ha in 2002 (FAOSTAT, 2006). Similarly, deforestation is not considered to be a major environmental concern for Turkey—as the area of forest has been increasing due to substantial efforts at afforestation (OECD, 2008).+ Addressing all the challenges mentioned above requires a multidimensional policy agenda for which the concept of sustainability could offer a framework with its economic, social and environmental dimensions. However, more empirical analysis is needed on how these dimensions are defined in the policy context of Turkey and how policy actors (i.e. stakeholders) set their priorities in face of conflicting objectives. Hence, investigating the perceptions and policy priorities of relevant stakeholders and identifying how they react to trade-offs is crucial for understanding the policy parameters of sustainability in Turkish agriculture.

STAKEHOLDER PERCEPTION SURVEY The author conducted a stakeholder perception survey in Turkey, between February and September 2007. Through a series of expert interviews with key informants who are familiar with the national debate on sustainability in agriculture, the most important stakeholders were identified. In addition, the relevant literature and media coverage were screened in a search for other important political actors. The selected stakeholders represented academia (university and research institutions), private sector associations, government, legislature (political parties), the mass media, domestic and international civil society (NGOs). Subsequently, a questionnaire in Turkish was designed in collaboration with the Bosporus

This was below the average for developing countries, 115 kg/ha in 2002 (author‘s calculation based on total fertilizer consumption divided by acreage of arable land) (FAOSTAT, 2006). However, China, which is the only country to have made remarkable progress in its yields and product diversification, increased its fertilizer consumption from 158 kg/ha in 1980 to 278 kg/ha in 2002. + Turkey contributed significantly to the United Nations Environment Programme (UNEP)‘s goal of planting 1 billion tree seedlings worldwide each year (OECD, 2008).

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(Bogazici) University in Istanbul. The questionnaire was finalized and sent out in February 2007 (a sample of the questionnaire can be found in Annex A). In total, 40 respondents completed and returned the questionnaires. The return rate was 48 percent. As shown in Figure I, the respondent group included 16 stakeholders from national NGOs (40 percent of the total), seven from governmental institutions (18 percent), five from universities and research institutions (13 percent), four from major political parties (legislature) (10 percent), four from private sector associations (10 percent), two from international NGOs (5 percent), and two from the mass media (5 percent) (the list of the respondent institutions can be found in Annex B). The results of the survey should be interpreted in light of the fact this was not a representative survey, albeit covering a sizeable selection of important stakeholders. The relatively higher share of the representatives of civil society and governmental institutions participating in the survey reflects their active role in public and policy debates.+ 100% 4

80%

2 2

Private Sector Associations

5

International NGOs Media

60%

16 40%

University and Research Institutions Domestic NGOs Political Parties

20%

4 Government 7

0% Stakeholders

Figure I. Number of participants and shares of the different stakeholder groups.

Survey Results The perception analysis undertaken based on the results of the survey consists of two parts: a descriptive analysis and a perception pattern analysis. The first section below offers some descriptive analysis of the responses to different sections of the questionnaire. It sketches the background for the perception pattern analysis which consists of a cluster Only one stakeholder, a domestic NGO, in the original list declined to take part in the survey, stating that they were not interested in agriculture related issues. The vast majority of the other non-responding stakeholders did not complete the questionnaire after their initial agreement to take part in the survey and the follow-up reminders. + Although their membership coverage is relatively limited, there has been a proliferation of NGOs taking part in policy debate since the 1990s (Aydin, 2005; Adem, 2005).

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analysis identifying different perception groups in the country. That section also includes a two-dimensional illustration of the positions of major stakeholder clusters. The objective here is to show the patterns of divergence and convergence in the perceptions of different stakeholder groups.

Descriptive Analysis The questionnaire consisted of four parts. In the first part (Part I), the respondents (stakeholder representatives) were asked to assess the general state of agriculture in Turkey. This section includes 10 different areas such as infrastructure, technology, and government subsidies. In Part II, the respondents were presented with a list of environmental challenges and were asked to indicate how they perceived the seriousness of these challenges in Turkey. Part III involved questions directly addressing the concept of sustainability in agriculture. It included subsections asking respondents to express opinion on the potential role of certain policies, technology tools and institutional approaches in achieving sustainability. They also identified their positions on a list of statements implicitly containing different political opinions. Part IV dealt with the future of agriculture in Turkey, where the respondents indicated their expectations and predictions.

General State of Agriculture In Part I, the respondents were asked to assess the general state of agriculture. On a scale from 1 (very high) to 4 (very low), they judged 10 important aspects of agricultural development. As listed in Table I, based on mean values, results show that the highest level of consensus among respondents was on their assessment of ―farm size‖ in Turkey which they rated as ―very low‖. They also perceived ―the level of educational attainment amongst farmers‖, ―the extent of irrigation facilities‖, ―the level of private investment‖ and ―the level of government subsidies (input & direct)‖ as low or very low. On the other hand they considered that the rate of rural to urban migration was high.

Environmental Challenges Part II of the questionnaire dealt with environmental problems facing Turkish agriculture. The respondents were first asked to rate the seriousness of items on a list of environmental problems on a scale from 1 (not serious at all) to 4 (very serious). As is indicated in Table II, ―global warming‖, ―deforestation‖, and ―water pollution‖ had the highest scores of perceived seriousness, ranking 1, 2 and 3, respectively. ―Land degradation (including soil erosion)‖ and ―increasing greenhouse gas emissions‖ ranked fourth and fifth. ―Damage to biodiversity‖ and ―destruction of grassland‖ were perceived to be serious but relatively less so. The results indicate that the Turkish stakeholders are particularly concerned about climate change and deforestation and water resources.

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Std. dev. 0.77

3.31

0.47

3. The extent of irrigation facilities 3.23 4. The level of private investment 3.13 5. Government subsidies, such as input support and direct subsidies 3.13 6. Adequacy of communication and transportation infrastructure in rural 3.08 areas 7. The extent of the use of new technologies 3.05

0.49 0.66 0.66

8. The contribution of agriculture to overall economic development

2.49

0.61

2.41

0.98

1.63

0.54

1. Farm size 2. The level of educational attainment amongst farmers

9. The level of inequality in land distribution 10. The level of rural-to-urban migration Scores: 1, very high; 2, moderately high; 3, low; 4-very low.

0.42 0.39

Table II. The perceived significance of the environmental challenges in Turkey. mean 1. Global warming

3.85

2. Deforestation

3.85

3. Water pollution

3.83

4. Land degradation (incl. soil erosion)

3.80

5. Increasing greenhouse gas emissions

3.72

6. Stalinization

3.66

7. Damage to biodiversity

3.60

8. Destruction of grassland

3.58

Scores:1, not serious at all; 2, not serious; 3, moderately serious; 4, very serious.

Std. dev. 0.36 0.43 0.38 0.41 0.46 0.48 0.50 0.55

In Part II, the respondents were also asked to assess a list of factors according to the extent to which they contribute to the worsening of the environmental problems listed above. On a scale from 1 (not a significant contributor at all) to 4 (highly significant contributor), the section covered 13 factors listed in Table III. Based on mean values, ―excessive use of plant protection (pesticide, herbicides etc.)‖ ranked first with an average score of 3.70, implying that the respondents considered it to be a ―highly significant contributor‖ to environmental problems. This was followed in order of importance, by ―excessive water consumption‖, ―wrong policy incentives‖, and ―excessive use of nitrogen fertilizers‖. The respondents also perceived ―weak support services‖ and ―lack of technical knowledge and skills‖ as ―moderately significant‖. However, they did not perceive ―loss of traditions in farming‖ and ―low degree of innovation‖ as highly significant contributors to the deterioration of the environment.

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The descriptive analysis of the survey results partly indicates that the attitude of stakeholders toward certain economic, social and environmental challenges is shaped by perceptions rather than by evidence-based scientific assessments. For instance, although environmental scientists do not consider the existing level of nitrogen fertilizer use in Turkish agriculture as a major environmental threat due to the relatively low average levels of use per hectare (OECD, 2008), the stakeholders seem to perceive that this is one of the most important factors contributing to environmental degradation (mean value 3.26). However, in this context, it should be noted that the perception of the respondents representing university and research institutions is in line with the official record on this issue—as they perceived that chemical fertilizer use is not as severe a problem (mean value: 2.75). Similar perceptions apply to the question of deforestation—as stakeholders believed that it is a serious environmental problem. However, official data show that the area of forests in Turkey has been growing, thanks to substantial efforts at afforestation—as explained above (OECD, 2008). As such, it is important to note that stakeholder perceptions do not necessarily reflect scientific evidence. Table III. To what extent do the following factors contribute to the worsening of environmental problems in Turkish Agriculture? mean 1. Excessive use of plant protection (pesticides, herbicides etc.) 2. Excessive water consumption 3. Wrong policy incentives 4. Excessive use of nitrogen fertilizers 5. Weak support services (extension, technical assistance, credit) 6. Lack of technical knowledge and skills 7. Monoculture practices 8. Frequent tilling 9. International trade competition 10. Rural poverty 11. Increasing rural population 12. Low degree of innovation 13. Loss of traditions in farming Scores: 1, not a significant contributor at all; 2, not a contributor; 3, moderate significant contributor.

Std. dev.

3.70 0.65 3.31 0.69 3.28 0.64 3.26 0.62 3.10 0.72 3.05 0.76 2.97 0.69 2.92 0.60 2.82 0.69 2.78 0.80 2.74 0.72 2.56 0.75 2.55 0.69 contributor; 4, highly

How Sustainable is Agriculture in Turkey? Part III of the questionnaire directly asked the question: ―overall, how sustainable do you consider agriculture in Turkey, on a scale from 1 (not sustainable at all) to 4 (highly sustainable)?‖. Figure II shows how the respondents assessed the overall sustainability of agriculture on a total aggregated level (total average) and differentiated by institutional group (e.g. government institutions, domestic and international NGOs, private sector associations etc). The stakeholders‘ assessment of sustainability in Turkish agriculture was consistently

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low across the institutional groups, scoring ―unsustainable‖ (1.95) on average. While the results show no major difference in perception between the groups, the respondents who represented international NGOs and political parties (in opposition) argued relatively more strongly that Turkish agriculture is not ―sustainable‖.

Sustainable

4

3.5

3

Not sustainable

2.5

2

University and Research

Private Government International Sector NGOs Associations

Political Parties

Media

Domestic NGOs

1.5

1

Scores: 1, not sustainable at all; 2, non-sustainable; 3, moderately sustainable; 4, highly sustainable Figure II. How sustainable do you consider agriculture in Turkey?

Assessment of Statements Related to Sustainable Agriculture The questionnaire then moved to more qualified statements that referred to different views of sustainability in agriculture. Part III of the questionnaire consisted of statements (the exact wording of sample statements can be found in Annex A) that had to be judged in a scale from 1 (I strongly disagree) to 4 (I strongly agree). These statements tended to implicitly favor different viewpoints on particular issues such as the ―multifunctionality‖ of agriculture, the ―precautionary principle‖ and the impact of international trade on sustainability in agriculture. Similarly, Part IV involved qualified statements dealing with the future of ―sustainable‖ agriculture, where the respondents indicated their expectations and predictions. The objective was partly to investigate how stakeholders react to potential trade-offs and conflicting policy goals in achieving what they perceive to be ―sustainable‖ agriculture. Under thematic headings, the section below analyses the results.

Farm Supply Structure As is mentioned above, there was consensus among the respondents that farm sizes were too small in Turkey. This perception resonated across the sections of the questionnaire. On a more explicit question in Part IV, the respondents moderately agreed that ―in crop production, while the share of small scale farms (smaller than 2 ha) decreases, the share of larger scale farms (20ha) should grow‖ (mean value, 2.77). However, they disagreed with the statement that ―instead of relatively high share of staple crops such as rice, wheat and barley in cropping patterns, the share of high-value crops such as oilseeds, fruits and vegetables should increase‖ (mean value, 2.47). They expressed a similar opinion on a transition from crop production to livestock production (mean value, 2.51). As such, respondents across different stakeholder groups were concerned about the existing allocation of land resources and the predominance

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of small farms. However, they did not argue for the process of transition from small-scale, primary crop production to larger scale and higher added-value production in agriculture. They seemed to subscribe to the idea of ―small is beautiful‖.

Economic Development vs. Environmental Sustainability The respondents were also concerned about environmental problems in Turkish agriculture, yet they only acknowledged the potential conflicts between growing intensity of agricultural production and the environment when they explicitly faced a trade-off. As described above, they were very concerned about ―global warming‖, ―water pollution‖, and ―land degradation (including soil erosion)‖. They also saw the pressure that agricultural production places on natural resources—as they identified ―excessive use of plant protection (pesticide, herbicides etc.)‖ and ―excessive water consumption‖, and ―excessive use of nitrogen fertilizers‖ as ―highly significant contributors‖ to these problems. This indicates that the respondents were aware of a trade-off between the increasing intensity of agricultural production and protecting natural resources. However, when they were asked if ―in the next 10 years, instead of considering agriculture to be a problem of economic development,… it should be considered as a problem of environment‖, most of the stakeholders did not agree (mean value: 2.58), except for the domestic NGOs (mean value: 2.93). In particular, government representatives (mean value: 2.0) disagreed with the statement, implying that for them economic development was more important than protecting the environment. Trade Liberalization and “Multifunctionality” The survey also investigated stakeholders‘ perceptions about the relationship between international trade in agriculture and sustainability. In Part II, the respondents identified international trade competition as a moderately significant contributor to environmental problems (mean value, 2.82). Similarly, in response to a more qualified statement, they strongly agreed that ―free trade of agriculture will force farmers to neglect sustainability at the expense of competitiveness‖ (mean value, 3.16). However, when asked about the potential economic benefits of trade liberalization, they supported the statement that ―from trade liberalization through negotiations in the World Trade Organization (WTO), Turkey... should benefit‖ (mean value: 2.79). In particular, respondents from academic institutions and representatives of political parties subscribed to this view (mean values, 3.20 and 3 respectively). Hence, albeit perceiving that trade openness would harm the environment, the stakeholders still rated the related potential economic benefits highly. The statement that achieved the greatest consent in Part III is that ―the farmer does not just produce food but provides many public services that ensure the ecological, cultural and social sustainability of a society‖ (mean value: 3.48). This statement epitomized the concept of multifunctionality of agriculture. All stakeholders seemed to attribute some additional value to what agriculture entails as an economic activity. However, this perception seemed to weaken if respondents were presented with a potential trade-off between economic and environmental priorities. As described above, when they were presented with an explicit choice, the majority of the respondents opted for supporting economic objectives. The cultural dimension of ―multifunctionality‖ was not valued highly either—as the respondents did not consider ―loss of traditions in farming‖ as a significant problem.

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Perceptions Towards Biotechnology and the Precautionary Principle As for the role of new technologies in sustainability in agriculture, the respondents agreed most with the statement that ―the application of the Precautionary Principle ensures sustainable agriculture by preventing the spread of potentially risky new agricultural technologies.‖ (Mean value: 2.94.) However, the responses to more qualified statements, particularly on genetically modified organisms (GMOs), revealed more about their perception of new technologies in agriculture. In Part IV, where they were asked to express their opinion on a statement that ―in the next 10 years, since the negative impact of genetically modified (GM) agricultural varieties on environment and human health will become more certain, their commercial use… should be banned‖, they strongly agreed (mean value: 3.32). In particular, domestic NGOs supported banning GMOs even more strongly (mean value: 3.6). On a follow up question with a contradictory statement, ―in the next 10 years, since the negative perception of consumers on genetically modified agricultural (GM) varieties will weaken, the consumption of new GM varieties with enhanced productivity and nutrition value… should increase‖, the respondents strongly disagreed (mean value: 1.66). The endorsement of the Precautionary Principle and the apparent skepticism towards GMOs (largely driven by NGOs) seems to indicate an inherently unfavorable attitude towards the new applications of biotechnology in agriculture. The respondents, across different stakeholder groups, supported an outright ban on transgenics. However, they did not perceive ―low degree of innovation‖ as a significant problem in Turkish agriculture.

Policy Solutions The questionnaire also asked the respondents to express their opinion on the potential role of various policy alternatives, technology tools and farm practices in improving sustainability in Turkish agriculture. In Part III, the respondents were asked to judge nine practices on a scale from 1 (not appropriate at all) to 4 (highly appropriate). The spiderweb in Figure III shows the average assessments made by the respondents. Each angle represents a different tool/practice and the stakeholders‘ ratings are reflected by the relative position on the concentric rating scale (average ratings above 2.5 represent a perceived appropriateness). The figure shows that the respondents rated ―organic agriculture‖, ―precision farming‖, ―integrated pest management‖, ―labeling eco-friendly agriculture‖, and ―taxing environmental pollution‖, as ―highly appropriate‖ tools in addressing environmental problems in agriculture. However ―direct payments‖, and ―devolution of power to local governments‖ were considered relatively less appropriate. Similarly, the respondents did not endorse ―genetic engineering‖ as an appropriate tool in general. However, private sector associations slightly favored it (mean value 2.75) whereas international NGOs opposed it strongly (mean value 1.50). Taxing pollution was considered to be a highly appropriate tool (mean value 3.15) in general. Yet government participants were not as supportive (mean value 2.5) as private sector associations (mean value 3.25).

Defined in the questionnaire as ―the Precautionary Principle‖ (PP) is considered to be a tool in risk management. The PP entails that in the face of scientific uncertainty, societies should take no or low risk measures.

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Organic agriculture 4 Devolution of power to local governments

Precision farming 3 2

Labelling eco-friendly agriculture

Integrated pest management 1

Direct payments

Taxing environmental pollution

Agricultural biotechnology

Genetic engineering

Figure III. The assessed impact of nine different practices on sustainability in agriculture.

Market Mechanisms and the Private Sector The respondents tended to argue for a strong role for the government in the agricultural economy. Except for the representatives of the government, the respondents across different stakeholder groups disagreed with the statement that ―while external intervention to agricultural prices is reduced, agricultural prices…should be set by market mechanisms‖ (mean value, 2.35). In particular, representatives from the legislature (political parties) expressed strong opposition which reflects their approval of the long-established political practice of offering government support to farmers (usually in exchange for political support from the rural electorate). Similarly, when the respondents were presented with an opportunity to choose between government support in the form of price subsidies and provisions of public goods, the majority of participants largely disagreed with the statement: ―instead of existing price support policies, limited government resources should be prioritized towards investment in education, social security and physical infrastructure in rural areas.‖ This reveals that Turkish stakeholders perceive the government not as a provider of basic services, but as a dominant actor intervening in and regulating markets, even at the expense of providing public goods and services. However, participants also had some pro-private sector views. They supported a stronger intellectual property regime—as they endorsed the statement that ―because of increasing investment of the private sector in the research and development of new varieties, the strength of intellectual property rights…should increase‖ (mean value, 3.05). This pro-private sector approach was also consistent with their response on the impact of the private sector-driven activities related to sustainability. Across different groups, the respondents disagreed with the statement that ―the private sector undermines efforts to achieve sustainability in agriculture‖ (mean value, 2.14). They also supported some other market-oriented solutions to address environmental problems. They strongly supported the statement that ―educating consumers will help change their behavior and ultimately send signals to farmers to adopt more environmentally friendly farming practices‖ (mean value, 3.28). Except for political parties, respondents thought that the scale of contract farming between large scale retailers and farmers and farmers associations should increase. Bottom-up Approach When asked about institutional and political aspects of sustainability, the respondents agreed strongly with the statement that ―sustainable agriculture requires a bottom-up

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approach,‖ (mean value 3.48). Similarly, they supported a slightly different but more explicit formulation of what a bottom-up approach would entail, i.e. ―decentralization of power to local governments,‖ as a slightly appropriate tool to address sustainability (mean value, 2.8).

Perception Pattern Analysis The perception analysis of the data consists of a cluster analysis and a biplot illustration, identifying different perception groups across the stakeholder groups. The objective of this exercise is twofold. On the one hand, it can identify groups, beyond participants‘ stakeholder affiliation, which have largely similar perceptions. On the other hand, it would also highlight certain issues leading to divergence of opinion among the clusters identified. For this purpose, a cluster analysis using Ward's linkage method was used to identify major perception groups. Across the four parts of the questionnaire, 10 variables addressing the challenges mentioned above were tested. Then with the objective of showing the patterns of divergence and convergence in the perceptions of different cluster groups, the results were illustrated using biplot visualization which portrays the 10 variables as vectors in a two-dimensional space where the positions of stakeholders are located in relation to the vectors.

Perception Groups in Turkey The Cluster Analysis identified three major perception groups in Turkey. The first perception group (Cluster 1) consisted of 16 observations (see Table IV). It contained two university and research institutions (A), one private sector association (B), six government institutions (G), one legislature (LG), one media participant and five domestic NGOs (NG). The second perception group (Cluster 2) consisted of 18 observations: three university and research institutions (A), three private sector associations (B), three legislature participants (LG) and six domestic NGOs (NG). There was only one government participant in this cluster. Finally, Cluster 3 contained six observations. This group contained only NGOs, one domestic and five international. The composition of the clusters implied that while Cluster 1 was dominated by government representatives, Cluster 3 exclusively reflected NGO perceptions. Cluster 2, on the other hand, had a mixed composition with relatively high shares of research institutes, business associations and political parties (legislature). Table IV. The number of observations in each cluster in total and by stakeholder group.

Cluster 1 Cluster 2 Cluster 3

A 2 3 0

B 1 3 0

G 6 1 0

IN 0 1 1

LG 1 3 0

M 1 1 0

NG 5 6 5

Total 16 18 6

A, university and research institutions; B, private sector association; G, government institutions; IN, international NGOs; LG, legislature (political parties); M, media, NG, national NGOs.

Missing values were replaced with variable means in order to obtain a complete cluster analysis. However, this estimation method weakens the precision of the clusters.

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As is illustrated in Figure IV, clusters are scattered around the 10 variables, shown as vectors. The length of the vectors indicates their variability, while the cluster observations are indicated as points. In two-dimensional space, the relative score of an observation on a particular variable (vector) is measured by calculating the length of its projection onto that vector. If an observation scores above average for that particular variable, it would be located on the positive side of the vector (indicated by its arrow). By the same token, if the score for an observation is below average, it would be on the negative side of the vector. The scatter composition of observations illustrates that there were substantial variations among clusters in terms of how they are located vis-à-vis the variables. The only exception was the variable ―global warming‖ on which—as its relatively shorter length indicates—there was a consensus among clusters that it is a major threat to sustainability in Turkish agriculture. As expected, one of the most divisive issues was the clusters‘ perceptions on the trade-off between economic growth and environmental protection. While Cluster 1, dominated by government institutions, clearly prioritized economic development, Cluster 3, with strong representation from domestic NGOs, prioritized the environment. As is shown in the figure, dots marked 1 (indicating Cluster 1) are located on the negative side of the vector ―environ-over-economy‖, while dots marked 3 (indicating Cluster 3) are on the positive side. Secondly, the question of agricultural transition was divisive. The majority of Cluster 1, with strong government representation, and Cluster 2, including the majority of private sector associations—argued for a transition of small towards higher scale/value activities in agriculture as well as a labor transition out of the agriculture sector. However, Cluster 3 (mainly domestic and international NGOs) opposed it, implying that, in their view, smallscale agriculture is persistent. Thirdly, the clusters had different perceptions of the impact of liberalized trade on sustainability. Although Cluster 3 and some members of Cluster 2 perceived that trade competition would undermine sustainability, Cluster 1 and the majority of Cluster 2 were more pro-trade—as they argue that Turkey should benefit from liberalized trade through the WTO.

1.5

Biplot marketprice farmsizelarger

1

gmoban directpayments

.5 0

-.5

1

1 3 3 3 2 globalwarming 2 3

environoverecon

3 taxingpollution 3 2 freetradeenviron

1

1 2 sustainable 1 2 1 2 2 22 2 1 12 1 11

labortransition

1 21 1

1 2 2

2

2

-1.5

-1

Dimension 2

1 2

-1.5

-1

-.5 0 .5 Dimension 1 Variables

1

Observations

Figure IV. Biplot illustrating stakeholders‘ perceptions by clusters.

1.5

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CONCLUSION For decades, the primary objective of Turkish agricultural policies has been to promote economic growth, albeit failing markedly in recent years, as discussed in other chapters of this book. In this context, social and environmental concerns have always been treated, if at all, as issues of secondary importance and only to the extent that they were related to economic objectives. Similarly, the structural adjustment programs—either the ―Washington consensus‖ or the ―post-Washington consensus‖ variants—did not address environmental concerns. The policies they promoted did not extend beyond narrow economic goals. However, such a unidimensional approach to policy-making appears increasingly inadequate in dealing with new challenges facing Turkish agriculture—such as increasing frequency and duration of droughts, falling ground water levels, desertification and climate change−requiring long term adaptation strategies (see Chapter 8 by Saysel). Even the economic dimension of agricultural policies is failing to cope with turbulent market circumstances. The ―food crisis‖ of 2007–2008 is a case in point. The subsidy and trade protection policies traditionally designed to protect farmers exacerbate the vulnerability of consumers—especially the urban poor who spend the bulk of their disposable income on food products. Moreover, as is discussed in Chapter 2 by Keyder and Yenal, the composition of households in rural areas have been changing—as the number of rural households engaged in non-agricultural activities is growing rapidly. This implies that even in rural areas the share of net-food buyer households is increasing, which challenges the assumption that rural households are all producers of agricultural commodities. As such, under new international market circumstances, the economic dimension of agricultural policies needs to be reformed to take into account the interests of urban and rural consumers facing growing pressure due to long term increases in prices and market volatilities. The concept of sustainability could be used as a framework offering the necessary multidimensionality in policy making; however, the questions of how to define sustainability and how to set policy priorities are contentious. This chapter has discussed the results of a stakeholder perception survey, examining how different groups of stakeholders define sustainability and how they set or shift priorities when they face policy trade-offs. The results of the survey show that although the vast majority of stakeholders think that agriculture is not sustainable, there are marked variations between them regarding their priorities for different dimensions of sustainability. There is a general convergence of opinion among stakeholders about the deterioration of environmental conditions such as climate change, water pollution and land degradation. They also acknowledge the potential conflicts between growing intensity of agricultural production and the environment. However, while participants from domestic NGOs indicate that in the long run they would prioritize protection of the environment, government representatives and private sector associations prioritize economic development. Given the tradition of top-down decision making, leaving little room for effective civil society engagement, governments have been pursuing policies with such an economic bias. Shifting priorities so as to include other concerns, such as environmental protection, would require adopting a more bottom-up approach to decision making. The survey illustrates that stakeholders are extremely conservative about the role of biotechnology, particularly transgenics, in agriculture. They embrace the application of the

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Precautionary Principle in order to ensure that the spread of potentially risky new agricultural technologies is prevented. Moreover, they strongly argue for banning GMOs altogether. This is an issue on which respondents across different stakeholder groups, including NGOs, government representatives and research institutions, converge in opinion. This prevailing perception reflects, or otherwise reinforces, the lack of government willingness to invest in new technologies as described in Chapter 12 by Aerni, an in Chapter 13 by Karapinar and Temmerman in this book. Stakeholders generally embrace the nostalgic view of ―small is beautiful‖ regarding the structure of Turkish agriculture dominated by small farms. Except for respondents from private sector associations, who argue strongly for a transition from small-scale to large scale farming, stakeholders generally perceive that small farms should be supported to enable them to persist. They also do not favor a transition in crop patterns from relatively high share of staple crops to secondary high-value products. This implies that stakeholders perceive food security as an objective that should be achieved through self-sufficiency in primary commodities through small-scale production. As such, the policy perception prevailing in this survey supports the existing structure in Turkish agriculture, and the political will for structural transformation is relatively weak. The results of the survey also show that stakeholders support a stronger role for the state in the agricultural sector. Ironically, except for the representatives of the government, the respondents across different stakeholder groups argue for heavy market regulation and government intervention in the form of subsidies and price protection. In particular, representatives from the legislature (political parties) express a strong opinion on this matter. Even a more moderate definition of the role of the government, as a provider of public goods rather than as a market player was not embraced by respondents. Stakeholders seem to perceive that Turkey‘s long engagement with structural adjustment policies in general, and ARIP in particular, has weakened the traditional role of the state in the sector.

ACKNOWLEDGMENTS This research project was funded by the National Centre for Competence in Research on Trade Regulation (NCCR Trade), a research program funded by the Swiss National Science Foundation and hosted by the World Trade Institute at the University of Bern, Switzerland. I am grateful to Fikret Adaman, Gokhan Ozertan and Halis Akder for their collaboration during the early phases of the survey. Thanks also to Burcu Senturk and Omer Ak for their assistance in the field research and data entry. Finally, I would like to thank those who participated in the survey.

REFERENCES Adaman, F. (1997). The political economy of the environment in Turkey. New Perspectives on Turkey, (Fall 17), 129–150. Adaman, F., & Arsel, M. (Eds.) (2005). Environmentalism in Turkey : between democracy and development?. Aldershot: Ashgate.

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Adaman, F., & Ozertan, G. (2007). Perceptions and practices of farmers towards the salinity problem: the case of Harran Plain, Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6(4/5):, 533–551. Adem, C. (2005 ). Non-state actors and environmentalism. In F. Adaman & M. Arsel (Eds.), Environmentalism in Turkey: Between Democracy and Development?. Aldershot: Ashgate, 71–86. Aerni, P. (2009). What is sustainable agriculture? Empirical evidence of diverging views in Switzerland and New Zealand. Ecological Economics, 68(6),1872–1882. Akder, H. (2007). Policy formation in the process of implementing agricultural reform in Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6(45), 514–532. Anderson, K. (Forthcoming). Agricultural policies: past, present and prospective under Doha. In B. Karapinar & C. Haeberli (Eds.), Food Crises and the WTO. Cambridge: Cambridge University Press. Aydin, Z. (2005). The state, civil society, and environmentalism. In F. Adaman & M. Arsel (Eds.), Environmentalism in Turkey: Between Democracy and Development?. Aldershot: Ashgate. Brundtland, G. (Ed.) (1987). Our Common Future: The World Commission on Environment and Development. Oxford: Oxford University Press.. Cakmak, E. & Akder, H. (2005). DTO ve AB‘deki Gelismeler Isiginda 21. Yuzyilda Turkiye Tarimi (In the Light of Developments at the WTO and the EU Turkish Agriculture in the 21st century). Istanbul: Turkish Industrialists‘ and Businessmen‘s Association (TUSIAD). de Janvry, A., Key, N. & Sadoulet, E. (1997). Agricultural and Rural Development Policy in Latin America: New Directions and New Challenges. University of California at Berkeley: Department of Agricultural and Resource Economics Division of Agriculture and Natural Resources. Diaz-Bonilla, E. (Forthcoming). Globalisation of agriculture and food crises: Then and now. In B. Karapinar & C. Haeberli (Eds.), Food Crises and the WTO. Cambridge: Cambridge University Press. FAOSTAT (2006). Food and Agriculture Organisation of the United Nations Statistics Division FAOSTAT database. Izci, R. (2005). Non-state actors and environmentalism. In F. Adaman & M. Arsel (Eds.), Environmentalism in Turkey: Between Democracy and Development?. Aldershot: Ashgate. Jones, W., & Elasri, A. (Forthcoming). Rising food prices: causes, consequences and policy responses. In B. Karapinar & C. Haeberli (Eds.), Food Crises and the WTO. Cambridge: Cambridge University Press. Kalaycioglu, E. (2001). Turkish Democracy: Patronage versus Governance. Journal of Turkish Studies 2(1). Karapinar, B., & Haeberli, C. (Eds.) (Forthcoming). Food Crises and the WTO, Cambridge: Cambridge University Press. Keskin, S. (2001). Gateway to land and water information: Country report Turkey. Rome: Food and Agriculture Organization of the United Nations. OECD (2008). OECD Environmental Performance Reviews: Turkey 2008.Paris: OECD Publishing.

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Ozden, M., Dursun, H., & Sevinc, A.N. (2000). The land resources of Turkey and activities of general directorate of rural services. International Symposium on Desertification. Konya, Turkey. Reardon, T. (1998). African Agriculture: Productivity and Sustainability Issues. In C. K. Eicher and J. M. Staatz (Eds.), International Agricultural Development. Baltimore, MD: Johns Hopkins University Press. Ruttan, V. W. (1998). Constraints on the design of sustainable systems of agricultural production. In C. K. Eicher & J. M. Staatz (Eds.), International Agricultural Development. Baltimore, MdD: Johns Hopkins University Press.. Schmidhuber, J., & Matuschke, I. (Forthcoming). Shift and swing factors and the special role of weather and climate. In B. Karapinar & C. Haeberli (Eds.), Food Crises and the WTO. Cambridge: Cambridge University Press. State Planning Organisation (2009). Main Economic Indicators, available at (accessed in January 2009). Turkes, M. (1999). Vulnerability of Turkey to desertification with respect to precipitation and aridity conditions. Turkish Journal of Engineering and Environmental Science 23: 363– 380. Vilchez, I. M. (2005). Environment and agriculture. In A. M. Burrell & A. J. Oskam (Eds.), Turkey and the European Union: Implications for Agriculture, Food and Structural Policy. Cambridge MA: CABI Publishing. World Bank. (2005). Turkey Joint Poverty Assessment Report, World Bank. Volume 1: Main Report. Washington, DC: World Bank

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ANNEXES Annex A. Sample Questionnaire Part I—General State of Agriculture The following section will give us an idea of your assessment of the general state of agriculture in Turkey? Please indicate your assessment on a scale from 1 to 4. 1: very high 2: moderately high 3: low 4: very low 5: don‘t know • Q.1. The level of educational attainment amongst farmers: 1----------2-----------3------------4 • Part II—Environment Section 2.1 In your opinion, how serious is each of the following environmental challenges in your country? Please indicate the extent of the problem on a scale from 1 to 4. 1: not serious at all 2: not serious 3: moderately serious 4: very serious 5: don‘t know• Q.2.1.1. Damage to biodiversity

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Section 2.2 Please assess each of the following factors as to whether they are significant in contributing to the worsening of the environmental challenges above? 1: not a contributor at all 2: not significant 3: significant 4: highly significant contributor 5: don‘t know• Q.2.2.1 High use of nitrogen fertilizer

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Part III—Sustainable Agriculture The following section will give us an idea of your assessment of sustainable agriculture. Section 3.1 Which of the following approaches is appropriate in addressing these challenges? 1: Not appropriate at all 2: Not appropriate 3: Appropriate 4: Highly appropriate 5: don‘t know• Q.3.1.1 Organic agriculture: 1----------2-----------3------------4

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Section 3.3 In this section we would like to know your opinion regarding certain statements that refer to the perception of sustainable agriculture. Please indicate the extent of your agreement or disagreement on a scale from 1 to 4. 1: I strongly disagree 2: I disagree 3: I moderately agree 4: I strongly agree 5: don‘t know •

Q.3.3.1 Sustainable agriculture requires a bottom-up approach: 1----------2-----------3------------4

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Part IV—The Future of Turkish Agriculture In this section of the survey, we would like to know your (a) expectations and (b) predictions regarding the future of the agricultural sector in your country. Please indicate your (a) expectations (b) predictions based on the following statements: 1: I strongly disagree 2: I disagree 3: I moderately agree 4: I strongly agree 5: don‘t know •

Q. 4.5 In the next 10 years, instead of considering agriculture to be a problem of economic development, it a) should become a problem of environment and sustainability: 1----------2-----------3------------4

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Annex B. List of Stakeholders Participating in the Survey. IDNUM 1001 1002 1003 1004 1005 2001 2002 2003 2004 3001 3002 3003 3004 3005 3006 3007 5001 5002 6001 6002 6003 6004 7001 7002 8001 8002 8003 8004 8005 8006 8007 8008 8009 8010 8011 8012 8013 8014 8015 8016

IDNAM A1 A2 A3 A4 A5 B1 B2 B3 B4 G1 G2 G3 G4 G5 G6 G7 IN1 IN2 LG1 LG2 LG3 LG4 M1 M2 N1 N2 N3 N4 N5 N6 N7 N8 N9 N10 N11 N12 N13 N14 N15 N16

Name of the Organization TÜRKİYE BiLiMLER AKADEMISi TÜBİTAK DİCLE ÜNİVERSİTESİ ANKARA ÜNİVERSİTESİ ZİRAAT FAKÜLTESİ TARIM EKONOMİSİ BÖLÜMÜ KALİTE SİSTEM LABORATUVARLAR GRUBU BESD-BİR(BEYAZ ET SANAYİİCİLERİ VE DAMIZLIKÇILARI BİRLİĞİ DERNEĞİ TÜRKİYE SÜT, ET VE GIDA SANAYİCİLERİ VE ÜRETİCİLERİ BİRLİĞİ TARMAKBİR-TÜRK TARIM ALET VE MAKİNALARI İMALATÇILARI BİRLİĞİ TÜRKİYE TOHUMCULUK ENDÜSTRİSİ DERNEĞİ TARIM VE KÖYİŞLERİ BAKANLIĞI TBMM DIŞ TİCARET MÜSTEŞARLIĞI ÇEVRE VE ORMAN BAKANLIĞI DSİ GENEL MÜDÜRLÜĞÜ TOPRAK MAHSÜLLERİ OFİSİ GENEL MÜDÜRLÜĞÜ DEVLET PLANLAMA TEŞKİLATI MÜSTEŞARLIĞI GREENPEACE DOĞAL HAYATI KORUMA VAKFI (WWF-TÜRKİYE) CHP ANAP DSP DYP MİLLİYET GAZETESİ CNN TURK TÜRKİYE ÇEVRE VAKFI TÜRKİYE SULAMA BİRLİĞİ KOOPERATİFİ MERKEZ BİRLİĞİ GENEL MÜDÜRLÜĞÜ TÜKETİCİ HAKLARI DERNEĞİ TÜRK VETERİNER HEKİMLERİ BİRLİĞİ SU ÜRÜNLERİ KOOPERATİFLERİ MERKEZ BİRLİĞİ S.S KÖY KALKINMA VE DİĞ. TAR. AMAÇLI KOOPERATİFLER BİRLİĞİ TMMOB ZİRAAT MÜHENDİSLERİ ODASI TÜRKİYE TARIM KOOPERATİFLERİ MERKEZ BİRLİĞİ OR-KOOP,TÜRKİYE ORMANCILIK KOOPERATİFLERİ MERKEZ BİRLİĞİ TARIM İŞ SENDİKASI TÜRKİYE ZİRAAT ODALARI BİRLİĞİ BUĞDAY DERNEĞİ TMMOB GIDA MÜHENDİSLERİ ODASI DOĞAL HAYATI KORUMA DERNEĞİ TÜRKİYE TEKNOLOJİ GELİŞTİRME VAKFI TEMA

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 11

LEGAL–INSTITUTIONAL FRAMEWORK AND AGROBIODIVERSITY CONSERVATION IN TURKEY Zuhre Aksoy Department of Political Science and International Relations, Bogazici University, Turkey

ABSTRACT Conservation of agrobiodiversity in Turkey is of great significance for the future of its crop genetic resources. On-farm conservation has been a crucial mechanism for the preservation of these resources and the broader agroecosystem. This form of conservation relies largely on farmers‘ choices as to which crops and varieties they plant, and their access to seeds. In this context, this chapter will focus on the link between processes of agrobiodiversity conservation and the legal–institutional framework in Turkey that provides the scope of action. The chapter examines the debates surrounding the Law On the Protection of Breeders‘ Rights for New Plant Varieties (Law No. 5042, 2004), and the recent Seed Law (Law No. 5553, 2006) for the regulation of seeds, in which the main stated objectives are to improve the quality of plant production and to restructure the seed sector, reflecting a move towards privatization. In light of the debates on intellectual property rights over crop plants and the concept of farmers‘ rights, the chapter also evaluates the potential implications of the new legal–institutional framework on farming practices in relation to agrobiodiversity and the cultivation of traditional seed varieties. The chapter argues that privatization of the management of genetic resources stands in sharp contradiction to the very nature of crop genetic resources and the conservation practices of farmers.

INTRODUCTION The international recognition of the threats to biological diversity and the increasing economic benefits from the exploitation of genetic resources through advances in biological technologies have made the conservation and management of these resources an object of

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political contention. Landraces , or traditional varieties, cultivated by farmers for generations, provide the most significant component of the world‘s crop genetic resources. As landraces form the basis of modern crops (Brush, 1998), their cultivation at the local level has global implications. Boyce (2006:86) states that ―The centers of origin of the world‘s crops are concentrated in a few places known as ‗Vavilov Centers‘ after the great Russian botanist of the early 20th century, Nikolai Vavilov,‖ most of which are located in the ―developing countries of the global South.‖ Turkey is located on two Vavilov centers of origin, the Near East and the Mediterranean. Hence, conservation of agrobiodiversity in Turkey, a center of origin and diversity of several crops, including wheat and barley, is of great significance for the future of crop genetic resources. Pointing to the richness of wheat varieties in Turkey, Karagoz and Zencirci (2005:775) note that ―Turkish wheat landraces have been largely utilized to breed new varieties through mass selection.‖ For example, in the State of the World‘s Plant Genetic Resources for Food and Agriculture (FAO, 1997:28), it is stated that: One Turkish wheat landrace was found to carry genes for resistance and tolerance to various rusts, smuts and other fungal pathogens. It was used as a source of resistance genes and is a parent of many of the wheat cultivars now grown in the northwestern United States. On-farm conservation has been a crucial mechanism for the preservation of these resources as well as the broader agro-ecosystem (Brush, 2004), and this form of conservation relies largely on the farmers‘ choices of which crops and varieties to plant in centers of diversity. This chapter will focus on the link between the processes of agrobiodiversity conservation and the legal–institutional framework in Turkey that provides the scope of action by the related parties. The discussions about the role of intellectual property over crop plants include arguments proposing that intellectual property rights (IPR) are important for ensuring the flow of new crop varieties developed by plant breeders, and the counter argument suggesting that intellectual property provides a challenge for the sustainability of the livelihoods of the poor as it restricts access to seeds (Brush, 2004) (see also Chapter 13 by Karapinar and Temmerman). In the Turkish context, the chapter will examine the debates surrounding the Law On the Protection of Breeders‘ Rights for New Plant Varieties (Law No. 5042), and the recent Seed Law (Law No. 5553) for the regulation of seeds. In the latter, the main objective has been stated as improving the quality of plant production and to restructure the seed sector, which reflects a move towards privatization by instituting intellectual property rights. As the chapter aims to show, seed laws and intellectual property rights are inextricably linked to each other, since regulations about production and marketing and plant variety protection and patents intertwine, with crucial implications for farmers in centers of diversity. In light of the debates on intellectual property over crop plants and the concept of farmers‘ rights, the chapter will evaluate the potential implications of the new legal– institutional framework in Turkey on practices of farmers who conserve agrobiodiversity through the cultivation of traditional varieties of seeds in the future. The chapter will argue Landraces are ―genetically variable populations that respond differently to different soil conditions, levels of moisture, temperature, sunlight, diseases and pests, microclimates.‖ (Scott, 1998:265). From here on, ―landraces‖ and ―traditional varieties‖ will be used as interchangeable terms.

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that privatization of the management of genetic resources stand in sharp contradiction to the very nature of crop genetic resources and the conservation practices of farmers. The first section of the chapter focuses on the debate about intellectual property rights and crop genetic resources, followed by a discussion of the concept of ―farmers‘ rights,‖ envisaging the recognition of the contributions of farmers to the conservation and management of crop genetic resources. Farmers‘ rights have occupied a significant space in the international realm as an alternative to plant breeders‘ rights, a form of intellectual property rights. Following this section, the chapter will proceed with a discussion of the recent agricultural restructuring in Turkey and the related legal–institutional changes with regard to the seed sector. The chapter will conclude with a discussion of the likely implications of the recent changes in the regulation of seeds in Turkey on the conservation of agricultural biodiversity in light of the arguments about crop genetic resources and intellectual property rights.

Genetic Resources and Property Rights A crucial characteristic of crop genetic resources, Brush argues, is that they are ―the result of collective action over many generations of crops and farming people: shared knowledge, seed exchange, and the accumulation of valuable traits in crop populations‖ (Brush, 2007:1499). Srinivasan (2003:420) underlines that, until recently, ―plant genetic resources, including farmers‘ traditional varieties, were regarded as a public good to be freely exchanged both within and between farming communities and institutional plant breeders.‖ In this context, crop genetic resources were considered to be the common heritage of humankind. With advances in biological technologies, this principle, however, came under increasing challenge with a move towards privatization, which was mainly pushed by the private sector arguing that incentives for innovation and secure returns for their investment in research and development could only be achieved via strong intellectual property rights (Zerbe, 2007). The legal framework for this idea included the International Union for the Protection of New Varieties of Plants (UPOV) Convention, first adopted in 1961 and revised several times in order to reinforce the rights of plant breeders and to narrow the exemptions (Cullet and Raja, 2004). The UPOV Convention provided protection to varieties of plants that met the conditions of novelty, distinctness, uniformity and stability, and at the same time included a farmers‘ exemption, which allowed ―any farmer who purchased seeds of a protected variety to save seeds from those crops for subsequent replanting without paying additional royalties‖ (Aoki and Luvai, 2007:45). However, in the 1991 revisions UPOV made the farmers‘ exemption optional, and if a member state did choose to provide the exemption, it had to ensure that the exemption did not jeopardize the rights of plant breeders (Aoki and Luvai, 2007). In the context of biodiversity management, Cullet and Raja (2004:100) argue that while the UPOV Convention instituted a regime with far-reaching implications for the governance of agrobiodiversity, it ―does not acknowledge the links between the intellectual property rights Cullet and Raja (2004:100) define plant breeders‘ rights as ―a hybrid form of intellectual property rights, which give the seed industry similar incentives to those offered by patents, without establishing a complete monopoly.‖

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regime it sets up, and environmental management.‖ In addition to the UPOV Convention, the Agreement on Trade Related Intellectual Property Rights (TRIPs) of the World Trade Organization (WTO) in 1994 strengthened the system of private property in plant genetic resources. On the other hand, as Rosendal points out, for the protection of traditional knowledge in relation to genetic resources, no corresponding mechanism exists: ―The knowledge in its traditional form and the nonsystematically bred cultivars hardly fulfill general patent criteria.‖ (Rosendal, 2006:438). Parallel to this point, Brush (1996:10) states that: Farmers and herbalists lack means of obtaining intellectual property protection over their innovations because of the wide distribution of genetic resources, the existence of public collections with large amounts of germplasm, and ambiguity about the source, uniformity, and novelty of resources in fields and forests. This asymmetry in the treatment of farmers‘ varieties and modern varieties,+ which were increasingly protected by plant breeders‘ rights, led to intense debates in the international realm about the status of these resources. Consequently, the common heritage system changed as the Convention on Biological Diversity (CBD), opened to signature at the United Nations Conference on Environment and Development in 1992, recognized the sovereign rights of states over genetic resources within their territories, and this change, according to Brush, was ―seeded in the creation of intellectual property over plants‖ (Brush, 2004:225). In this context, a discussion of the concept of farmers‘ rights, which in essence was about the recognition of the contributions that farmers in centers of diversity made to humankind by maintaining crop genetic resources, was essential. Farmers‘ rights at the same time became a significant ground to counterbalance the strengthening of plant breeders‘ rights in the international arena. The following section provides a review of the debates about the meaning of farmers‘ rights and their implementation.

Debates on Farmers’ Rights Since the 1980s the Food and Agriculture Organization of the United Nations (FAO) has provided a significant venue for the discussions about access to and control over plant genetic resources. In this context, one important international mechanism that needs to be considered is the International Undertaking (IU) on Plant Genetic Resources adopted by the FAO in 1983. Legally unbinding, one contentious statement of the IU was the definition of all plant genetic resources as the heritage of humankind, including breeders‘ lines. The FAO Commission on Plant Genetic Resources reinforced the concept of the heritage of humankind in 1989, with the concept of farmers‘ rights defined as ―rights arising from the past, present,

The TRIPs Agreement requires member countries of the WTO to have a national system of plant patenting or plant variety protection.

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and future contributions of farmers in conserving, improving, and making available plant genetic resources, particularly those in centers of origin/diversity‖ (FAO, 1997; Brush, 2004). However, with the advent of the CBD changing the principle of common heritage, the FAO‘s International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA) entered into force in 2004, establishing a multilateral system for access and benefit sharing, applying to 36 crops and 29 forages (FAO, 2001). One of the major reasons for the revision of the IU was to harmonize its provisions on access with the CBD principles. In accordance with the CBD, ITPGRFA recognizes the sovereign rights of states over their genetic resources. In relation to farmers‘ rights, Article 9.1 of ITPGRFA recognizes the enormous contribution that the local and indigenous communities and farmers of all regions of the world, particularly those in centers of origin and crop diversity, have made and will continue to make for the conservation and development of plant genetic resources which constitute the basis of food and agriculture production throughout the world. (FAO, 2001) Article 9.2 gives governments the responsibility for implementing farmers‘ rights, which (in accordance with their needs and priorities, and as appropriate and subject to national legislation) include the protection of traditional knowledge, and the right to participate equitably in benefit sharing and in national decision making about plant genetic resources. This is a much weakened version of the original proposal for farmers‘ rights (McGraw, 2002), and it is not clear how governments will provide this responsibility. Indeed, Zerbe (2007:102) underlines that several NGOs had endorsed farmers‘ rights as a ―broad set of rights that incorporated traditional practices of saving and exchanging seed (the so-called ‗farmers‘ privilege‘) as well as a broader set of rights that addressed socio-economic equality and development.‖ Yet, for many of these NGOs, the resulting ITPGRFA does not reflect these demands, and cannot provide a genuine challenge to the existing global regimes, which work to the detriment of small farmers (Zerbe, 2007). One problem regarding the implementation of farmers‘ rights is evident if we take into account the nature of crop resources and try to determine the titleholders. For example, Brush (2007:1508–1509) notes that: Inter-community exchange and seed flows expose claims by one community for rights to a specific crop resource to challenges from other communities … Transaction costs to settle such disputes may be higher than the value of the right, and arbitrary allocation presents ethical problems of favoring one community over others. Borowiak (2004:529) similarly underlines that, in contrast to conventional property rights, in the context of farmers‘ rights ―It is unclear what the subject matter of the rights are,

+ One major goal in breeding modern varieties is high yields. Complementing this, modern varieties are developed with characteristics such as pest resistance, disease resistance, and tolerance to herbicides.

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who holds the rights, what particular actions are being demanded of whom, and who is responsible for enforcement.‖ At the same time, as the debate on the current international framework for farmers‘ rights continues, some countries have inserted into domestic law some features of farmers‘ rights that aim to balance the impact of plant breeders‘ rights. For example, India‘s Act No. 53, 2001 for the Protection of Plant Varieties and Farmers‘ Rights recognizes farmers‘ rights in several ways, including, among other rights, farmers‘ right to save and exchange seed; to register varieties (which require that the variety is distinct, uniform and stable); to benefit sharing; and to reward and recognition through the National Gene Fund, which would be the mechanism to assist those farmers who maintain crop genetic resources (Ramanna, 2006:11– 12). Yet Cullet and Raja (2004) underline that even though these arrangements about farmers‘ rights are important, they fall short of offering farmers‘ rights a meaningful content, because they are mainly a supplement to a framework that is essentially based on UPOV, and they reduce farmers‘ rights simply to a financial compensation mechanism. Another example of farmers‘ rights can be found in the African Model Law prepared by the Organization of African Unity (OAU), which, as Zerbe (2007:111) highlights, ―adopted a position which rejected the monopolization of rights embodied in patents and (some) other forms of plant variety protection in favor of a communal system of rights which re-embedded economic relations in the larger social context.‖ Importantly, in the words of Zerbe (2007:112), the African Model Law is significant not only because it provides a basis for establishing ―farmer-as-conservationist‖ and ―farmer-as-innovator‖ in the context of farmers‘ rights; additionally, it recognizes the significance of subsistence farmers in terms of food security. These examples demonstrate that, despite their shortcomings, the ongoing debates and practices have been crucial in opening a space for struggle that aims to bring into force the rights of farmers based on the acknowledgment of their contributions and their status as protectors of genetic resources, not based exclusively on the market value of these resources, but founded on notions of rights to development, equality and justice. Any legal–institutional mechanism for the implementation of farmers‘ rights requires a comprehensive vision that will enable the provision of the substantive context for the continuation of practices that conserve genetic resources, which includes addressing major challenges that small farmers in centers of diversity face as they strive to continue agricultural production. Hence, the formation and implementation of farmers‘ rights need to rely on an overall assessment of the factors that contribute to the process of on-farm conservation of genetic resources, and the factors that work as an impediment in each particular context. An approach that views farmers‘ rights merely as an amendment of a strong intellectual property rights framework is significantly constrained to meet the essential requirements for a broader approach that incorporates the rights to development, equality, and justice. In contrast, intellectual property systems, as Gari (1999) notes, are encouraged to support the market and biotechnological value of genetic resources. Viewed in the broader context of the neoliberal agricultural restructuring supported by international financial institutions, chiefly the International Monetary Fund (IMF) and the World Bank, the parallel process of creating strong intellectual property rights regimes has become one of the major pillars for the establishment of market institutions. The relationship between market-driven agricultural production and the conservation of agricultural biodiversity is often contradictory. For example, Scott (1998:266) underlines the process by which ―Modern, industrial, scientific

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farming, which is characterized by monocropping, mechanization, hybrids, the use of fertilizers and pesticides, and capital intensiveness, has brought about a level of standardization that is without historical precedent,‖ and states that ―One of the basic sources of increasing uniformity in crops arises from the intense commercial pressures to maximize profits in a competitive mass market.‖ Yet, as the cultivation practices of farmers who conserve crop genetic resources show, in stark contradiction to uniformity and standardization, it is the creation and maintenance of diversity in the field that characterizes their production processes. However, in terms of yield and of the produce, the highly diverse traditional varieties they cultivate do not conform with the standards that markets require. In that context, for those farmers who conserve genetic resources via the cultivation of traditional varieties, it becomes harder to compete with industrial modern agriculture, with the likely implication that they will give up planting traditional varieties or they will be driven out of agricultural production (Brush, 2003). As such, in terms of crop genetic resources, ―contemporary globalizing factors that affect agriculture, such as more unified world markets, centralized breeding, large germplasm collections, and the supply of industrialized inputs have the potential to affect local production beyond previous experience‖ (Brush, 2004:262). Complementing this picture is the institutionalization of intellectual property rights such as plant variety protection, and the way they affect the use of genetic diversity in agriculture, because changes in intellectual property have important implications for the framework of seed exchange and farmers‘ access to seeds (Eyzaguirre and Dennis, 2007). For example, in their discussion of the concerns about growing corporate control over agricultural biotechnology, Baumüller and Tansey (2008:175) state that in addition to the concerns about intellectual property protection‘s push towards standardized and uniform agricultural systems, ―Restrictions on seed use from a mixture of plant variety protection, patents and seed laws threaten to force farmers into dependency on purchased seeds while driving up the price of seeds.‖ On the other hand, as Eyzaguirre and Dennis (2007:1495) underscore, intellectual property rights ―may still not offer sufficient incentives to develop markets that adequately capture the value of biodiversity, again, because of the public goods nature of many of the benefits.‖ In addition, Swanson and Göschl (2000:81) emphasize that there are three components or stages in the ―plant breeding industry‖: first, natural selection, followed by the role of traditional farmers in the protection and maintenance of genetic resources as they cultivate traditional varieties which ―encapsulate the accumulated history of the information which nature has generated that farmers have observed and used disproportionately,‖ and finally the breeding sector, which uses this information. Very importantly, for the industry itself, not only the existing information but the continued flow of information via the maintenance of genetic resources in situ is crucial (Swanson and Göschl, 2000). Yet ―Existing IPR systems create incentives to invest in R&D at the end of the industry (the plant breeding sector) but are not generating investments in the earlier parts of the industry (the genetic resource providers)‖ (Swanson and Göschl, 2000:85). Another related point that needs to be underlined is the growing dominance of the private sector in research and development (R&D) in agricultural and pharmaceutical biotechnology (Cottier and Panizzon, 2006; Baumüller and Tansey, 2008). This trend has important Eyzaguirre and Dennis (2007) also note the significance of the impact of changes in formal property rights including changes in land tenure on the system of genetic resources.

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implications, particularly for poor farmers, since private sector investments generally concentrate on areas that guarantee a secure return (Baumüller and Tansey, 2008), and ―Most commercial crop varieties are not adapted to the needs of poorer farmers who have limited or no access to irrigation, fertilizers and pesticides‖ (Esquinas-Alcazar, 2005:951). Hence public sector investment in R&D in agriculture that is particularly geared towards the needs of these farmers becomes all the more crucial (Esquinas-Alcazar, 2005). Another debate concerns the possible role public–private partnerships may play in agricultural research. Spielman and von Grebmer (2004:3) point to a growing literature about public–private partnerships as a ―constructive means of enhancing the production of goods, services and technologies that would otherwise not be produced by either sector acting alone.‖ Yet one point that is frequently underlined is that, because of the differing nature of their goals, there is a likelihood of a clash of interests between public and private sectors, as, while the private sector seeks to maximize its profits, the public sector aims at maximizing social welfare (Rausser, Simon and Ameden, 2000). For example, Rausser et al. (2000:507) note that: Agricultural research institutions are interested in advancing agricultural research and technology to serve many goals, including increasing crop productivity and ensuring food security for growing populations. Both these goals contribute to poverty alleviation. Public institutions may also seek to protect farmers‘ rights, produce and make available research (i.e. produce knowledge as a public good), protect the environment and biodiversity, and generate monetary resources. In the context of such a conflict of goals, … it may be best for the public sector to identify which objectives are vital— which areas cannot be compromised—and to leverage their bargaining position to achieve these goals. The assets held by each agent of course determine the relative bargaining position of the potential partners. (Rausser et al., 2000:507) However, in a context in which there is a trend towards significant decline in resources available for public sector R&D (see Chapter 13 by Karapinar and Temmerman), and, as mentioned above, the growing dominance of the private sector, how there can be a guarantee that public–private partnerships are not considered as an alternative to public sector research, and what weight the partnership will give to the research priorities of the public sector, are open to question. In this context, given the nature of crop genetic resources as a public good, and the rules that regulate access to seeds in farming communities, plant breeders‘ rights, as one of the mechanisms for establishing intellectual property systems regarding plant varieties, and the seed laws, with the aim of regulating the procedures and standards for variety release, seed certification, and quality control, impose significant restrictions on farmers‘ practices. Studies of the cultivation practices of farmers in centers of diversity emphasize the collective nature of the processes of conservation. For example, Brush (1996) gives examples from Peru, Mexico, and Turkey, where potato, maize, and wheat varieties are exchanged within communities and among households without consideration of ownership. However, the move

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towards privatization in the management of genetic resources is contradictory to the nature and processes of conservation of these resources. Hence, in this context of the global move towards privatization, and the liberalization in the agriculture sector, farmers‘ rights can provide a powerful framework for farmers in centers of diversity in their struggle for the recognition of their contribution to a global public good, the conservation of genetic resources, and the requirement for legal–institutional arrangements at the national level that comprehend the significance of providing farmers with a context in which to continue conserving genetic resources and sustain their livelihoods, with far-reaching implications for rural development. The following section will look at recent developments in the Turkish agricultural sector and the changes in the legal–institutional framework for the regulation of seeds, and analyze the possible implications for farming communities who conserve genetic resources.

NEOLIBERAL RESTRUCTURING IN THE AGRICULTURE SECTOR AND THE LEGAL–INSTITUTIONAL FRAMEWORK FOR SEEDS IN TURKEY The 1980s have been a significant turning point in Turkish agriculture as structural adjustment programs (SAPs) aimed to reorganize agricultural production in the context of a market-oriented economy. This liberalization process, among many other structural features, involved regulatory reforms on input industries, including the seed sector. Gisselquist, Nash and Pray (2002:242) note that reforms in the sector included the reduction of ―barriers to private varieties by cutting required performance tests to one year, allowing companies to submit data from their own tests, and establishing a practice of readily approving almost all varieties proposed for registration‖ as well as ―allowing even commercial seed imports (albeit with some difficulties) for essentially all crops.‖ In 2007 the production and distribution of certified seeds of wheat and barley were as follows: for wheat, the total amount of seed provision by the public and the private sector, including stocks and imports, was 218,609 tonnes. The amount distributed to the farmers was 173,045 tonnes. The figures for barley were 23,769 and 22,495 tonnes respectively (MARA, 2008a). The Ministry of Agriculture and Rural Affairs (MARA) states that for 2007 the ratio of the distribution of certified wheat seeds to the total amount needed for agricultural production as calculated by the Ministry was 31 percent. This figure for barley was 9 percent (MARA, 2008b). The liberalization process in the agriculture sector accelerated with the signing of the Economic Reform Loan (ERL) agreement with the World Bank in 2000, which comprised not only modifications in the subsidy system or input markets but a comprehensive structural change in the sector (Aydin, 2005). This included ―a complete phasing out of the support system, a strengthening of the direct income support system, the transition to new cropping systems and changes to the administrative structures in agriculture‖ (Aydin, 2005:160). Following this, the Agricultural Reform Implementation Project (ARIP) was put in place (see It should be underlined that the above figures by the Ministry do not necessarily show that the 69 percent of wheat producers and 91 percent of barley producers are using traditional varieties of wheat and barley. The calculations of need by the Ministry are based on the necessity to renew certified seeds every three years for both wheat and barley. These farmers may be reusing modern varieties of seeds older than three years, or may be mixing traditional and modern varieties that they had obtained more than three years ago.

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Chapter 4 by Akder; Chapter 5 by Cakmak and Dudu) to carry out the measures identified in the ERL agreement under World Bank guidance, covering the 2001–2005 period (Aydin, 2005), and later extended to 2007. While this overall neoliberal restructuring was taking place in the agriculture sector, a parallel process was proceeding with a series of legislation, rules and regulations which were directly related to intellectual property rights and the seed sector. These include the Law on the Protection of Breeders‘ Rights for New Plant Varieties (Law No. 5042), which entered into force in 2004, and the 2006 Seed Law (Law No. 5553)—important steps towards harmonization with the UPOV Convention; Turkey has also recently become a member of UPOV. Law No. 5042 provides a system of Plant Breeders‘ Rights, and is in accordance with the ―condition envisaged within article 27/3 of the TRIPs Agreement on the introduction of a patent protection or a sui-generis protection regime for the protection of plant varieties‖ (OECD, 2004:180). Article 3 of the law states that ―plant varieties that are found to be new, distinct, uniform and stable shall be protected by granting breeders right,‖ and the rights conferred on the holder include those related to production or reproduction, conditioning for the purpose of propagation, offering for sale, selling or other marketing, exporting and importing, and stocking (Article 14, paragraph 1) (Law No. 5042 On the Protection of Breeder‘s Rights for New Plant Varieties, 2004). The duration of protection is 25 to 30 years. The farmers‘ exception is outlined in Article 17, which states that: for the purposes of protecting and safeguarding agricultural production, farmers are authorized to use for new production, on their own holdings, the product of the harvest which they have obtained by planting propagating material of a protected variety, except hybrid and synthetic varieties, without infringing the legitimate rights of breeder, provided that it is not contrary to paragraph 1 of Article 14. However, parallel to the limitations set forth in the revisions of UPOV, the applicability of this exception is restricted to a limited number of species (Article 17, paragraph 2) and to small farmers+; and with the obligation that the farmers eligible for exemption will provide information and documents to the holders at their request.§ Along with the Patent Decree (Decree Law No. 551, Pertaining to the Protection of Patent Rights), Law No. 5042 provides the legal framework that conforms ―with the international standards of IPR protection regarding the Biotechnology industry‖ (OECD, 2004:181). In 2007 Turkey became the 65th member of UPOV. After Turkey became a signatory to UPOV, one environmental group critically commented that one more obstacle on the way to full implementation of the ―Law on the Protection of Breeding Rights of New Varieties,‖ would be eliminated (Ekoloji Kolektifi/Dogader, 2007).

The law ―envisages conditions of granting protection for plant breeders‘ rights in line with those introduced within the UPOV Convention‖ (OECD, 2004:180). + Small farmers are defined as those who grow a maximum of 92 tonnes of wheat, or in respect of those plant species referred in paragraph 2, who meet comparable appropriate criteria (Article 17). § In accordance with Law No. 5042, the rules and procedures for the implementation of the farmers‘ exemption are specified in a Regulation adopted in 2004.

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While Law No. 5042 and the UPOV membership provide a legal–institutional framework for intellectual property rights, the Seed Law (No. 5553) establishes the context for rules of the market in the seed sector with important implications for production and trade. The stated purpose of this law is to raise yield and quality in crop production and seeds, to arrange seed production and trade, and to restructure the seed sector (Article 1) (Law No 5553, Seed Law, 2006). Accordingly, several of its articles (4, 5, 6, 7, and 8) deal respectively with the organization of registration, production, certification, trade, and market inspection of seeds. One important aspect of the Seed Law is that it defines genetic resources as: Plant material to obtain desired genes which are needed by breeders and scientists; potential populations which feature genetic variation in plant structure and distinctive traits, breeding material with some significant attributes, varieties improved for specific purposes, local varieties, wild and transitional forms of cultivated plant species which can be found naturally in a country or region. This is different from the ―variety‖ definition of the law, with the implication that local varieties and custom-bred varieties cultivated by farmers, along with wild species, are viewed as providing merely the raw material for variety development by scientists and breeders (GRAIN, 2007). This reflects the understanding that the products of the cultivation practices of those farmers who have been conserving genetic resources in a dynamic process with decentralized selection, as well as their innovative practices, do not qualify as ―varieties.‖ The law makes the registration of seeds obligatory so that they can be sold (GRAIN, 2007), and the registration of improved varieties will be made by determining their distinctiveness, uniformity and stability and/or biological and technologic traits, and agronomic attributes, while genetic resources will be registered by morphologic or molecular characterization (Article 4). Fees for registration and other services will be determined by MARA every year (Article 9). In addition to the ambiguity about the exact procedure for registering local varieties, whether farmers will have information about the process and the capability of paying the fees for registration are contested issues. Article 14, dealing with exceptions, states that seed exchange between farmers, and seeds for experiments and tests are exempted on condition that they are not subject to trade and the amount is limited to personal use (the amount to be determined by MARA). While this gives farmers the opportunity to exchange seeds, this activity is restricted to personal use; thus the exemption will fall if the farmer engages in trade. There are other points in the Seed Law that open the possibility of a transfer of authority from the public to the private sector. For example, it foresees the establishment of the Turkish Union of Seed Producers as an independent body, and Article 15 states: Ministry may partly or fully authorize union, public institutions and bodies, private legal persons or universities for the activities mentioned in Articles 5, 6, 7 and 8, provided that the terms shall be specified, for temporary or indefinite time in cases Ministry considers necessary. Also, Article 33, which is about the Arbitrators‘ Board of the Union (composed of two representatives elected among sub-union members), gives authority to the Board to resolve

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conflicts evolving between unions and sub-unions and third parties. Such an arrangement in essence excludes farmers and farming communities from the Board in the resolution of conflicts, and envisages a system that will be dominated by seed producers and sellers. All these features of the Seed Law gave rise to intense debates about the likely implications for the future of farming communities and agriculture in Turkey. When the law in its draft form was being discussed, several NGOs and farmers‘ groups criticized it on the grounds that it favored big firms in the private sector, and expected it to have a particularly negative impact on small farmers, who make up the majority of the farming population in Turkey. In an open letter to parliamentarians as the draft law was being debated, the Initiative for the Confederation of Farmer Unions claimed that the new Seed Law intended ―to make the corporations the owner of the seeds‖ (GRAIN, 2006). Basing their argument on justice and equality, the Initiative called for the rights of farmers: to determine the kind of the plant they want to produce; denounce the plants which would be harmful economically, ecologically and culturally; determine the forms and conditions of farming they want to perform; save and develop local agricultural knowledge; use agricultural facilities; choose personally and collectively their product types, quantities, qualities, and the particular way of breeding and cultivation democratically; choose a technology that is convenient to human health and ecology and to use this particular technology in breeding and cultivation and develop and grow their native species (GRAIN, 2006). Several environmental NGOs and the Turkish Agricultural Engineers‘ Board (ZMO) joined in their opposition to the law. Critiques of the law argue that among its stated purposes there are no references to an approach that puts ―public interest‖ at its center, and that the monitoring mechanism that should have been crucial for the whole process is mainly left to the hands of the market (Gurbuz, 2007). On the other hand, its most adamant supporter has been the Turkish Seed Industry Association (TURKTED), which argued that the restructuring of the seed sector via these legal arrangements targeted the development of the seed industry in Turkey and established a structure that gives more weight to the private sector in seed certification, production, distribution and control, functions which were previously dominantly performed by the public sector.

Discussion As noted in this chapter, intellectual property rights and the seed system regulations cannot be thought of separately from the overall restructuring of the agriculture sector, since these processes complement one another in the move towards the establishment of a market Gunaydin points out that while the International Seed Federation‘s Procedure Rules for Dispute Settlement for the Trade in Seeds for Sowing Purposes and for the Management of Intellectual Property, Mediation, Conciliation, Arbitration authorizes an arbitrator only in conflicts between professionals, Article 33 of the Seed Law, with its definition of third parties, unduly expands the authority of the arbitrator (Gunaydin, 2006). TURKTED is a lobby group established by private companies after the economic liberalization processes of the 1980s (van Berkum, 2005).

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economy. In a review (2004) of the agricultural reform process in Turkey, it is stated that one major pillar of ARIP, the direct income support (DIS), should be viewed as only the first phase of an agricultural reform process that fosters agricultural incomes and growth in a manner that is fiscally and economically sound and sustainable. A second phase is now needed that builds on the DIS program by promoting agricultural productivity and boosting agricultural profitability through both investments in rural infrastructure, and in sustainable rural livelihoods that deliver critically needed services, including rural credit, marketing and processing, and technology transfer. (Lundell, Lampietti, Pertev, Pohlmeier, Akder, Ocek and Jha, 2004:xii) Viewed from this perspective, with regard to technology transfers and increasing agricultural productivity, the establishment of plant breeders‘ rights and the restructuring of the seed sector with the aim of increasing the quality of seeds are complementary processes. In the context of conservation of crop genetic resources, these processes are crucial since they define the policy framework within which farmers engage in the production process. As we have seen in the Turkish context, Laws 5042 and 5553 have crucial implications for farmers in terms of their agricultural management. Despite the existence of farmers‘ exemptions in both laws, the constraints that are in place in order to make sure that plant breeders‘ rights are not infringed limit the scope of action on the part of farmers in terms of their access to seeds. At the same time it is highly unlikely that the farmers‘ varieties would meet the criteria set forth by the legal framework. Also, as the case for mechanisms of arbitration shows, farmers are excluded from the decision-making processes on subjects that have a direct impact on their livelihoods. Turkey does not have legislation that incorporates, in however limited a manner, the notion of farmers‘ rights, which could be crucial in providing a setting for the types of mechanisms that could support farmers in continuing to conserve genetic resources. Indeed, the Farmers‘ Initiative‘s call for those rights, mentioned above, was a very important step in opening a space for discussion of the conditions that are necessary for the conservation of these resources, though they were not reflected in the legislation. Analysis of the farmers who conserve crop genetic resources via the cultivation of traditional wheat varieties in Turkey shows that these farmers continue their cultivation practices due to a number of reasons, including the taste and quality of the wheat, its suitability to the field, and resistance against drought or diseases (Aksoy, 2005). The farmers who cultivate traditional varieties mix different technologies and seeds, and experiment with both traditional and modern varieties of crops. The farmers who cultivate both traditional and modern varieties view the traditional variety as some kind of insurance against possible losses from the modern variety. The exchange of seeds, as well as shared local knowledge at the community level, are crucial factors that enable the production process for those farmers. Pressures for market production, in particular with agricultural restructuring, have led these farmers increasingly to plant modern varieties with the hope that there may be an increase in yield, and at the same time have put incredible pressure on maintaining sustainable livelihoods. On the other hand, the traditional varieties they are cultivating are crucial not only because of the diversity they maintain, but in terms of their quality as well; however,

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there is no market for them, as the modern varieties of wheat are what the millers demand (Aksoy, 2005). The aim of increasing productivity and enhancing seed quality that is embraced in the general Turkish legal framework, however, incorporates a particular notion of productivity that finds its value in the marketplace. In the context of Turkey, a center of origin and diversity of genetic resources, there is an urgent need for a rethinking of the framework of agricultural production that comprehends the rights of farmers who conserve genetic resources by their cultivation of traditional varieties. This includes an overall assessment and identification of agricultural policies which generate significant impediments for the continuation of these practices, and the provision of alternative production policy schemes. Rewarding farmers for their contribution to crop genetic resources, and the creation of incentives that enable them to carry on the conservation of genetic resources and sustain their livelihoods, are very important. These incentives, however, cannot merely be based on material benefits linked to the market value of these resources. The public acknowledgment of these farmers‘ contribution to a global public good, and related non-material incentives, will be very important as well. In that respect, one mechanism can be participatory plant breeding (PPB), based on the collaboration between farmers and crop breeders. Brush (2004:207) notes that PPB integrates ―farmers early in the crop improvement process, working with crop populations typically managed by peasant farmers (i.e. genetically variable, segregating material),‖ and is based on ―an understanding of the farmers‘ selection criteria and an appreciation of how farmers acquire and manage seeds‖ (Brush, 2004:209). Turkey has a strong national agricultural program for ex situ conservation; hence the institutional framework necessary for the realization of PPB, which foresees the collaboration between national agricultural research institutes and farmers, already exists. However, one point that should be underlined is that PPB is only one mechanism and cannot be thought of separately from a reorganization of the framework in which agricultural production takes place, from a perspective that integrates the contributions of farmers who conserve genetic resources. One very important step towards maintaining the conservation of agrobiodiversity will be the recognition of farmers‘ rights in the legal–institutional arrangements in Turkey. Yet, rather than simply an attachment to the existing framework, this must be based on a comprehensive restructuring of the existing arrangements that will be able to incorporate a broader vision of farmers‘ rights as articulated by the Initiative for the Confederation of Farmer Unions discussed above, establishing rights to development, equality, and justice. This would necessitate the elimination of policies that threaten the conditions of existence of those small farmers who conserve genetic resources, and the provision of conditions that ensure sustainable livelihoods to them.

Brush (2004) also underlines that what is crucial in those programs is that there should be a commitment to maintenance of on-farm diversity, so the emphasis must be more on conservation of local material rather than crop improvement.

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ACKNOWLEDGMENTS I would like to thank Fikret Adaman, Gokhan Ozertan, Yucel Terzibasoglu and an anonymous reviewer for their helpful comments.

REFERENCES Aksoy, Z. (2005). The Conservation of Crop Genetic Diversity in Turkey: An Analysis of the Linkages between Local, National and International Levels. Unpublished PhD Dissertation, University of Massachusetts Amherst. Aoki, K., & Luvai, K. (2007). Reclaiming ―common heritage‖ treatment in the international plant genetic resources regime complex. Michigan State Law Review, 35–70. Aydin, Z. (2005). The Political Economy of Turkey. London & Ann Arbor: Pluto Press. Baumüller, H., & Tansey, G. (2008). Responding to Change. In G. Tansey, & T. Rajotte (Eds.), The Future Control of Food: A Guide to International Negotiations and Rules on Intellectual Property, Biodiversity and Food Security. London: Earthscan. Borowiak, C. (2004). Farmers‘ rights: Intellectual property regimes and the struggle over seeds. Politics and Society, 32 (4), 511–543. Boyce, J. K. (2006). A Future for Small Farms: Biodiversity and Sustainable Agriculture. In J. K. Boyce, S. Cullenberg, P. K. Pattanaik, & R. Pollin (Eds.) Human Development in the Era of Globalization: Essays in Honour of Keith B. Griffin. Cheltenham, UK, & Northampton, US: Edward Elgar. Brush, S. B. (1996). Whose Knowledge, Whose Genes, Whose Rights? In S. B. Brush, & D. Stabinsky (Eds.), Valuing Local Knowledge: Indigenous People and Intellectual Property Rights. Washington, D. C.: Island Press. Brush, S. B. (1998). Bio-cooperation and the benefits of crop genetic resources: The case of Mexican maize. World Development, 26 (5), 755-766. Brush, S. B. (2003). The Lighthouse and the Potato: Internalizing the Value of Crop Genetic Diversity. In J. K. Boyce, & B. G. Shelley (Eds.), Natural Assets: Democratizing Environmental Ownership. Washington, D. C.: Island Press. Brush, S. B. (2004). Farmers’ Bounty: Locating Crop Diversity in the Contemporary World. Yale University Press. Brush, S. B. (2007). Farmers‘ rights and protection of traditional agricultural knowledge. World Development, 35 (9), 1499–1514. Cottier, T., & Panizzon, M. (2006). A New generation of IPR for the Protection of Traditional Knowledge in PGR for Food, Agricultural and Pharmaceutical Uses. In S. Biber-Klemm, T. Cottier, & D. S. Berglas (Eds.), Rights to Plant Genetic Resources and Traditional Knowledge. Wallingford, UK: CABI publications. Cullet, P., & Raja, J. (2004). Intellectual property rights and biodiversity management: The case of India. Global Environmental Politics, 4 (1), 97–114. Ekoloji Kolektifi/Dogader, (2007). UPOV: Bitkilerin Tekellesmesinde Yeni Bir Adim.(http://www.ekolojistler.org/upov-bitkilerin-tekkellesmesinde-yeni-bir-adim.html) Esquinas-Alcazar, J. (2005). Protecting crop genetic diversity for food security: political, ethical and technical challenges. Nature Reviews Genetics, 6, 946–953.

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Eyzaguirre, P. B., & Dennis, E. M. (2007). The Impacts of collective action and property rights on plant genetic resources. World Development, 35 (9), 1489–1498. Food and Agriculture Organization (FAO) (1997). State of the World‘s Plant Genetic Resources for Food and Agriculture. (http://www.fao.org/ag/AGP/AGPS/ PGRFA/pdf/swrfull.pdf) Rome: FAO. Food and Agriculture Organization (FAO) (2001). International Treaty on Plant Genetic Resources for Food and Agriculture. Commission on Genetic Resources for Food and Agriculture. http://www.fao.org/ag/cgrfa/itpgr.htm Rome: FAO. Gari, J. A. (1999). Biodiversity Conservation and Use: Local and Global Considerations. Science, Technology and Development Discussion Paper No. 7, Center for International Development and Belfer Center for Science and International Affairs. Cambridge, MA: Harvard University. Gisselquist, D., Nash, J., & Pray, C. (2002). Deregulating the transfer of agricultural technology: Lessons from Bangladesh, India, Turkey and Zimbabwe. The World Bank Research Observer, 17 (2), 237–265. GRAIN (2006). Farmers Protest Turkish Seed Law, 27 October 2006. (http://www.grain.org/bio-ipr/?id=494) GRAIN (2007). Turkey‘s New Seed Law: New Controls, Old Struggles. Seedling, April 2007, 9–12. Gunaydin, G. (2006). Anadolu Beyazi ―out‖, Bruksel lahanasi ―in‖, Tarim ve Muhendislik, 78–79. Gurbuz, M., (2007). Sorun ‗kanun‘ mu, teknoloji yetersizligi mi?, Cumhuriyet Tarim, Gida, Hayvancilik, 29, 6. Karagoz, A., & Zencirci, N., (2005). Variation in Wheat (Triticum spp.) Landraces from Different Altitudes of Three Regions of Turkey. Genetic Resources and Crop Evolution, 52 (6), 775–785. Law No. 5042 On the Protection of Breeder‘s Rights for New Plant Varieties, (2004). (http://www.kkgm.gov.tr/regulation/law/5042.html) Law No. 5553 Seed Law, (2006). (http://www.kkgm.gov.tr/regulation/law/ seed_law.html). Lundell, M., Lampietti, J., Pertev, R., Pohlmeier, L., Akder, H., Ocek, E., & Jha, S. (2004). Turkey: A Review of the Impact of the Reform of Agriculture Sector Subsidization. Environmentally and Socially Sustainable Development Unit Europe and Central Asia Region, Working paper, Report No. 34641. Washington, D. C: World Bank. McGraw, D. (2002). The CBD: Key Characteristics and Implications for Implementation. RECIEL, 11 (1), 17–28. Ministry of Agriculture and Rural Affairs (MARA) (2008a). Tarim ve Koyisleri Bakanligi, Tarimsal Uretim ve Gelistirme Genel Mudurlugu, Tohumculuk Dairesi Baskanligi. ―2007 Yili Kamu ve Ozel Sektor Sertifikali Bugday ve Arpa Tohumlugu Tedarik ve Dagitim Durumu ile 2008 Yili Uretim programi Ozetleri‖, (http://www.tarim.gov.tr/ sanal_kutuphane3/TohumculukKitabi_2008/5-Serin_Iklim_Tahillari/32007GERCEKLESMEVE2008PROGRAMOZETI.pdf). Ministry of Agriculture and Rural Affairs (MARA) (2008b). Tarim ve Koyisleri Bakanligi, Tarimsal Uretim ve Gelistirme Genel Mudurlugu, Tohumculuk Dairesi Baskanligi. ―Sertifikali Tohumluk İhtiyac Miktari ve Dagitim Durumu (2005–2007)‖, in Ulkesel Tohumluk Tedarik, Dagitim ve Uretim Programi 2008. (http://www.tarim.gov.tr/ arayuz/10/icerik.asp?fl=sanal_kutuphane3/TohumculukKitabi_2008/index.htm)

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OECD (2004). Policy Roundtables: Intellectual Property Rights, DAF/COMP (2004) 24. (http://www.oecd.org/dataoecd/61/48/34306055.pdf). Ramanna, A. (2006). Farmers‘ Rights in India: A Case Study. The Farmers‘ Rights Project. FNI Report 6/2006. Fridtjof Nansen Institute. (http://www.fni.no/ doc&pdf/FNIR0606.pdf). Rausser, G., Simon, L., & Ameden, H. (2000). Public-private alliances in biotechnology: Can they narrow the knowledge gaps between rich and poor? Food Policy, 25, 499–513. Rosendal, G. K. (2006). Balancing access and benefit sharing and legal protection of innovations from bioprospecting: Impacts on conservation of biodiversity. The Journal of Environment and Development, 15, 428–447. Scott, J. C. (1998). Seeing Like a State. Yale University Press. Spielman, D. J., & von Grebmer, K. (2004). Public Private Partnerships in Agricultural Research: An Analysis of Challenges Facing Industry and Consultative Group on International Agricultural Research, EPTD Discussion Paper, No. 113. Washington, D. C.: International Food Policy Research Institute. Srinivasan, C. S. (2003). Exploring the feasibility of farmers‘ rights. Development Policy Review, 21 (4), 419–447. Swanson, T. and Göschl, T. (2000). Property rights issues involving plant genetic resources: Implications of ownership for economic efficiency. Ecological Economics, 32, 75–92. van Berkum, S. (2005). Agricultural and Food Industry Structure. In A. Burrell and A. Oskam (Eds.), Turkey in the European Union: Implications for Agriculture, Food and Structural Policy. Wallingford, UK: CABI publications. Zerbe, N. (2007). Contesting privatization: NGOs and farmers‘ rights in the African model law. Global Environmental Politics, 7 (1), 97–119.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 12

RETHINKING AGRICULTURAL POLICY IN TURKEY IN THE CONTEXT OF NEW GROWTH THEORY Philipp Aerni University of Berne and ETH Zürich, Switzerland

ABSTRACT As in many other protectionist countries, the pressure for agricultural reform in Turkey comes mostly from foreign institutions, be it the World Bank, the IMF, the WTO or the EU. The influence of these institutions on Turkish agricultural policy has however decreased in recent years, and therefore reform efforts have been abandoned in many areas. In this paper, we argue that Turkey should start designing a homegrown agricultural reform policy that is based on New Growth Theory, the economic theory of the new knowledge economy. Such a policy would be focused on facilitating change through entrepreneurship and innovation on the countryside and differ substantially from the policy advice that has been given so far by foreign institutions.

INTRODUCTION The failure of the Doha Round in July 2008 highlighted once again that not only developed but also developing countries are adamant about the need to preserve protectionist agricultural policies—implicitly assuming that the best response to high food prices is to move towards agricultural autarky rather than global market integration (see Chapter 18 by Haeberli). Turkey is a typical country that applies a social planning approach to agriculture claiming that subsidizing farmers and protecting them from foreign competition allows the The Doha Round is the current trade-negotiation round of the World Trade Organization (WTO), which commenced in November 2001. Its objective is to lower trade barriers around the world, which would allow countries to increase trade globally. The most recent round of negotiations, July 23–29 2008, broke down after failing to reach a compromise on agricultural import rules. After the breakdown, major negotiations were not expected to resume until 2009. Nevertheless, intense negotiations, mostly between the US, China and India, were held at the end of 2008 in order to agree on negotiation modalities. However, these negotiations did not result in any progress. For more information see http://www.wto.org/english/tratop_e/dda_e/dda_e.htm. .

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country to preserve a certain autarky in food production. A paper by Akder (2007) on agriculture in Turkey showed, however, that the rise and decline of Turkish agricultural subsidies and tariffs mainly benefits well-organized political interest groups and as such has proved to be an ineffective tool for ensuring autarky. Moreover, Turkish agricultural policy over the past two decades has discouraged public and private investment in agriculture and made it less competitive and less prepared for change. An agricultural system that is shielded from competition and does not reward innovation is unlikely to renew itself technologically and economically and therefore is hardly likely to result in homegrown productivity increases (Aerni, 2007a). Instead such a system has to increasingly rely on imported technology to enhance agricultural productivity. The high dependence on imported agricultural know-how and technology as a consequence of protectionist policies is often ignored by the advocates of autarky in food production. The failure of the Doha Round to further open up agricultural markets may not just be related to well-organized national constituencies that fear structural change in agriculture but also the inability of neoclassical welfare economists to calculate the welfare effects of new goods and services that result from more public and private investment in agricultural research and development (R&D) (Romer, 1994; Warsh, 2006). New Growth Theory, the theory of the new knowledge economy, was able to address this gap but has so far not been given due attention in national agricultural policies (Aerni, 2007). New Zealand, however, represents a noteworthy exception to the rule. Its pressure to carry out a radical agricultural reform in the 1980s came from the bottom-up. New Zealand farmers realized that a heavily subsidized agricultural system takes decision making power away from them and, at the same time, is unable to ensure their economic survival (Aerni 2009). Welfare economists would predict that the abolishment of subsidies will result in a structural change that enables a few cost-competitive farmers to expand with certain crops and types of livestock that enjoy a comparative advantage on the international market, while the less competitive farmers will be forced to abandon agriculture and look for a job elsewhere (Rieder and Anwander Phan-huy, 1994). Yet, in New Zealand, only around 600 farmers out of a total of 90,000 decided to leave agriculture and accept an early retirement package. The rest stayed in business because the withdrawal of the public sector led to more private sector investment and more innovation in agriculture (Chamberlin, 1996). At the same time, the public sector assumed the role of a coach and facilitator of public–private partnerships in agricultural R&D. The result was a complete renewal of the agricultural sector that led to more diversification and rural empowerment. It resulted in new goods and services that produced large welfare effects for society and the environment. This bold and successful reform did not follow the conventional policy advice of the International Monetary Fund (IMF) or the World Bank. New Zealand reformers stopped relying on the basic assumptions of neoclassical welfare economics and embraced New Growth Theory instead. In this article, we will discuss the current Turkish agricultural policy and how it was shaped by the mindset of neoclassical economics. Subsequently, we show why policy makers are focused on winning elections rather than the proper implementation of idealistic economic planning. Finally, we show what a Turkish agricultural policy would look like if guided by the ideas of New Growth Theory. In this context we will explain why such a policy could be more effectively implemented than the World Bank-driven Agricultural Reform Implementation Project (ARIP).

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AGRICULTURAL POLICY IN TURKEY AND THE FLAWS OF ARIP Agricultural activities in Turkey are hard to define. They range from the highly competitive and capital-intensive cultivation of export crops in Western and Southern Turkey to heavily subsidized and trade-protected cereal and livestock production in northern and north-eastern Turkey. On an aggregate level, the agrarian structure does not look very healthy with an average farm-size of less than 6 hectares (Aerni, 2007b). It indicates that the majority of farming households in Turkey are still dependent on low-input semi-subsistence agriculture. The generally low productivity of agriculture does not pose an immediate threat in terms of hunger or malnutrition. Turkey‘s agricultural support policies as well as the local safety nets ensure a minimal standard of living even for the very poor. Yet, these traditional rural structures combined with poor access to education and few off-farm employment opportunities produce a huge underemployment problem that is socially unsustainable (Karapinar, 2007).

Agricultural Reform Implementation Project (ARIP) In 2001, Turkey adopted the ARIP. This reform changed the practical instruments of policy intervention without questioning the underlying policy paradigm (Aerni, 2007b). A major driving force behind ARIP was the World Bank, which provided policy advice and the necessary financial support (Akder, 2007). ARIP was mainly focused on reforming agricultural support policies in Turkey. Direct income support (DIS) measures were supposed to compensate farmers for potential losses resulting from the phasing out of trade-distorting subsidies and a general reduction of state intervention. Though the World Bank is investing millions in agricultural education, the content of this education is largely focused on complying with regulation, in particular food and environmental standards, rather than assisting farmers with training, coaching and infrastructure that would encourage them to become innovative entrepreneurs. As a consequence, national policy efforts to renew Turkish agriculture through the design of a long-term strategy that includes the promotion of rural entrepreneurship and innovation remained thin (Akder, 2007). The policy instruments may have changed but the basic policy paradigm persisted. Direct income support (DIS) was designed to be the new policy instrument that would eventually facilitate more political support for liberalization of agricultural trade in Turkey and make Turkish agricultural policy more compatible with the WTO Agreement on Agriculture (AoA) and the Common Agricultural Policy (CAP) of the European Union (EU). However, the reform proposals have not gained much support from the public at large and farm lobbies in particular. Hence, the reform was diluted significantly during the policy process. But it is not only the opposition of certain influential domestic stakeholders but also the ineffectiveness of the policy instruments, judging from for a decade-long experience in the EU. Direct payments are not effective because they invite farmers to take advantage of the principal–agent problem (Aerni, 2009). As agents they pass on to the principal (government) only that information about their farms which enables them to secure access to direct payments. The information on aspects that would not comply with government requirements

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is concealed as best as possible. This explains why farmers often do not feel themselves responsible for the sustainable management of the natural resources. It is just seen as a stated public preference that must be taken into account when securing access to direct payments. Direct payments furthermore keep land and labor prices high and discourage private sector investments (Rentsch, 2006). The social planning approach as practised in Turkish agriculture is seen as a second-best solution in neoclassical welfare economics, but there seems to be no best solution because the underlying comparative-static approach is unable to take into account the welfare effects of new goods and services in agriculture. These welfare effects emerge when governments act as facilitators of private sector investment in agriculture rather than as mere regulators.

NEOCLASSICAL WELFARE ECONOMICS VS. NEW GROWTH THEORY The neoclassical approach is based on the assumption that all goods and technologies that could possibly exist, already do exist. This philosophy of plenitude (Lovejoy, 1936) proves particularly inadequate in a knowledge economy where the exponential growth of knowledge leads to an exponential growth of the probability that new goods, services and technologies will come into being and generate new markets (Warsh, 2006). This process is not just the primary source of wealth and prosperity (generated by increasing returns) but also generates a social welfare surplus that cannot be captured by the innovating company itself. Paul Romer, the father of new growth theory, was able to highlight the social welfare impact of new goods and rebutted the assumption of old neoclassical growth theory (Solow, 1956) that ignored the microeconomic foundations of macroeconomic developments (Romer, 1994). For his rebuttal he used the formal language of neoclassical economics to disqualify its fundamental assumptions. Yet, the ―increasing returns‖ revolution continues to maintain a low profile in economic research as well as in teaching. Many influential traditional economists such as Solow, Mankiw and Mokyr tried their best to square old arguments with new ones pretending that the new revolution had not actually happened. On the other hand, many economists who advocated new growth theory in one way or another either changed their research interests (Helpmann, Aghion, Krugmann) or moved to a business schoos l—as Paul Romer himself did (Warsh, 2006). In his paper‚ entitled ―Endogenous Technological Change‖ Paul Romer (1990) showed that knowledge, unlike other production factors such as land, labor and capital, is a non-rival good that can be used by many at the same time without losing its value. Thanks to the revolution in information technology, this knowledge can be reproduced at almost no additional cost. Yet, the creation of new knowledge is expensive since it requires large fixed costs to be spent on research and development (R&D). These costs also include the hiring of scarce and expensive human capital, the most sought-after resource in the knowledge economy (The Economist, 2006). It is therefore not surprising that those who create new knowledge want to make its use partially excludable through intellectual property rights (IPRs). This temporary monopoly resulting from patent protection allows the owner company to extract a rent by setting the price of the new knowledge-intensive product above its marginal production costs. It thus enables the company to compensate for the high fixed costs

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that were spent on R&D, and, at the same time, provides incentives to invest again in the improvement of the product. It is the resulting form of monopolistic competition, and not perfect competition (as portrayed in the idealized neoclassical theory), that creates new goods and new markets. The company that introduces a new good has the temporary power of setting the price of this good in the market (unlike companies in perfect competition which are all assumed to be pricetakers). Neoclassical welfare economists who still accept basic ideas of Paul Samuelson's seminal textbook published in 1947 (Samuelson, 1947), often denounce price-setting power as the extraction of an undeserved rent by a monopolist at the expense of the consumers who suffer a deadweight loss due to the higher price they have to pay for the product. Policy makers have therefore tended to identify monopolistic competition as a market failure that needs to be addressed by government intervention. The failure to distinguish between temporary monopolies, which are based on the introduction of a new good, and permanent monopolies, obtained for example through exclusive procurement contracts with governments, is therefore not taken into account in neoclassical welfare economics (Aerni, 2007a). Its blindness as to the social welfare effects that result from introduction of new goods was noted by a French engineer called Dupuit in the 19th century (Romer, 1994). He calculated the cost of building a bridge and the minimal toll the users of the bridge would need to pay to recover the fixed costs for building the bridge. He was able to show that the entrepreneur who builds the bridge is constrained in his efforts to extract a maximal rent from the users, because if the toll is too high, the user might simply not cross the bridge (assuming that the users are acting in a competitive world with scarce resources themselves). He therefore concluded that the entrepreneur can never capture all the benefits of building the new good. The same is true for a company that wants to develop a new technology. Instead of extracting an additional rent through a toll (as in the case of a physical good), it would do so through a royalty fee on the patented technology. The creation of new goods that emerge from monopolistic competition can be illustrated by means of a simplified version of a partial equilibrium model adopted from Romer (1994) (see Figure I). It represents a partial equilibrium model with the x-axis showing the amount of production of Good Z and the y-axis the price per unit charged by the company. The price is higher than the marginal production cost because the company aims to recover the high fixed costs spent on the development of Good Z (not represented in the marginal cost of production) and to make profits that allow for further investment in R&D. Neoclassical economists interpret this graph as a typical case of a market that is dominated by a monopolist. In order to illustrate the monopolist rent, they would point to rectangle B, which represents the surplus the monopolist extracts through market power, and also triangle C, which represents the deadweight loss for consumers who have to pay a higher price for the good. However, if this monopolist has obtained his position not through collusion but through investment in the development of a new good, an additional social welfare triangle A comes into being. This triangle was ignored by economists prior to Romer. It represents the social welfare surplus that is generated through the new good. The monopolist cannot capture this triangle because, as Dupuit had already recognized, if he or she were to raise the price above this level, he or she would lose the market (the price would be too high for potential buyers who are constrained by their own competitive markets).

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Romer concludes that if economists were to become aware of this triangle A (which he also called the Dupuit triangle in honor of the 19th century engineer), they would realize that the primary source of wealth and well-being in society is not based on perfect competition but on the introduction of new goods and technologies. New technologies may create new inequalities and risks at the beginning, when few have access to the relatively expensive technological innovation, and accidents may happen due to lack of experience with the new technology. But in the long run, many new competitors enter into the market, increase the total offer, constantly improve the safety of the technology and lower the price (Schumpeter, 1942). Eventually, the product becomes cheaper and safer and thus generates a global mass market. At this stage, it could also become a tool of empowerment for the people who previously lacked access to the technology (Rosenberg, 2000). National governments play a crucial role in facilitating the production of new goods and services that create large welfare effects. They can discourage private sector investment by imposing high taxes on profits, trade restrictions on essential capital goods, prohibitive safety regulations, and inefficient and burdensome government bureaucracies. Corruption and weak property rights can additionally increase the costs for the company until the point is reached where the company decides not to invest any more in a developing country despite cheap labor and abundant natural resources; the increasing costs exceed the additional revenues expected through the higher price they intend to charge (see Figure I). So the good will simply not be produced, which means that the country concerned loses the social welfare benefits of the Dupuit triangle. Instead of merely taxing and regulating companies and pushing up the bar of their marginal costs of production, governments can serve as facilitators and encourage investment through tax exemptions for R&D, political stability, a valuable stock of domestic human capital, dependable public infrastructure and a relatively open and well-developed financial market (that increases the possibility of hedging risks).

Figure I. The welfare surplus generated by the introduction of a new good according to Romer (1994).

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In this context, governments in developed countries have very favorable conditions and many means available to facilitate such private sector investment. On the other hand, this allows them to increase the cost of regulation of a company (e.g. by pushing up environmental and food safety standards, see Chapter 19 by Jusoh). Poor countries, however, are in a different position: because the market is tiny and the state budget too small to improve investment conditions, additional regulations quickly erase the profits that foreign investors can expect.

Why is Agriculture treated as an Exception? The first wave of globalization in the second half of the 19th century led to a rapid decrease in transportation costs and removed many of the geographic barriers that previously protected local agriculture from foreign competition. This threatened the livelihoods of many farmers in the early stage of industrialization and governments started to become concerned about the capability of their countries to ensure the national food supply in times of war (Anderson, Levy and Morisson, 1991). Political and economic (later also social and environmental) instabilities were identified as negative external effects that need to be addressed by the public sector (Rieder and Anwander Phan-huy, 1994). At the outset, state intervention was mainly justified in the name of managing the public good called ―national food security‖. Agricultural economists were hired as social planners to ensure the effective management of this public good. The planning models they were to use at a later stage (e.g. linear programming) to calculate how certain normatively set policy objectives can be achieved most effectively were largely developed by scientists in the former Soviet Union. Even though these policy planners quickly realized that a democracy is not about the joint effort to design a rational policy but the self-interested search for access to scarce public resources, it did not prevent them from sticking to the principles of welfare economics and ignoring the role of political economy (Warsh, 2006). Instead, agricultural economists embraced the theoretical concept of the so-called agricultural treadmill developed by Cochrane (1979). According to this concept, farmers produce a homogeneous and inferior commodity in the form of food. They are portrayed as passive price-takers in a market of perfect competition. The role of technology is reduced to its potential to increase agricultural productivity (while its potential to improve food quality is not addressed). Since farmers face perfect competition they are assumed to produce at the level where their marginal costs just equal their marginal revenues. According to the concept of the agricultural treadmill, it is possible that certain farmers would adopt a new technology that allows them to lower their production costs and produce more efficiently. This gives them a temporary advantage and thus a windfall profit. Yet, this advantage is quickly erased because all the competitors will have to follow suit if they want to stay in business. This agricultural treadmill is portrayed as the main reason for surpluses in food production and decreases in relative food prices. Unsurprisingly, agricultural economists concluded that the treadmill, and with it, technological innovation, largely benefited food consumers at the expense of food producers. They argued that the agricultural treadmill is producing a sort of market failure since farmers would get poorer over time because they would produce more and earn less. Moreover, the resulting intensification of agriculture would destroy the environment and family farming and negatively affect the quality of food. Yet, in retrospect,

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even agricultural economists would admit that it was probably not the agricultural treadmill, but the market-distorting instruments of agricultural policies that provided the biggest incentives to adopt monoculture practices and degrade the environment and food quality. One only needs to go and watch the movie ‗We Feed The World‘, produced by Erwin Wagenhofer in 2005 (the most successful Austrian documentary movie ever) to get a picture of the endless number of greenhouses in southern Spain that focus almost exclusively on intensive tomato production. Erwin Wagenhofer, who is a city dweller with little knowledge of agricultural policy, blames the corporate world for all this misery. Yet, in fact intensive tomato production in Spain is a result of EU subsidies. The same goes for the monoculture of olive trees in Spain and Greece, overfishing in the Atlantic Ocean, excessive growing of grapes for producing poor-quality wine in France and many other subsidized products. All these practices are not just harming the environment but they also discourage innovation and tend to make food quality worse—for why should these producers care about innovation or cater to consumer taste if the money comes from Brussels anyway (Aerni 2007a)?

Agricultural Policy after the Cold War In the 1990s, agricultural economists admitted that certain policies produced ‖suboptimal‖ results despite the rational social planning. They recommended a switch from production-tied subsidies to income-support subsidies (Rieder and Anwander Phan-huy, 1994). The new objective was the maintenance of a strong, healthy and environmentally sustainable agricultural sector. As a consequence, things like agro-biodiversity, food safety, decentralized settlement, and custodianship of cultural landscapes were declared to be the new public goods provided by farmers—after the old public good of maintaining food security became somewhat obsolete in view of the production surplus and the end of the Cold War. There is, however, increasing evidence that the new agricultural policies and the new justifications for government intervention in agriculture did not bring about the expected improvements: direct payments were designed to mitigate the structural change that was expected to result from slightly more open agricultural markets as demanded by the WTO AoA. Yet, direct payments proved to be an obstacle to structural change because they increased the value of land and discouraged many farmers from becoming more innovative and competitive. At the same time the new normative goals of agricultural policy intended to promote environmental, social and economic sustainability through compliance schemes (e.g. agro-environmental measures and labeling schemes in return for more direct payments and premium prices) once again turned out to be suboptimal (Ansell and Vogel, 2006). Environmental improvements were relatively meagre and largely achieved through more efficient input technologies (Disch, 2006). Moreover, a large Europe-wide evaluation of agroenvironmental measures showed that such measures hardly ever contribute to an increase in valuable biodiversity (Kleijn et al., 2006). Further, the long-term experience of US agricultural policy seems to suggest that there is a correlation between the amount of direct payments a rural region receives and its economic decline (The Economist, 2005). This is not surprising because a high dependence on direct payments is not an attractive way of life for young people so they are likely to look for opportunities elsewhere to participate in the new knowledge economy. Also, the private sector is reluctant to invest in heavily subsidized

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regions because of the receiver mentality of the people and high production costs (pushed up indirectly through direct payments). In spite of the timid moves towards opening of agricultural markets, agricultural trade has hardly increased over the past two decades. One major reason for this is the WTO AoA itself, which is primarily focused on a gradual improvement of market access rather than the reduction of domestic support measures. This in spite of the fact that it is, ultimately, domestic support measures that result in wrong market signals, overproduction and the subsequent call for market access restrictions (Desta, 2002). The fatal consequence has been that the amount of domestic support did not decrease but was simply moved from so-called ―actionable‖ subsidies (placed in the amber box of the AoA) to ―non-actionable‖ subsidies (placed in the blue and green box of the AoA). But are these policies sustainable and do they really benefit farmers? In the light of what we now know, the answer is that they may look sustainable and favor farmers‘ interests on the short run, but in the long run the resulting delay in economic and technological change may render agriculture less sustainable and further impoverish farmers (Grethe, 2007).

Turkey has to make Choices There is a growing awareness in the academic community in Turkey that neither the EU nor the World Bank experts on agricultural policies properly understand the context in which Turkish agriculture operates (Karapinar, 2007; Akder, 2007). It regrets that the Turkish government continues to believe in the usefulness of the foreign policy advice that is still guided by the dated principles of neoclassical welfare economics. The recent World Development Report 2008 on Agriculture (World Bank, 2007) as well as contemporary work by the leading agricultural economists (Cooper, Lipper and Zilberman, 2006) still follows the basic assumption of Solow's Growth Theory (Solow, 1956) that knowledge is a non-rival and non-excludable public good that needs to be provided exclusively by the public sector. There is a wide consensus that, over the past two decades, the private sector has increasingly been contributing to knowledge production and its subsequent conversion into new goods and services. This is particularly true in the areas of information technology and biotechnology. These new goods and services produce positive as well as negative externalities for society. Rather than merely focusing on the negative externalities, the public sector should design policies that identify those goods and services that would generate large positive externalities for society and then support the private sector in developing and producing them in collaboration with the public sector (Heal, 1999). Knowledge may still be non-rival in character (more frequent use does not affect its quality or availability) but the private sector needs partial excludability of the new product through the protection of intellectual property rights (IPRs) in order to have an incentive to invest in it. IPRs create temporary monopolies (the right to exclude others from producing the good) that help the company to cover the fixed costs necessary to develop and commercialize the product. But when it comes to the provision of public goods in the form of new goods and services that have the ability to alleviate poverty and improve the environment, public policy can design incentive-schemes that make such innovations accessible to the poor as well (for example, tax breaks for specific R&D, advance purchase agreements, sharing of R&D costs in return for access for the poor, among others). Public policy makers in the area of public health are currently experimenting with all

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kinds of policy incentives and benefit-sharing models that make it attractive for the private sector to make IPRs available for the global public good and to collaborate in large-scale projects with the public sector. Yet, in the area of agriculture, such attempts are still rare and are not encouraged by governments which assume that public—private partnerships and technology transfer are not conducive to attaining the goals of sustainable agriculture (Aerni, 2008). In the case of Turkey, science and technology policy is insufficiently connected to the private sector to enable such public–private partnerships in R&D—and this applies in particular to the agricultural sector. The history of parastatals as input providers and distributors of agricultural products in Turkey has a lot to do with this situation. It basically led to the crowding out of private sector activities and a general disconnect between agricultural research at universities and agribusiness development activities in the private sector. This is becoming increasingly obvious in view of the absence of any coherent public policy strategy to make use of biotechnology in efforts to address the problems of sustainable agriculture (Cetindamar, 2007, Ozertan and Aerni, 2007). The outside pressure that would force the Turkish government to adopt progressive policies is essentially missing because neither the EU nor the Bretton Woods Institutions seem to place emphasis on the mobilization of human resources in Turkish agribusiness. EU agricultural economists who study the integration of Turkish agriculture into the CAP continue to see agriculture mainly as a burden on the EU budget rather than an important business with a lot of potential (Burrell and Oskam, 2005).

Looking at Best Practices, Looking at New Zealand Instead of relying on advice from the EU and the World Bank, Turkey should focus more on considering best practices and bold policy experiments that often run counter to conventional wisdom in agricultural policy. In this context, New Zealand could become a source of new policy ideas for sustainable agricultural development. New Zealand decided in the 1980s that its heavily subsidized agricultural system has become a burden on the national economy as well as on the environment. There were around 70 million sheep mainly intended to be exported to the UK, the traditional importer of New Zealand‘s agricultural products. However, the UK became part of the EU and committed itself to opening its agricultural market. This confronted New Zealand‘s farmers with the need to respond to a changing world, which the agricultural policies of the time did not allow them to do. So they supported radical and unilateral agricultural liberalization on the condition that the New Zealand government would continue to support them in their efforts to become independent entrepreneurs. The usual general equilibrium models run by agricultural economists would have predicted that such a liberalization would result in more monoculture, rural impoverishment, migration to the cities and environmental degradation due to intensive large-scale farming. The problem of these models is that they are unable to take into account the creativity, resourcefulness and endurance of farmers and agricultural researchers in finding new solutions and developing new agricultural products that will result in increasing rather than decreasing returns.

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After the abolishment of subsidies in New Zealand in the 1980s, the decision-making power moved from the government to the farmers. Around 300 farms were not able to cope with all the new business risks and the growing uncertainty. They decided to move out of agriculture and accept an early retirement package. The rest stayed in business and eventually thrived. This was possible thanks to the banks who were not interested in seeing indebted farmers going bankrupt. While the banks supported the farmers by restructuring their farm debts, the government assumed the role of a farmer coach by better connecting the farmers to research institutes and the private sector and pursuing an international strategy to promote New Zealand‘s agriculture. Even though there was hardship, none of the farmers (or even environmentalists) would want return to a system that relies heavily on government intervention, because in spite of growing environmental problems, especially in dairy farming, New Zealand‘s agriculture has become more diversified, more knowledge-intensive and more innovative when it comes to finding solutions to environmental problems. Overall, the return of decision-making power to farmers improved rural economic activities, created more employment, improved food quality and choice and ensured that the countryside of New Zealand has become a more attractive place in which to live than ever before (Chamberlin, 1996). The agricultural reforms in New Zealand led to more differentiation of the farm work. Farms are often run as equity partnerships with investors from the cities. Farmers themselves often specialize in the strategic management of the farm, while certain tasks are performed by professionals from outside (milking, harvesting, and marketing among others). Farm decisions depend on market prospects, the particular environmental conditions and the regional price of labor and land (attractive tourist areas raise the opportunity costs of labor and the value of land). Farmers also contribute to innovation in farm management and the development of new products. Often farmers come up with a new technique or product and approach research institutes to find out about its potential value and ways to improve it to a stage that makes it attractive for commercialization. In this context, farmers and researchers in New Zealand have become partners in a national enterprise. It is also interesting that the largest dairy company in New Zealand, Fonterra, is owned by dairy farmers themselves. This allows them to have a capital income in addition to the revenues generated through the sale of agricultural products. In other words, New Zealand farmers are actively making use of the opportunities of the global knowledge economy and this has led to renewed self-confidence and an empowerment of rural areas. New Zealand has become an incubator for reform policies in agriculture and the experience so far indicates that the farmers have made the right choice. Turkey may have very different conditions. It is part of the Old World and the strong traditions practised in the countryside may make it difficult to copy New Zealand policies into the Turkish context. Nevertheless, Turkey could learn from the experience of New Zealand and adopt certain policies that are applicable and avoid the mistakes that have been made in the course of the implementation of the reform policies in New Zealand. Yet, efforts to improve the connections between academia, the private sector and farmers in Turkey face strong resistance from those with vested interests, be they domestic (Ministry of Agriculture or politicians) or international (the EU and the World Bank) who benefit from the current agricultural policies or look at the situation largely from the perspective of a patron–client system (Akder, 2007).

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CONCLUSION We have argued that the Turkish agricultural policy reform has so far largely been guided by a social planning model that was derived from the principles of neoclassical welfare economics. The social planning model is implicit in the CAP of the EU and was the template used by the World Bank when it advised Turkey to reform its agricultural policy. The increasing awareness that the concept of multifunctional agriculture, as applied in the CAP and the World Bank policy advice, has not met the great expectations and has had many unintended side effects that tend to hamper rather than foster sustainable change in agriculture should induce Turkey to look elsewhere for theory as well as practice. This article recommends a study of new growth theory and how it is applied in New Zealand agricultural policy. New Zealand agricultural reform converted the role of government from that of a mere regulator of unsustainable agricultural change to a facilitator of sustainable change. New Zealand was able to renew itself, create more rural employment and render farmers more competitive and more environmentally responsible at the same time. The policies essentially facilitated rural empowerment True, as one of the largest exporters of dairy products, farmers face more environmental challenges than ever before, but there is at least an awareness that agriculture needs technological and economic change in order to become more sustainable (Aerni, 2007b). Turkey may not be comparable to New Zealand but it could use new growth theory in agricultural policy because it is most appropriate to promote rural empowerment and sustainable agriculture. The Turkish government could foster closer links between academia and rural entrepreneurs who would like to introduce a new product or a technological innovation to the countryside. Furthermore, the Turkish government could introduce a cross-compliance scheme for its direct payments that would give farmers the necessary incentives to invest in their children as well as in their own potential to become entrepreneurs and to contribute to rural development. Direct payments could be conditional upon the children being sent to school (especially the daughters). Special awards could be given for every child that completes secondary education and the highest award would be reserved for the offspring of families who manage to become self-employed and to generate new jobs. Such incentives could generate the human capital that is necessary to eventually make sustainable use of the new technologies offered by the knowledge economy, such as biotechnology and information technology, to make agriculture more resource-efficient and sustainable. Furthermore, the government could set up entrepreneurship hubs in villages and train the locals to use the new information and communication technologies to set up local business networks, create a marketplace for their own low-tech innovations and gain access to relevant information to allow them make the right business decisions. Last but not least, favorable regional tax and investment policies could be designed to attract firms that would bring in new goods, services and business know-how. Such a policy might be much better able to support farmers to adapt to a changing natural and economic environment since the local people would learn to see the opportunities rather than the problems of globalization, and they could generate their own revenues, which would make them more independent from outside support as well as more self-confident. Rural empowerment resulting from endogenous economic development is the best recipe to assist the people on the periphery and create a more sustainable future. The Rio Declaration emphasized this point, but unfortunately, it has

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been largely dropped from the range of topics that are assumed to be related to sustainable agriculture.

REFERENCES Aerni, P. (2007a) Agricultural biotechnology and its contribution to the knowledge economy. Advances in Biochemical Engineering/Biotechnology, 107, 69-96. Aerni, P. (2007b). Agriculture in Turkey: structural change, sustainability and EU compatibility. Editorial. International Journal of Agricultural Resources, Governance and Ecology, 6, 429–439. Aerni, P. (2008). A new approach to deal with the global food crisis. ATDF Journal, 5, 16– 32. Aerni, P. (2009). What is sustainable agriculture? Empirical evidence of diverging views in Switzerland and New Zealand. Ecological Economics, 68, 1872–1882. Akder, H. (2007). Policy Formation in the process of implementing agricultural reform in Turkey. International Journal of Agricultural Resources, Governance and Ecology 6(4/5), 514–532. Anderson, R.S., Levy, E., & Morisson, B.M. (1991). Rice science and development politics. research strategies and IRRI’s technologies confront Asian diversity (1950–1980). Oxford: Clarendon Press. Ansell, C., & Vogel. D. (2006). What’s the beef? The contested governance of European food safety. Cambridge, MA: MIT Press. Burrell, A.M., & Oskam, A.J. (Eds) (2005). Turkey and the European Union: Implications for agriculture, food and structural policy. Cambridge, MA: CABI Publishing. Cetindamar, D. (2007). Making use of agricultural biotechnology in Turkish agriculture: Why is it not yet happening? International Journal of Agricultural Resources, Governance and Ecology, 6(4/5)576–591. Chamberlin, B. (1996). Farming and subsidies: debunking the myths. Euroa Farms, New Zealand. Cochrane, W. W. (1979). The development of American agriculture: a historical analysis. Minneapolis: University of Minnesota Press. Cooper, J., Lipper, L. M., & Zilberman, D. (Eds) (2005). Agricultural Biodiversity and Biotechnology in Economic Development. New York: Springer Science and Business Media Inc. Desta, M. G. (2002). The Law of International Trade in Agricultural Products: From GATT 1947 to the WTO Agreement on Agriculture. London: Kluwer. Disch, D. (2006). Agrarpolitik im Wandel: Was heisst dies für die Umwelt? Ein Vergleich Schweiz-Österreich. Semesterarbeit. ETH Zürich. Grethe, H. (2007). The challenge of integrating EU and Turkish agricultural markets and policies. International Journal of Agricultural Resources, Governance and Ecology 6(4/5), 440–459. Heal, G. (1999). New strategies for the provision of public goods. In I. Kaul, I. Grunberg, & M. A. Stern, (Eds), Global Public Goods: International Cooperation in the 21st Century. New York: Oxford University Press.

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Karapinar, B. (2007). Rural transformation in Turkey 1980-2004: case studies from three regions. International Journal of Agricultural Resources, Governance and Ecology, 6(4/5)483–513. Kleijn, D., Baquero, R. A., Clough, Y., Díaz, M., Esteban, J., Fernández, F., Gabriel, D., Herzog, F., Holzschuh, A., Jöhl, R., Knop, E., Kruess, A., Marshall, E. J. P., SteffanDewenter, I., Tscharntke, T., Verhulst, J., West, T. M., & Yela, J. L. (2006). Mixed biodiversity benefits of agri-environment schemes in five European countries. Ecology Letters, 9, 243–254. Lovejoy, A. O. (1936). The Great Chain of Being: A Study of the History of an Idea. Cambridge: Harvard University Press. Ozertan, G., & Aerni, P. (2007). GM cotton and its possible contribution to environmental sustainability and rural development in Turkey. International Journal of Agricultural Resources, Governance and Ecology, 6(4/5)552–575. Rentsch, H. (Ed.) (2006). Der befreite Bauer: Anstösse für den agrarpolitischen Richtungswechsel. Zürich: Avenir Suisse. Verlag Neue Zürcher Zeitung. Rieder, P., & Anwander Phan-huy, S. (1994). Grundlagen der Agrarpolitik. Zürich: Vds Hochschulverlag, ETH Zürich. Romer, P. (1990). Endogenous Technological Change. Journal of Political Economy 98(5), 71-102. Romer, P. (1994). New goods, old theory, and the welfare costs of trade restrictions. Journal of Development Economics, 43, 5–38. Rosenberg (2000). Schumpeter and the Endogeneity of Technology. New York: Routledge. Samuleson, P. (1947). Foundations of Economic Analysis. Cambridge: Harvard University Press. Schumpeter, Joseph A. (1942). Capitalism, Socialism and Democracy. New York. Harper Collins. Solow, R. M. (1956). A Contribution to the theory of economic growth. Quarterly Journal of Economics, 70, 65–94. The Economist (2005). The poorest part of America. December 8, 2005. The Economist. (2006). The battle for brainpower. A Survey of talent. October 7, 2006. Warsh, D. (2006). Knowledge and the Wealth of Nations. New York: W.W. Norton. World Bank (2007). World Development Report 2008: Agriculture. Washington DC: World Bank.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 13

INTELLECTUAL PROPERTY RIGHTS AND INNOVATION: PROMOTING NEW TECHNOLOGIES IN TURKISH AGRICULTURE Baris Karapinar1 and Michelangelo Temmerman2 1

World Trade Institute, University of Bern, Switzerland World Trade Institute, University of Bern, Switzerland

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ABSTRACT Despite the robust evidence that rate of returns on investment in agricultural research and development is high in developing countries, such investment has not been a priority in Turkish agricultural policy. However, making rapid technological progress is vital for the sector if it is to recover from economic stagnation and improve the viability of its small farms. Furthermore, tackling new challenges such as climate change, environmental degradation, and benefiting from increasingly competitive international markets, requires new technologies tailored to local circumstances. Hence, this chapter highlights some new applications of biotechnology which offer a range of opportunities in this context. It also underlines the role of establishing an effective intellectual property rights (IPR) regime, as part of a wider institutional environment, in promoting innovation and technological progress in agriculture. It explains how domestically tailored IPR systems, benefiting from the flexibilities provided by international and regional intellectual property laws, which would allow Turkey to strike an optimum balance between the goals of enhancing the accessibility of new technologies to small farms and strengthening the incentives for the private sector to innovate new pro-small-farm technologies.

INTRODUCTION The average rate of returns on investment in agricultural research and development (R&D) is more than 40 per cent a year in developing countries (Alston and Pardey, 2006; World Bank, 2007). Despite such a high level of return, the scale of public and private R&D

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in Turkish agriculture has been dismally small, which is a major factor in explaining why the sector has been stagnant for a long time, as discussed in other chapters of this book (see Chapter 4 by Akder; Chapter 5 by Cakmak and Dudu; Chapter 10 by Karapinar). Rather than complete lack of progress, however, Turkey illustrates a case of asymmetrical development in different aspects of agricultural technology. Although it has not made significant progress in chemical and biological technology, it has been continuously mechanizing its agriculture, implying over-mechanization. As such, the Green Revolution, described as a package of high yielding crop varieties, sufficient use of chemical fertilizers, reliable water supply and smallscale mechanization has been asymmetrically implemented, which has in turn generated only a little progress in overcoming ecological constraints and improving productivity. Turkish agriculture now faces challenges that would require new technological developments extending beyond the conventional applications of the Green Revolution. Most notably, the small farms which dominate the sector need new adaptation technologies to address their increasing vulnerability to water deficiencies, droughts and heat waves, which are predicted to become even more frequent as a result of climate change (see Chapter 8 by Saysel, and Chapter 9 by Kadirbeyoglu and Ozertan). In addition, small farms need a range of new technologies designed for secondary products given that the sector has been experiencing a transition from the predominance of primary staple crops to higher value secondary products, such as fresh vegetables and fruits, livestock and dairy products. As discussed by Keyder and Yenal in Chapter 2 and by Cakmak and Dudu in Chapter 5, the number of farms engaging in contract farming and export oriented production has been growing rapidly. This trend requires R&D activities to focus not only on increasing yields, as conventional technologies do, but more importantly, on improving quality traits, such as product shape, color, taste, and shelf life. This is crucial for the competitiveness of Turkish farmers in international markets too. New applications of biotechnology offer unprecedented possibilities to make progress in this context. However, since Turkey has failed to benefit fully from the conventional applications of the Green Revolution, unlike for instance other developing countries in Southeast Asia, it faces a bigger challenge of catching up with the increasingly sophisticated biotechnology. The knowledge gap between developing countries and developed countries and between the public and the private sectors has been growing rapidly. In particular, the new technology is driven by the private sector and a few major biotech companies leading in research and innovation have substantial market dominance in the field. As for public-driven R&D alternatives, the new technology is more sophisticated than conventional technologies and requires higher levels of investment funding and hence strong political commitment on R&D which has been lacking in the Turkish policy context. Hence, there is a need to develop new institutional approaches in order to make new technologies designed for and available to small farms.

The extent of mechanical technology has grown more rapidly than any other component of Turkey‘s ‗Green Revolution‘. The total number of tractors rose from 440,000 in 1980 to almost 1 million in 2002 (FAOSTAT, 2006). This meant that for every 1000 hectares of arable land, there were 17 tractors in 1980 and 40 in 2002. The number of tractors per 1000 hectares is significantly higher in Turkey than either the averages for the world or for the developing countries. The use of chemical fertilizers, on the other hand, grew slowly, from an already low base of 57 kg/ha in 1980 to 73 kg/ha in 2002; this was below the average of developing countries, 115 kg/ha in 2002 (author‘s calculation based on total fertilizer consumption divided by acreage of arable land) (FAOSTAT, 2006).

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Against this background, intellectual property rights (IPRs) need to be investigated. Since they lie at the heart of innovation policies, IPRs are one of the major cogs in the wheel of technology developments. In the above described Turkish agricultural context, it appears essential to tailor IPRs so as to align them to as closely as possible to Turkey‘s innovation needs. Yet there are concerns that the accessibility of the existing technologies is impeded by the current IP regime leading to monopoly prices and hindering technology diffusion instead of stimulating it. The current dual approach of protecting innovation and encouraging investment in R&D—on the one hand through the patent system, which has been adopted to protect inventions of biotechnology, and on the other hand, the International Union for the Protection of New Varieties of Plants (UPOV) system of plant variety protection—is facing criticism. In particular, the entry of the patent system might limit small-scale farmers‘ access to biotechnology as well as hindering Turkish researchers‘ efforts towards developing new agricultural products. Much of the concern is rooted not so much in the application of the system as such, but rather in its users: the vast majority of patents held on agricultural products in Turkey appears to be in foreign hands. Analyzing the relevant IP legislation at the domestic and international levels, this chapter aims to identify and explain the interaction of IP protection with the development and accessibility of technology. As a Member of the WTO, Turkey is obliged to implement a patent system, also covering the agricultural sector, regulated by the WTO‘s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). However, the protection requirement is flexible enough in its essence and content to leave some room for Members to develop their own IPR regimes. We argue that the institutional challenge for Turkey is to design an efficient legal framework that is compatible with multilateral IPR regimes, but more importantly is capable of offering incentives specifically for pro-small-scale biotechnology research and local innovation in agriculture. Given the heterogeneity of its farming systems at the regional level, it is essential that Turkey designs and effectively implements its own IPR framework promoting both home-grown innovation and technology transfer. This chapter begins with an analysis of the opportunities that some of the new applications of biotechnology offer to small-scale farmers in developing countries. Second, it provides an overview of the physical, technical and institutional factors affecting the accessibility of biotechnology to smallholders. Third, it draws attention to the potential of alternative institutional approaches, namely public–private partnerships, to act as effective tools of pro-small-farm innovation. Finally, the focus moves to the assessment of the existing IP legislation in Turkey and the analysis of how IPRs can be domestically tailored within the existing international commitments so as to encourage the development of technologies that favor and are accessible to small-scale farmers.

PRO-SMALL-FARM TECHNOLOGY The challenges that the agricultural sector now faces require Turkey to extend its technology policy even beyond the conventional applications of the Green Revolution. Small farms dominating the sector need—given their increasing vulnerability to water deficiencies partly due to climate change as discussed by Saysel in Chapter 8—technological development of plant varieties with higher photosynthetic efficiency and enhanced resistance to abiotic

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stress, such as droughts and heat waves. As both the availability and the timing of water supplies are vital for cultivation of conventional semi-dwarf seeds and for the chemical fertilizers commonly used by Turkish farmers, their yield benefits in water deficit areas without irrigation are limited. Vast agricultural dry areas located in Central and Eastern Anatolia which are fully dependent on rainfall, amounting to only 500 ml per year or less, need new seed varieties with enhanced water efficiency and drought resistance. New biotechnological developments make available plant varieties with higher photosynthetic efficiency and enhanced resistance to abiotic stress, such as drought, excessive cold and heat. These new applications do not necessarily require the genetic modification of conventional varieties. Biotechnological tools, such as marker-aided selection, are used to improve the efficiency of conventional breeding techniques. It is now possible to identify the network of genes that is associated with tolerance of abiotic stress, which conventional breeding technology would only identify as a result of a far larger number of target traits, and hence trials would take much longer (Garg, 2002: 15898). For instance, these techniques have been used to identify traits in drought tolerant maize to be bred with other varieties which has improved the crop‘s biomass efficiency (i.e. a higher proportion of seed development compared to overall vegetation) (Nuffield Council on Bioethics, 2003: 21;Bruce, Edmeades, Barker, 2002: 13). Similar technological tools could be used to improve the biomass efficiency of wheat and barley in rainfed areas in Central and Eastern Anatolia which could raise the productivity of small farms producing cereals. Another major challenge facing Turkish smallholders is to diversify their production from primary staple crops to higher value crops with an increasing share of secondary products. Hence, going beyond the conventional focus of R&D on cereal crops, Turkish agriculture needs research and technological innovation in a wide range of high-value farm products. Fresh fruits and vegetables, processed food, and rapidly growing production of livestock and dairy products, reflecting the change in demand structure driven by a growing per capita disposable income, require Turkey to invest in technological improvements especially in secondary farm products. R&D initiatives in this field should not only aim at increasing productivity but, more importantly, improve quality standards (e.g. taste, size, shape, color, durability and shelf-life) and logistic infrastructure (including effective storage, packaging and monitoring). As is discussed by Jusoh in Chapter 19, export-oriented farmers face increasingly stringent standards (both public and private), which act barriers restricting access to European markets. Thus quality enhancing technology tools designed for a range of exports products (mainly fresh and dried fruits and vegetables) would improve their competitiveness on international markets. Molecular biotechnology in horticultural crops has the potential to offer improvements both in terms of cost reduction and achieving higher standards. For instance, research activities have identified a tomato gene associated with fruit softening, a discovery which could improve the precision of conventional breading techniques and lead to the development of new hybrid varieties with improved taste and longer shelf-life (Clark, Klee, Dandekar, 2004: 90). Similar improvements through advanced research are needed to improve the market value of Turkey‘s major exports, such as cherries, apricots, figs, cut flowers and nuts. However, the vast diversity of varieties grown by horticulturalists covering relatively small acreages makes it difficult to achieve economies of scale attractive enough to encourage the private sector to undertake state-of-the-art research activities (Alston, 2004: 86). Hence

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public research institutions should play a more active role and collaborate with the private sector in this field. Scientific research and innovation is also crucial for livestock products which have been increasing their market share in Turkey. Biotechnological tools such as molecular markers and quantitative trait loci (QTL), where genes associated with desirable traits are identified, and methods such as artificial insemination, embryo transfer and in vitro fertilization that are used to disseminate superior germ plasm, offer potential benefits for small-scale producers. Productivity growth through these scientific innovations is expected to come from improved quality and welfare of offspring, higher productivity and increased nutritional value of milk and meat products. However, although there is no reliable data on the extent of artificial insemination and embryo transfer in Turkey, it is estimated that the method is used in only a small fraction of livestock despite its extensive use in developed countries. Since many livestock varieties are unique to their local environment, each with its own nutrient efficiency, disease resistance and productivity (Madan, 2005: 133), there is an increasing need for more investment in biotechnology applications addressing the needs of small-scale producers of livestock in Turkey.

GROWING KNOWLEDGE GAP The access to new applications of biotechnology by small farms in developing countries is increasingly restricted—as there is a growing knowledge gap between, on the one hand, developed and developing countries and on the other hand, public and private research institutions (Rausser, Simon, Ameden, 2000: 512). In particular, the research and development activities and subsequent innovations and intellectual property rights have been dominated by the private sector, which holds key methodological knowledge necessary for further innovation. Some experts even argue that the increasing scientific gap between developing and developed countries and the dominance of the private sector is creating ―scientific apartheid‖ (Serageldin, 2001). The fact that the new biotechnology has become increasingly sophisticated and that scientific research and trials require heavy investment is excluding many developing countries with limited resources to spend on R&D. The US, the UK, Sweden, Australia and Switzerland are leading countries in the field, while only a few developing countries are making significant progress. Developing countries are lagging far behind developed countries in their investment in agricultural research. As shown in Tables I and II, the total spending on agricultural research in developing countries was around US$ 14 billion in 2000, as compared to US$ 23 billion in developed countries. The level of spending has been rising at the aggregate level, but only a few advanced developing countries account for this overall trend and Turkey is lagging far behind. Four major developing countries—India, China, Brazil and South Africa—account for more than half of the total spending by developing countries on public agricultural research. For instance Brazil spent 1.8% of its agricultural gross domestic product (GDP) on R&D in agriculture, more than doubling the developing country average of 0.8% (Alston and Pardey, 2006). Turkey invests a mere 0.8% of its GDP in R&D in general (OECD, 2008). Information on the Yet, it is far below the developed country average of 2.36% (Alston and Pardey, 2006:21).

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total amount of R&D spending on agriculture is scant; however, given the declining share of the sector in total GDP, it would be reasonable to estimate that Turkey invests only a small fraction of its overall R&D spending in agriculture. In 2005, according to OECD data, public spending on R&D in agriculture was around somewhat less than US$ 30 million, which accounted for only 0.2% of total farmer support (based on the Producer Support Estimate, PCE) (OECD, 2006). This indicates that innovation and technical progress is not a priority in agricultural policy-making, which is causing Turkey to lag behind not only developed countries but also other developing countries. The private sector plays an increasingly dominant role in the field of agricultural research; however, its role in developing countries is not prominent. In 2000, only 8% of spending on research in developing countries, amounting to around US$ 1 billion, was by the private sector. In developed countries, on the other hand, the private sector was responsible for 55% of the total spending, amounting to almost US$ 13 billion (Alston and Pardey, 2006). The increasing level of private sector investment in agricultural research seems to be concentrated in developed countries. As for agricultural biotechnology research in particular, the increasing knowledge gap is even more apparent. The world‘s top ten multinational crop-science companies spend around US$ 3 billion per year on agricultural biotech research. Although there is no reliable data on private sector investment in biotechnology research in developing countries, its total volume is estimated to be in the range of US$ 90–460 million (Pingali and Raney, 2005: 6), substantially lower than private sector spending on biotech research in developed countries. Similarly, the amount of public resources devoted to biotech research at the international level is far from adequate. The Consultative Group on International Agricultural Research (CGIAR), of which Turkey is a member, undertakes research activities with the aim of benefiting farmers in developing countries, and invests around US$ 30 million in biotechnology, amounting to only 7% of its annual budget (World Bank, 2007:178). Small-scale farmers in developing countries are particularly disadvantaged by the emerging knowledge gap—as leading biotech companies dominating the field are inclined to design their products to meet the needs of large-scale farms in developed countries. There are a number of reasons for this. First, given the relatively low capital endowments of small farms, it is only natural that a profit-propelled industry is interested in serving the interests of those high-income farms with a propensity to buy new technologies. The fixed costs of biotech research are often too high to be recouped in small markets (Byerlee and Fischer, 2001: 7). Second, since large farms are the main target of the industry, the companies invest more in capital and labor saving technologies than they do in water-efficient and extranutritious varieties, which are more relevant for small-scale farms in developing countries. Third, in developed countries, there has been a trend towards shifting research priorities from productivity to quality attributes, reflecting the preferences of affluent consumers (e.g. organic products and functional foodstuff) (Pardey, Alston, and Piggott, 2006). Fourth, major private companies tend to protect the potential gains of their innovations through contract farming. Since the transaction costs of dealing with small farms are extremely high compared to those of dealing with large ones, private companies tend to target medium- and large-scale farms in developed countries.

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Table I. Public- and private-sector expenditure on agricultural research, 2000*. Expenditure Share of total (million 2000 international dollars) expenditure (%) Public Private Public Private Total 12,909 1,108 14,089 10,191 12,577 22,767 23,100 13,756 36,856 Source: Alston and Pardey 2006, p.22. *Data are provisional estimates. See the source for details.

Developing Industrialized Total

91.6 44.8 62.7

8.4 55.2 37.3

Table II. Global public spending on agricultural research, 1981–2000*. Expenditures (million 2000 international dollars) Developing countries Sub-Saharan Africa China Asia and Pacific Latin America and the Caribbean Middle East and North Africa Developed countries Total

1981

1991

2000

6,904 1,196 1,049 3,047 1,897 764 8,293 15,197

9,459 1,365 1,733 4,847 2,107 1,139 10,534 19,992

12,819 1,461 3,150 7,523 2,454 1,382 10,191 23,010

Source: Alston and Pardey 2006, p.19. * Data are provisional estimates and exclude Eastern Europe and countries of the former Soviet Union. See the source for details.

Public–Private Partnerships (PPPs) Since the era of the ―welfare state‖ in the 1970s and early 1980s and that of ―neoliberalism‖ during the 1990s, there has been a significant shift in the political and policy approaches to institutional development. The state-led centralist approach to scientific research and technological innovation of the Green Revolution is no longer considered feasible. In many developing countries, public research institutions, which were never designed to be competitive, find it increasingly difficult to obtain adequate resources and expertise to innovate in a rapidly developing field of technology. They lack the market knowledge and entrepreneurial drive to respond to today‘s world of extremely diversified and sophisticated agricultural markets. Furthermore, the original design of these institutions was based on the conventional neo-classical assumption that there is a linear path from investment and research to innovation and its subsequent adoption by farmers (Hall, Bockett, Taylor, Sivamohan, and Clark, 2001: 785). This reasoning has been called into question as being simplistic and ineffective. The more recent ―process‖ approach proposes that the technological innovation is affected by many dynamic factors leading to setbacks and irregularities requiring micro-management and extensive farmer participation (Hall, et al., 2001: 785). Hence, there is an increasing need for developing countries to move away from the conventional institutional approaches that consider scientific research and technological

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innovation as explicit ―public goods‖ achievable through linear pathways which the welfare state has the sole responsibility to provide. On the other hand, the neo-liberal approach, namely, ―let the market decide‖ has also proven problematic. There are serious asymmetry problems causing market failures, indicating that freeing market mechanisms does not automatically lead to higher levels of private sector spending on R&D. Similar to the Turkish experience, in many developing countries, the market-led reforms of the 1980s and 1990s resulted in the privatization or dismantling of many state-run agricultural research and extension institutions, or producer cooperatives providing major services to smallholders. The withdrawal of the state has left a large vacuum that the private sector is unable or unwilling to fill (IFAD, 2001:168). Thus, it is argued that the neo-liberal approach to agricultural services, including scientific research and extension, as indiscriminate ―private goods‖ that should fall within the realm of the private sector, has failed to stimulate technological innovation in developing countries. In this context, PPPs offer new institutional opportunities for enhancing biotechnological research. There are various types of institutional design for PPPs. In general, public institutions and the private sector pool their resources for research, which should then benefit both the private sector and the general public. The private sector usually provides its methodological knowledge, financial resources and marketing expertise while the public sector provides institutional and infrastructural support, including supportive legislation and the use of testing facilities and germ plasm varieties. In this way, private companies can gain access to large domestic agricultural markets. PPPs can also help public institutions to convert their research outputs into end-user oriented products. They can also promote private sector development in countries in which the agricultural sectors are overcrowded by state-owned monopolies (Spielman, Hartwich, Von Grebmer, 2007:34). There have been important examples of PPPs in developing countries. The International Service for the Acquisition of Agri-Biotech Applications (ISAAA) is a significant example of PPPs at the international level. Through its regional operations in Asia, Africa and Latin America, it acts as an intermediary between developed country companies and public institutions in developing countries (Kameri-Mbote, Wafula, and Clark, 2001: 11-12). It focuses on horticultural technology which is increasingly important for smallholders as discussed above. Similarly, the CGIAR has also entered into some partnerships with the private sector. Effective PPPs have been established through which public resources are provided in exchange for a non-exclusive royalty-free license for the technology developed. In this context, Turkey could bridge its growing technology and knowledge gap in agriculture by revising its technology policy, reforming its R&D institutions and forging successful PPPs designed for the purpose of conducting cutting edge research with the explicit goal of enduser oriented innovation.

INTELLECTUAL PROPERTY AND AGRICULTURE Intellectual property rights play an important role in technology development policies. They constitute an essential aspect of the creation of an environment conducive to innovative research and investment decisions. They offer a reward to innovators by making it illegal to copy their protected products for a limited (patents) or undefined period (trademarks).

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Intellectual property rights of various types play an increasing role on agricultural markets too. Traditionally, trademarks were used mainly to protect processed agricultural products. Today they play a role in breeding activities as well. Brands like ―Holstein‖ beef are established trademarks with great commercial value. Geographical indications+ play a role similar to that of trademarks. For instance, Turkey is an important beneficiary of geographical indications with many examples such as Aegean Cotton and the Malatya Apricots. More recently, copyrights§ were introduced in the field most notably those protecting animal breeding related software schemes. The impact of IP protection on agriculture has grown over the past decades. Along with increasingly numerous applications of biotechnology in agriculture, patent rights€ have made their entry into the previously patent-free agricultural market. Jointly with the emergence of biotechnology and the technical character of its inventions, patent systems all over the world were progressively opened and adapted to cover biotech inventions in the 1980s± and 1990s.¥ Patents, however, not only apply to genetically engineered or transgenic animals, but also to a range of processes and products of the ―biotech‖ type. Patents on breeding methods involving marker selection steps, for instance, will extend over the animals and their progeny as resulting from the breeding method. These animals, however, will not have been genetically altered, but are being crossed and selected on the basis of a biotech tool: marker selection. Patents are time-limited negative£ monopoly rights, established with the rationale of fostering technological advancement. The system is designed to incentivize investment into innovative research, by the dual effect of promising a monopoly right (to new, non-obvious and useful inventions) and the forced disclosure of such inventions in return (so as to avoid secrecy and foster the spread of knowledge to the public domain). For agriculture, as much as for any other sector, the major effect of patent law lies in the protection and attraction of investments. IPRs of the ―patent type‖, therefore, have a strong effect on the access of smallholders to products and services developed by using new technology tools (see Box I). In agro-biotech, the issuance of patents has contributed to a situation where the top ten multinational life science corporations own a large proportion of the agro-biotech patents

Under the TRIPS Agreement, a trademark is defined as: ‗Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings ... . Such signs, in particular words including personal names, letters, numerals, figurative elements and combinations of colours as well as any combination of such signs, shall be eligible for registration as trademarks‘ (Article 15 of the TRIPS Agreement). + Under the TRIPS Agreement, geographical indications are referred to as ‗indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin‘ (Article 22 of the TRIPS Agreement). § Copyrights are time limited (yet long-lasting) IPRs granted to authors and artists of creative expressions against unauthorized reproduction. € Patents are traditionally granted to inventions fulfilling the patentability criteria of novelty, inventiveness, industrial application and sufficient disclosure. Not forming part of the regulatory framework of safety regulations, patents do not confer the right to exploit, to commercialize or even to use a given invention, but only grant the right to the patent holder to exclude others from doing so. ± For instance: United States Supreme Court, Diamond v. Chakrabarty, 16 June 1980, 447 US 303. ¥ Cf. Directive 98/44 of the European Parliament and of the Council, on the legal protection of biotechnological inventions, July 6, 1998, Official Journal of the European Communities, July 30 1998, L 213/13. (Hereafter ‗Directive 98/44/EC‘). £ A patent does not grant permission to use the invention, but only to exclude others from ―making, using, offering for sale, selling, or importing for these purposes‖ the patented matter (see Article 28 TRIPS Agreement).

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registered mainly in developed countries. However, the effects of IPRs on investment and innovation can differ significantly from one country to another as territoriality of IPRs still prevails despite international efforts to harmonize the matter. Hence it is essential for developing countries like Turkey to make sure that their IPRs system is adapted to their agricultural environment: small-scale farming. Box I. Access impact of patents in agriculture. A change in pricing (monopoly prices) A shift in control (possibly between domestic and foreign companies) A changing ownership rule over eventual progeny of patent protected animals or plants A changing market structure The disclosure of the inventions A greater willingness to export and transfer products to countries providing effective IP protection An additional incentive for investment in the creation of diverse products

Along with patents, so called sui generis IP protection systems have been established in many jurisdictions.+ Most of these are characterized by features from traditional patent systems adjusted to fit the specific sector for which they were developed. The most notable example is plant biology, which has one of the best known sui generis systems of IP protection: Plant Breeders‘ Rights (PBRs). PBRs are either of a national form or conform to the standards set by the International Convention for the Protection of New Varieties of Plants (the UPOV Convention ). They usually provide IP protection for plant varieties that are found to be novel, distinct, uniform and stable after a two-year period of testing.+ It differs from the patent system which requires the disclosure of the invention and also works with a requirement of non-obviousness, both lacking under the PBR/UPOV system. Hence it is argued that while the patent system is meant to protect innovation, PBRs protect investment A recent study examining ownership of more than 14,000 international patents for agricultural plant biotechnologies granted (between 1981 and 2001) in the United States, Europe and Japan and the International Patent Cooperation Treaty indicates that public research institutions (universities, government institutions etc) owned 24 per cent of all patents in agricultural biotechnology. This is higher (33 per cent) in Patent Cooperation Treaty filing. On the other hand, the private sector, which is dominated by multinational life science corporations, owns 74 per cent of agricultural biotech patents. For instance, 40 per cent of agro-biotech patents in the US are owned by the top five corporations. Monsanto and DuPont own the biggest individual shares with 14 and 13 per cent respectively (Graff, Cullen, Bradford, Zilberman and Bennett, 2003). + Sui generis system literally means system of its own kind. Union Internationale pour la Protection des Obtentions Vegetales, International Convention for the Protection of New Varieties of Plants, 2 December 1961, as Revised at Geneva on 10 November 1972, on 23 October 1978, and on 19 March 1991, 1861 United Nations Treaty Series 281, available online at: http://www.upov.int/en/publications/conventions/1991/act1991.htm (last visited 2 October 2007), ‗UPOV Convention 1991‘. + Article 5 of the UPOV 1991 Convention.

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(Llewelyn, 2003: 330); both systems may nonetheless claim to contribute to investment in innovative activities. The UPOV system provides for a so-called farmer‘s privilege, enabling farmers to save and re-use harvested seeds, and embodies a breeder‘s exemption, allowing the development of new plant varieties based upon an existing, protected, variety. Plant Breeder‘s Rights under the UPOV Convention do not address the protection of nucleic (―gene‖) sequences, nor any plant related processes. As such, PBRs are designed for products (plant varieties) of low-tech innovation rather than biotechnological developments. ―Petty patents‖ or ―utility models‖, can also constitute a sui generis option without being limited to a certain sector. In Australia, for example, petty patents function together with the traditional patent system offering less but cheaper and easier-to-obtain protection. The criterion of novelty in this system is only assessed within Australia, as opposed to worldwide as for traditional patents, but a petty patent will only last for six years, as opposed to the traditional 20-year patent protection term. Petty patents, in much the same way as PBRs, are mostly meant to protect low-tech innovation. In the context of creating PPPs, IPRs can also play a role. First, at the very beginning of the PPP, IP issues may affect the decision to establish a PPP. The choice of the concrete private actor may depend on patent landscapes, need for licences and cross-licensing opportunities. Second, IPRs and licensing requirements need to be evaluated throughout the existence of the PPP—as right holders might change and patents might either appear or elapse. Third, is the issue of which partner will have the IPRs on the end-product, how it will be licensed, and how strongly it will be protected. All these issues can be addressed at both the contractual and law levels. Both of these levels are linked in defining the strength of the partnership incentive that will be provided and the strength of protection foreseen, and hence affect the post-development accessibility of inventions made through the PPP.

Intellectual Property in Turkey: Local Policies and International Obligations Turkey runs an IP system combining patents for biotechnological products with PBRs for plant varieties as set in the UPOV 1991 Convention.§ In designing a future IP policy for agricultural development within this framework, two major issues need to be taken into account: the extension of patent protection over non-biotechnological, ―traditional‖ innovation; and the possibility of a sui generis IP protection system for animal breeds. It must furthermore be ensured, more generally, that the level and strength of protection are commensurate with the level of economic development of the country. Many elements play a role in this relationship. Duration of, and exceptions to, the rights conferred are of course at the centre of this debate, but their initial creation (sui generis) and the scope of their subject matter are also relevant. Assuring adequate protection is finally also an issue of balancing IP rights with a proper competition policy and legal framework. As such, IPRs can be tailored to local needs in several ways. However, the flexibilities are limited by Turkey‘s international

§ Turkey joined ‗UPOV 1991‘ in 2007 (entry into force the November 18 2007); see: UPOV, Turkey Accedes to the UPOV Convention, UPOV Press Release No. 74, 18 October 2007, available at: http://www.upov.int/en/news/pressroom/pdf/pr74.pdf (last visited 28 August 2008).

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and regional obligations, most notably by the WTO TRIPS Agreement and the European Patent Convention+ (EPC). The major international treaty binding Turkey in the field of IP law is the above mentioned WTO TRIPS Agreement, which foresees minimal standards for the protection of patents, trademarks, geographical indications, industrial designs, and copyrights among others. While developed countries had to implement the Agreement by 1 January 1995, developing countries such as Turkey§ enjoyed an extended period of implementation up to 1 January 2005.± Turkey, as a Member of the WTO since its creation in 1994, has thus been fully bound by the TRIPS Agreement since 2005 and has progressively adapted its patent law to meet the TRIPS requirements over the past decade. Since 1999, for instance, pharmaceuticals—previously excluded from patentability— have been declared to be patentable just like any other type of invention. As the TRIPS Agreement is embedded in the WTO dispute settlement system, it enjoys a strong enforcement mechanism. In fact, for the first time in history, disputes over IPRs are being brought before an international court. However, based on this foundation, the agreement allows for high levels of flexibilities and exclusions, particularly in the field of biotechnology. The TRIPS Agreement sets only minimum standards and therefore leaves considerable leeway for local adjustments. In relation to patents it rules that rights ought to be available for any type of new, inventive and industrially applicable inventions,€ whether products or processes, in all fields of technology, for a minimum term of 20 years,± and without discrimination as to the field of technology, the place of invention, or whether products are imported or locally produced. In the field of biotechnology and living matter, TRIPS only compels members to qualify micro-organisms, microbiological processes and non-biological processes as patentable, while explicitly leaving the choice open to national authorities as to whether or not to grant patents for plants, for animals, for essentially biological processes for the production of plant and animals,¥ for diagnostic, therapeutic and surgical methods for the treatment of (humans or) animals, and for inventions whose commercial exploitation would be contrary to the ordre public+ or morality§ (Temmerman,

Agreement on Trade Related Aspects of Intellectual Property Protection, Annex IC to the Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994, 33 International Legal Material 1197 (1994). + Convention on the Grant of European Patents, Munich, 3 October 1973, available online at: http://www.europeanpatent-office.org/epc/pdf_e.htm (Hereafter ‗EPC‘; last visited 9 September 2006). § The classification as a either a developed or a developing country does not depend upon strict WTO criteria, but on (challengeable) self designation. ± Article 65 TRIPS Agreement. € Article 27 § 1 TRIPS Agreement. ± Article 33 TRIPS Agreement ¥ Article 27 § 3 (b) TRIPS Agreement reads: ‗Members may also exclude from patentability: (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof‘. Article 27 § 3 (a) of the TRIPS Agreement, which reads: ‘Members may also exclude from patentability: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals‘. + This concept is generally linked to safety issues. In fact, the Technical Board of Appeal of the European Patent Office established the principle that claimed subject matter that is likely to seriously prejudice the environment should be excluded from patentability for being contrary to the ordre public (Technical Board of Appeal of the European Patent Office, Plant cells/PLANT GENETIC SYSTEMS, 21 February 1995, T 356/93, Official Journal of the European Patent Office (1995) 545, § 18). Obviously, issues of biosafety and biodiversity immediately come to mind. Yet it remains to be seen to what extent patent examiners can assess safety.

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2007: 76-105).± Furthermore, up to now, developing and least developed countries seem to receive a de facto freedom when it comes to TRIPS implementations since no developed country has ever launched a WTO case against them, with the exception of China. The second major international obligation limiting Turkey‘s domestic IP-tailoring is the European Patent Convention (EPC), as developed under the auspices of the European Patent Organization (EPO). The European Patent Office is not an institution of the EU, and the EU is not limited by the EPO to enact legislation in the field of patent law.€ Consequently, EPOmembership is not limited to EU Member States¥ and EU Member States are not automatically members of the EPC. Both the EPO and the EU however cooperate with one another by different mechanisms. Under the EPO system, patentability issues are taken up through a simplified, single European procedure, whereas issues of scope of claims, scope of rights, limitations, infringement or validity remain under national jurisdiction. Hence, a patent granted by the EPO might very well enjoy full protection in Germany, but at the same time be limited in its scope in the Netherlands, and be held invalid in the UK≠: considerable leeway to tailor locally adapted rules appears to be left here as well. As for agriculture, the European Patent Convention excludes plant and animal varieties from patentability.£ In jurisprudence, this provision was however limited to apply only to the taxonomical rank of variety, allowing plants and animals to be patentable as long as the invention affects a lower or higher taxonomical rank.× Similarly, essentially biological processes for the production of plants and animals are being excluded from patentability under the European Patent Convention, but the exclusion has been limited in jurisprudence to cover only production methods that do not have a single technical step: the word ―essentially‖ has been reduced to ―one‖. Under the European Patent Convention, Turkey thus appears to have lost much of its room for maneuver over the patentability of agricultural and biotechnological inventions. It remains entirely free, however, to regulate scope of claims, scope of rights, limitations, infringement or validity matters. § Under EPO case law, the concept of morality is a belief about whether a certain behaviour is right or wrong, based on the totality of norms that are deeply rooted within European society and civilization (see Technical Board of Appeal of the European Patent Office, Plant cells/PLANT GENETIC SYSTEMS, 21 February 1995, T 356/93, Official Journal of the European Patent Office (1995) 545, § 6). ± Article 27 § 3 TRIPS reads: ‘Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law‘. € The competence of the European Community to enact in the field of patents has been recognized in the context of patent law contributing to one of the objectives of the Community such as the free movement of goods or the non-distortion of competition. Cf. European Court of Justice, Spain v. Council, July 13 1995, C-350/92, ECR I-1985 at § 27, and Opinion 1/94, November 15 1994, ECR I-5267, at § 59. ¥ The ‗EPO zone‘ includes all EU-countries plus Bulgaria, Switzerland, Hungary, Iceland and Norway. ≠ The fact that the European Patent Convention does not address post-grant issues is rooted in a failing political consensus. The second part of what was meant to become an integrated European patent system, the Community Patent Convention, was indeed intended to cover substantial patent law. For various reasons of predominating national (protectionist; sovereignty) interests, but also because of certain weaknesses in the Treaty itself, however, the Community Patent Convention, despite continuing efforts, has never entered into force. £ Article 53 (b) EPC. × In relation to animals: Technical Board of Appeal in Technical Board of Appeal of the European Patent Office, Transgenic Animals/HARVARD, 6 July 2004, T 0315/03.In relation to plants: Enlarged Board of Appeal of the European Patent Office, Transgenic Plant/NOVARTIS II, 20 December 1999, G1/98. Enlarged Board of Appeal of the European Patent Office, Transgenic Plant/NOVARTIS II, December 20 1999, G1/98.

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Today, Turkish patent law reflects both TRIPS and EPO principles. For instance, it foresees an exclusion from patentability of ―inventions whose subject matter is contrary to the public order or to morality as is generally accepted‖ and excludes ―plant and animal varieties/species or processes for breeding/plant or animal varieties/species, based mainly on biological grounds‖.+ Both are an almost literal implementation of what the EPC has ruled in this regard, and the first is part of the TRIPS Agreement as well. The TRIPS Agreement‘s influence is also found in a remarkable, explicit non-discrimination obligation; a copy/paste from Article 27 § 1 TRIPS.§ A remarkable provision furthermore explicitly grants direct effect and primacy to patent rules stemming from Turkey‘s international obligations.£ As under the European Patent System, essentially biological processes and inventions to the taxonomical rank of plant and animal variety/species will be thus excluded from patentability. In terms of scope of rights and limitations, Turkish patent law provides in a rather large research exemption and in an explicit provision linking patent law and practices of unfair competition, yet has not enacted a farmers‘ privilege, purpose bound protection, specific rules for PPPs or market segmentation mechanisms. The Turkish research exemption appears very broad indeed, excluding from patent infringement ―acts involving, for experimental purposes, the invention, subject matter of a patent‖.≠ Since it does not specify whether this involves only acts performed on the inventions or includes acts with the invention (using the protected subject matter as a research tool), the wide notion of acts involving the invention appears to cover both. A link to unfair competition furthermore enables patent courts in Turkey to condemn patent holders to license their technology if they are found to be violating the general provisions on unfair competition while putting their patent to use.× The Turkish patent system also foresees in above described utility patents,¥ aiming to protect low-tech innovation through a simpler and cheaper procedure than that applicable to ―real‖ patents, but which would provide weaker protection. These instruments should be used to stimulate local innovation. To a large extent, this is also a matter of raising awareness as to the existence of the research exemption for instance, but it also entails revising Turkish patent law to include provisions for a farmers' privilege, among others.

+ Article 6 of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995). § Article 73 of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995): ‘The holder of a patent shall benefit from the right it confers without differentiating between the place of the invention, its field of technology and whether the concerned products are imported or of domestic production‘. £ See Article 4 of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995): ‘Where International Agreements having entered into force according to the laws of the Republic of Turkey, contain provisions which are preferential/more favorable to those of this present Decree-Law, the persons referred to in Article 2 may request to benefit from such preferential/more favorable provisions‘. ≠ Article 75 (b) of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995). × Article 93 of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995). ¥ Articles 154-170 (‗Utility Model Certificates‘) of Decree Law 551 Pertaining to the Legal Protection of Patent Rights (in force since June 27 1995).

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Trends in Agricultural and Biotechnological Patents in Turkey There have been some recent increases in the number of patents granted in the field of agriculture; however, their share of the total has been declining for the past decade. Between 1998 and 2008, it fell from 9.2% to 4.7%. This indicates a relative deficiency in innovation and technological development in this sector, in light of the fact that the sector‘s contribution to GDP is still approximately 10% and it employs more that 25% of the total labour force. As shown in Figure I, since 2003, however, the number of patents registered in the sector has seen a steep rise from around 75 per year to 250 per year. On the other hand, the vast majority of patents have been registered by foreigners. As Figure II illustrates, around 90% of all patents in the agricultural sector were registered by non-residents. This shows that the level of home-grown innovation and technology progress is weak in Turkey, and that there is an increasing dominance of new technologies by foreign players. Growth Rate (%)

Patent Grants

250 225

Number of Grants

200 175 97.9

150 125

45.2

100

45.3

33.9 18.8

75

4.1

0.0

50 -5.7

25

-21.5

0

-38.2

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Source: Compiled by authors, based on Turkish Patent Institute (Turkish Patent Institute 2009a)

Resident and Non-Resident Share (%)

Figure I. Trends in agricultural patent grants (IPC Classification), 1998–2008. 100%

75%

50%

25%

0% 1998

1999

2000

2001

2002

2003

Non-resident Grants

2004

2005

2006

2007

2008

Resident Grants

Source: Compiled by authors, based on Turkish Patent Institute (2009a) Figure II. Distribution of agricultural patents granted to residents and non-residents (IPC Classification), 1998–2008.

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As for biotechnology patents, the number of grants has been increasing from a low base, but the outlook for home-grown innovation is still dismal. Similar to the figures for patents in the field of agriculture in general, the number of patents granted in biotechnology (based on IPC classification) has risen in recent years. Including agricultural and non-agricultural applications, there were only 50 patents granted in 2000. This increased to approximately 200 in 2007 (see Figure III below). However, almost 99% percent of all patents granted are registered by non-residential applicants (see Figure IV), implying that domestic innovation in the field of biotechnology, both agricultural and non-agricultural, is almost nonexistent. Growth Rate (%)

Patent Grants

250 225

Number of Grants

200 117.9

175 150

81.3

81.3

125

57.4

100 75

8.6

50 -7.4

25 -31.9

0 1998

1999

2000

2001

-29.3

-31.7

2002

2003

2004

2005

2006

2007

2008

Source: Compiled by authors, based on Turkish Patent Institute (2009a)

Resident and Non-Resident Share (%)

Figure III. Trends in grants of biotechnology patents (IPC Classification), 1998–2008.

100%

75%

50%

25%

0% 1998 1999 2000 2001

2002 2003 2004

Non-resident Grants

2005 2006 2007 2008

Resident Grants

Source: Compiled by authors, based on Turkish Patent Institute (2009a) Figure IV. Distribution of biotechnology patent granted to residents and non-residents (IPC Classification), 1998–2008.

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On the other hand, the number of Geographical Indications (GIs) registered in Turkey has been increasing too. As shown in Table III, more than 110 GIs have been registered since 1996, the majority of which are related to agricultural products. Table III. Trends in geographical indicators (GIs) in Turkey (1996–2008).

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total

Number of GI grants 24 1 0 2 3 8 19 14 10 5 5 10 12 113

Source: Turkish Patent Institute (Turkish Patent Institute 2009b)

IPRs in Turkey: Tailoring to Local Needs in Concreto Whether using sui generis systems or patents there is a need to design an institutional framework tailored to resolving the trade-off between ensuring ease of accessibility for the small farmers while providing adequate incentives to the private sector to invest in innovation and technology transfer. This requires new policy approaches designed to provide more institutional incentives that would encourage the private sector, both local and international, to invest in agriculture. Turkey faces a particular legal situation: not only is it a member to the European Patent Office, it also adjusts much of its legislation to match the EU norms. Therefore, rather than copying IP laws from the EU, Turkey should benefit from the flexibilities provided under TRIPS, UPOV and regional intellectual property rights conventions to tailor IPR frameworks to its local specificities. Several concrete policy options could be specified to enable Turkey to design its own legal framework without breaching its international obligations: Given the necessity to provide a sound legal framework for innovations investments (whether domestic or foreign investments), in keeping with the limited possibilities left by the European Patent Convention, when tailoring a locally adapted IP system, the focus should be on the establishment of exceptions and limitations to the patent rights (and thus not on the basic possibility of patenting animals, plants and related inventions) as well as on sui generis possibilities to cover low-tech innovations. Turkey could identify an optimum composition Since the year 2000.

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which would balance rights and obligations so as to attain an effective IP climate which would promote innovation and technological transfer in agriculture. Turkey should benefit from patent right limitations such as the research exemption, the farmers‘ privilege and so-called purpose bound protection. Under the research exemption, free access to patented inventions is secured as long as the protected invention is being used for research purposes. Given the poor level of development of local research, and the foreign origin of most patent holders, it is in Turkey‘s interest to establish wide research exemptions, eventually also including research tools. Similarly, Turkey should use extensive farmers‘ privileges, offering the possibility to farmers to re-use their harvest stemming from protected crops to being used as seeds on their own field again. A small remuneration to patent holders might still be required but small-scale farmers should be exempt from this obligation. In Europe, a farmers‘ privilege has been established under patent law for both plants and animals.+ Given that the majority of Turkish farmers save seeds for replanting,§ the use of extensive farmers‘ privilege appears essential for Turkey‘s small-scale agriculture. Purpose bound protection, finally, is of specific importance in patenting gene sequences. It brings an exemption to what is called ―absolute compound protection‖ (application to all functions of a given compound, in spite of the disclosure of only one). In the context of biotechnology, certain European countries, including France and Germany, +have implemented such a limitation. All such limitations arguably meet the criteria established under Article 30 of the TRIPS Agreement (exceptions to the rights) as interpreted in WTO jurisprudence, depending on the concrete scope€. As long as they are not being drafted (de jure) or being specifically aimed at one sector only (de facto), the non-discrimination provision furthermore appears to be respected as well (Article 27 § 1 TRIPS). As already mentioned, nothing under the European Patent Convention prevents such measures. Hence Turkey could benefit from such flexibilities. On the other hand, the establishment of sui generis systems for low-tech innovation in the livestock sector and eventually also in relation to PPPs, might also be envisaged. Animal varieties are being excluded from patentability in Turkey, in line with the European Patent Convention. As a result however, no IP system covers (low-tech) advancement in this field. Although this partly stems from the nature of animal breeds and livestock agriculture itself (animals are less stable over the generations than plants and the agricultural focus is often more centered on individual animal than on breeds or species), there is clearly a necessity for sui generis systems incentivizing breed differentiation. There is a high degree of genetic uniformity of poultry on the market and increasingly also of other livestock. Furthermore, concentration of businesses involved in these sub-sectors + Cf. Article 11 § 1 Directive 98/44/EC: ‗By way of derogation from Articles 8 and 9, the sale or other form of commercialisation of plant propagating material to a farmer by the holder of the patent or with his consent for agricultural use implies authorisation for the farmer to use the product of his harvest for propagation or multiplication by him on his own farm, the extent and conditions of this derogation corresponding to those under Article 14 of Regulation (EC) No 2100/94.‘ § Around 80% of farmers in developing countries save seeds for replanting (Mueller, 2006). Article L613-2-1 of the ‗Code sur la propriété intellectuelle‘. + Paragraph 1a (4) of the German Patentgesetz. € World Trade Organization Dispute Settlement Body, Panel Report Canada - Patent Protection Pharmaceutical Products, 7 April 2000, WT/DS114/R.

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is much higher than is the case in plant biotechnology for instance (a sector qualified as highly concentrated) (Gura, 2008). The loss of adaptive traits and local breeds is striking. A system aimed at incentivizing the (further) development and conservation of locally adapted breeds would help to ensure genetic diversity, adaptation to climate change and food security. It would place new players on the highly concentrated market in a stronger position to compete. Similarly, a specific IP system for inventions coming out of PPPs could be envisaged. Such a system could offer a better approach to promote innovation and access to pro-smallfarm technology in Turkey. It would provide a harmonized institutional framework with the potential for lowering transaction costs, as compared to exclusively contract-driven PPPs. It would offer legal guidance for public institutes which are often not equipped to deal with IPrelated issues. More importantly, through an eventually embedded market segmentation structure and enhanced smallholder privileges, as well as its flexible term of operation and increased incentive for the private sector to invest and participate in PPPs, it would strike a better balance between the tasks of promoting research investment and diffusion of pro-smallfarm technology (Karapinar and Temmerman, 2008).

CONCLUSION Despite the robust evidence that rate of returns on investment in agricultural R&D is high in developing countries, investment in R&D has not been a priority in Turkish agricultural policy. However, making rapid technological progress is vital for the sector if it is to recover from economic stagnation and improve the viability of its small farms. Furthermore, tackling new challenges such as climate change, environmental degradation, and benefiting from increasingly competitive international markets, requires new technologies tailored to local circumstances. New applications of biotechnology offer range of opportunities to address these challenges. Without necessarily involving genetic modification, new methods and tools could enhance the precision, economic efficiency, and environmental impact of conventional applications. They could address the needs of small farms in unfavorable agro-ecologies where ecological frontiers have been reached and the marginal benefits of conventional technology have been exhausted. Through more robust staple crop varieties, which are tolerant to abiotic stresses, small farms in ecologically unfavorable areas, such as those located in arid and semi-arid regions of Central and Eastern Anatolia, could improve their productivity. Research into high-value agricultural commodities such as horticultural crops and livestock, which are becoming increasingly important sources of income for smallholders and of export revenue for the sector as a whole, is also promising—as new applications of biotechnology are rapidly extending technical frontiers to harness innovation in a range of high-value agricultural commodities. The technical availability of new technologies, however, is no guarantee of their availability and accessibility to farmers, which can be established only with the right economic incentives and effective institutional structures in place. Given Turkey‘s agricultural research spending figures, as discussed above, it faces a widening knowledge gap with developed and other emerging developing countries. Furthermore, the multinational

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companies dominate the new technology market and they are inclined to design their products with a focus on the needs of large-scale farms, ignoring the smallholders in developing countries. Hence, Turkey needs, first and foremost, a stronger political commitment to invest in agricultural R&D and technological progress. Then, it needs new institutional frameworks tailored to ensure accessibility for small farmers and to provide adequate incentives for the private sector to invest in local innovation and technology transfer. However, rather than relying on the old model of exclusively public research, which has proved ineffective, or the market-led model which has left a big vacuum, Turkey could bridge its growing technology and knowledge gap by forging successful PPPs designed for the purpose of conducting cutting edge research with the explicit goal of end-user oriented innovation. In this context, establishing an effective IPR regime can play an important role as part of a wider institutional environment conducive to innovation and technological progress. Intellectual property rights, in particular patents and sui generis rights, could be implemented in a manner that fits the rights and obligations of the right holders to the local circumstances. Through domestically tailored IPR systems, benefiting from the flexibilities provided by international and regional IP laws, Turkey could strike the optimum balance between the goals of enhancing the accessibility of new technologies to small farms and strengthening the incentives for the private sector to innovate new pro-small-farm technologies. Hence, PPPs together with a suitably adapted IPR system setting legal standards for contractual negotiations; creatively using public domain possibilities; and a proper contractual balance, are critical in benefiting from new technologies in addressing the challenges facing Turkish agriculture.

ACKNOWLEDGMENTS This research project was funded by the National Centre for Competence in Research on Trade Regulation (NCCR Trade), a research programme funded by the Swiss National Science Foundation and hosted by the World Trade Institute at the University of Bern, Switzerland.

REFERENCES Alston, J. (2004). Horticultural biotechnology faces significant economic and market barriers. California Agriculture 58(2), 80-88. Alston, J. M., & Pardey, P. G (2006). Developing-Country Perspectives on Agricultural R&D: New Pressures for Self-Reliance? In P. G. Pardey, J. M. Alston & R. R. Piggott (Eds.). Agricultural R&D in the Developing World: Too Little, Too Late?, Washington, D.C., International Food Policy Research Institute. Bruce, W. B., Edmeades G. O., & Barker, T.C. (2002). Molecular and physiological approaches to maize improvement for drought tolerance. Journal of Experimental Botany 53(366), 13-25. Byerlee, D., & Fischer K. (2001). Accessing Modern Science: Policy and Institutional Options for Agricultural Biotechnology in Developing Countries. IP Strategy Today(1).

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Clark, D., Klee H., & Dandekar, A. (2004). Despite benefits, commercialization of transgenic horticultural crops lags. California Agriculture, 58(2), 58-89 FAOSTAT (2006). Food and Agriculture Organisation of the United Nations Statistics Division FAOSTAT database. Garg, A. K. (2002). Trehalose accumulation in rice plants confers high tolerance levels to different abiotic stresses. Proceedings of the National Academy of Sciences of the United States of America 99(25), 15898-15903. Graff, G. D., Cullen S.E., Bradford K.J., Zilberman D., & Bennett, A.B. (2003). The public−private structure of intellectual property ownership in agricultural biotechnology. Nature Biotechnology 21( 9). Gura, S. (2007). Livestock Genetic Companies - Concentration and Proprietary Strategies of an Emerging Power in the Global Food Economy, League for Pastoral Peoples and Indigenous Livestock Development, Ober-Ramstadt. Hall, A., Bockett, G., Taylor, S., Sivamohan, M. V. K., & Clark, N. (2001). Why Research Partnerships Really Matter: Innovation Theory, Institutional Arrangements and Implications for the Developing New Technology for the Poor. World Development 29(5), 783-797. IFAD (2001). Rural Poverty Report 2001: The Challenge of Ending Rural Poverty. Rome, International Fund for Agricultural Development. Kameri-Mbote, P., Wafula, D., & Clark, N. (2001). Public/Private Partnerships for Biotechnology in Africa: The Future Agenda, African Centre of Technology Studies, International Environmental Law Research Centre. Karapinar, B. & Temmerman M. (2008). Benefiting from biotechnology: pro-poor IPRs and public private partnerships. Journal of Biotechnology Law Report 27(3), 189-202 Llewelyn, M. (2003) Which rules in world trade law – patents or plant variety protection. In T. Cottier & P. Mavroidis (Eds.). Intellectual Property, Trade, Competition, and Sustainable Development. Studies in International Economics, Michigan, The University of Michigan Press. Madan, M. L. (2005). Animal biotechnology: applications and economic implications in developing countries. Scientific and Technical Review - World Organization for Animal Health 24(1), 127-139. Mueller, J.M. (2006) Patent Controls on GM Crop Farming. Santa Clara Journal of International Law, 1, 1-20. Nuffield Council on Bioethics (2003). The use of genetically modified crops in developing countries: a follow-up Discussion paper. Organization for Economic Cooperation and Development (OECD) (2006). Producer and Consumer Support Estimate (PSE-CSE) Database 1986-2005. Organization for Economic Cooperation and Development (OECD) (2008). Science, Technology and Industry Outlook 2008: Country Notes. Science, Technology and Industry Outlook. Pardey, P. G., Alston, J. M., & Piggott, R.R. (Eds.) (2006). Agricultural R&D in the Developing World: Too Little, Too Late? Washington, D.C., International Food Policy Research Institute. Pingali, P. & Raney, T. (2005). From the Green Revolution to the Gene Revolution: How will the Poor Fare? ESA Working Paper, FAO(05-09).

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Rausser, G., Simon, L., & Ameden, H. (2000). Public-private alliances in biotechnology: Can they narrow the knowledge gaps between rich and poor? Food Policy, 25, 499-513. Serageldin, I. (2001). Changing agendas for agricultural research. In J. M. Alston, P. G. Pardey & M. J. Taylor (Eds). Agricultural Science Policy: Changing Global Agendas. Baltimore: Johns Hopkins University Press. Spielman, D. J., Hartwich, F. & Von Grebmer, K. (2007). Sharing Science, Building Bridges, and Enhancing Impact: Public-Private Partnerships in the CGIAR. International Food Policy Research Institute, Discussion Paper (00708). Temmerman, M. (2007). The Patentability of Animal Genetic Systems, Berne, NCCR Working Paper 2007/04, 76-105, available at www.nccr-trade.org (last visited 24 September 2007). Turkish Patent Institute (2009a). Patent Statistics. Retrieved April 2009, 2009, from www.turkpatent.gov.tr. Turkish Patent Institute (2009b). Geographical Indicators. Retrieved June 2009, 2009, from www.turkpatent.gov.tr. World Bank (2007). 2008 World Development Report: Agriculture for Development. Washington DC, World Bank.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 14

THE LEGAL FRAMEWORK FOR AGROBIOTECHNOLOGY IN TURKEY: THE CHALLENGES TO THE IMPLEMENTATION OF THE PRECAUTIONARY PRINCIPLE Zeynep Kivilcim Istanbul University, Turkey

ABSTRACT The work on setting up a legal framework for agrobiotechnology in Turkey is largely based on using the international regulations as a benchmark, with the Cartagena Biosafety Protocol and the European Union legislation being the two main influences. The basis of the international regulation and particularly of the EU legislation is the ―precautionary principle.‖ This principle separates the legitimate public decision from scientific expertise and transforms the rule-setting processes. The precautionary principle is policy based and requires taking into account public perception of the risk and the social acceptability of the actions in a transparent and participatory forum. ―Procedural rationality‖ and ―procedural legality‖ in the rule-setting and decision-making processes are at the core of the principle. This chapter will critically assess the national legislative work on agrobiotechnology in different ministries and public institutions from the point of view of both substance and procedure, and particularly with a view as to whether these conform to the requirements of the precautionary principle.

INTRODUCTION The issue of setting up a legal framework for agrobiotechnology in Turkey came onto the agenda in the second half of the 1990s as an emergency measure, when the official authorities faced the risk of unauthorized use of modern agrobiotechnological techniques within the country. The 1999 circular of the Ministry of the Environment shows the concern of the

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official authorities (Ministry of Environment, 1999). The first piece of Turkish legislation on agrobiotechnology was the Instruction on ―Field Trials of Transgenic Culture Crops‖ (hereinafter the ―Instruction‖) enforced by the Ministerial Order of the Ministry of the Agriculture and Rural Affairs in 1998. Experimental field trials of various genetically modified (GM) crops, such as cotton, corn, and potato, started just after the coming into force of the Instruction. These trials are carried out in the Ministry‘s agricultural research institutes located in Nazilli, Akcakale, Adana, and Nigde (Ministry of Agriculture, 2005a; see also Demir, Seyis and Kurt, 2006). Meanwhile, the Turkish State Planning Organization (DPT) established a Biotechnology and Biosafety Special Commission within the framework of the Eighth Development Plan (2001–2005). The report prepared by this Commission in 2000 envisaged a legislative model centered on the Turkish Council of Scientific and Technical Research Institutions (TUBITAK). Turkey signed the Cartagena Protocol on Biosafety in 2000. The objective of the Protocol is to contribute to ensuring an adequate level of protection in the field of the safe transfer, handling, and use of living modified organisms resulting from modern biotechnology. It focuses specifically on the transboundary movements of these organisms.+ The Protocol‘s substantive framework has considerably affected Turkish legislative work on agrobiotechnology. A draft law for the ―National Biosafety Council‖ was set up under the coordination of the TUBITAK High Council of Science and Technology, but transmitted in 2001 to the Ministry of Agriculture and Rural Affairs, in order to contribute to the United Nations Environment Programme (UNEP) – Global Environment Facility Project on the Development of Turkey‘s National Biosafety Frameworks, which was started by the Ministry according to the Cartagena Protocol‘s provisions relative to national capacity building.€ From 2001 the legislative work was carried out by the Ministry of Agriculture and Rural Affairs within this project, and resulted in a draft National Biosafety Law in 2005. The Draft Law was discussed at the Council of Ministers only four years later, in June 2009, and will be presented to the Turkish National Assembly in the coming weeks. According to Vehbi Eser, the head of the Field Crops Research Department at the Ministry of Agriculture and Rural Affairs, responsible for the preparation of the National Biosafety Law, the delay was first due to the two changes of Ministers of Agriculture and Rural Affairs, in 2005 and 2007. The amendment of the related national legislation in 2005 also entailed the modification of the draft. The Ministry also took into consideration the accession negotiations with the European Union, and postponed the draft‘s submission to the Prime Ministry until the end of the screening process on the chapters relative to food safety and the environment. The draft was amended according to the outcome of this process, as well as the decision of the WTO Dispute Settlement Panel in 2006 on the EU‘s de facto moratorium on approvals of biotechnology products (see Chapter 15 by Burkard). After the change of the cabinet in 2007, the draft was reconsidered again in respect of the institutional and financial burden it carries. With the circular of June 4, 1999, the Ministry warned all the ministries and governorships against the unauthorized use and production of, and commerce in, genetically modified (GM) varieties, and asked for the public, farmers, and the local administrative officers to be informed about the risks of genetically modified organisms (GMOs) and to prevent the production, use, and commercialization of GM varieties. + The Cartagena Protocol on Biosafety to the Convention on Biological Diversity was adopted on January 29, 2000. Following the ratification, Turkey became party to the Protocol in 2004. € Article 22 of the Cartagena Protocol. The (UNEP)–GEF Project is assisting 123 countries to develop a draft national biosafety framework.

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The final version is still not public, but the draft is expected to pass at the Turkish National Assembly in 2009 (Eser, 2008). The other actors active in the agrobiotechnology debate in Turkey have different views on the delay of the passing of the National Biosafety Law. Abdullah Aysu, the President of the Confederation of Farmer Unions, remarks that the Ministry tried to find a profitable timetable for the biotechnology firms by timing the passing of the Biosafety Law with respect to some closely related legislation (Aysu, 2008). There is no GM agricultural product that is officially authorized in Turkey. However, the existence of GM food and feed products on the market is proved by the scientific analyses carried out by various academics and institutions (Ertugrul, Budak and Cetiner, 2008; Aydin, 2004; Sonmezalp, 2004). There is no doubt that Turkey‘s EU membership process has been a major factor having impact on the content and the acting time of the national legislation on agrobiotechnology, largely due to Turkey‘s obligation to adopt the acquis communautaire in this field. Yet the 2008 Progress Report (European Union, 2008) points out, as did the reports in previous years, that Turkey has not made any progress towards the transposition of the acquis on GMOs and novel foods. The ongoing Turkish legislative work on agrobiotechnology is largely based on using the international regulations as a benchmark, with the Cartagena Biosafety Protocol and the European Union legislation being the two main influences. The basis of these international regulations and particularly of the EU legislation is the ―precautionary principle.‖ In this chapter, the substance and procedural framework of the Turkish national legislative work on agrobiotechnology will be critically assessed with a view to determining whether this conforms to the requirements of the precautionary principle. The political and legal determinants of the decision concerning the authorization of GM crops in Turkey, as well as public perceptions and social costs, will be discussed. Within the context of the precautionary principle, the detachment taken by law when confronted with scientific data has repercussions on the content of prescriptive standards, and affects the evaluation of their rationality and legitimacy. The lack of information that is scientifically established as to the effects of GMOs makes the legislators unable to ensure the ―substantial rationality‖ of their decisions concerning these organisms and leads them to concentrate on the decision-making process in order to ensure the existence of ―procedural rationality.‖ Based on this logic, the action taken is not rational because it is the best that can be taken based on its substance, since the data for its evaluation are not available. However, the action taken is rational because it results from an appropriate and fair procedure (Kivilcim Forsman, 2004:580). The procedural rationality of the Turkish rule-setting process on agrobiotechnology will be studied in this chapter so as to scrutinize whether a public debate has been initiated during the preparation of the national legislation, and, in particular, whether the output of this debate is reflected in the legislative work, in order to assess the integration of the public concerns and visions during the process. The draft national biosafety legislation‘s conceptual framework for public participation in decision making will be critically studied with reference to the international regulations.

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THE POLITICAL INTERPRETATION OF THE ―BENEFITS‖ AND THE ―ACCEPTABLE RISKS‖ OF THE ADOPTION OF AGROBIOTECHNOLOGY IN TURKEY The science, in its current state, does not provide certainty on the security or the risk posed by GMOs. But the scientific data on GM crops and products‘ risks on human health and the environment is increasing. The risks to human and animal health and to the environment include the development of weed and insect resistance, the spread of antibiotic resistance, the development of unintended and unknown toxic and allergenic components in GM food, the gene flow, and the consequent adverse impacts on non-target species and ecosystems (FAO, 2000). Some ―accidents‖ have already shown that these risks are real, but the scientific controversy on the probabilities and the possibility of control and prevention is ongoing (Weaver and Morris, 2003). Meanwhile, scientists point out that the current chemical testing methods are inadequate to screen for harmful consequences of GMOs on human and animal health. Within the logic of precaution, the legislator can and must make assumptions for this uncertain situation by taking into consideration any potential risk. The links between law and science, which have been traditionally characterized by certainty, find themselves profoundly destabilized by the precautionary principle, in that the latter introduces scientific uncertainty at the heart of the rule-making process. The precautionary principle allows for the restoration of the primacy of policy in defining problems and evaluating the appropriateness of taking public action. As a ―revealing indicator for uncertainties,‖ scientific data are not used as the exclusive basis for public action, but simply accepted as just one tool among others in the decision-making process (Sadeleer, 2001). One of the major aspects of the precautionary principle is that it separates legitimate public decision from scientific expertise and transforms the rule-setting processes. The principle is essentially policy based, and ―the decision to act or not to act, based on the precautionary principle, is essentially a problem of political interpretation‖ (European Parliament, 2000). Thus, it requires taking into account the public perception of the risk and the social acceptability of the actions. According to the precautionary principle, the political decision as to whether or not a potential risk is acceptable should be based on the priorities laid down by the society. By the same token, the possible alternatives as means to fulfill the same objectives with less harm should be investigated in a participatory and transparent forum. On the other hand, in order to be able to weigh possible risks and benefits of an action or policy, it is important that the meanings of both the ―risk‖ and the ―benefit‖ are transparent and are connected to the goals that are publicly made explicit (Deblonde and du Jardin, 2005:340). Besides this, the risks and benefits should be weighed on a basis not only of natural-scientific information but also of social-scientific information, since the way we perceive harm and benefit is part of a complex social, political, cultural, ethical, and economic value system. It can hardly be said that the decisions to import genetically modified crops and to allow field trials in Turkey in the late 1990s were taken by a procedure fulfilling these basic requirements of the precautionary principle. These decisions were made by the government and put in practice by the Instruction in 1998 without any prior public debate. The opinion is widely shared that the preparation and the enforcement of the Instruction was the result of

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economic pressure by the agrobiotechnology firms, and also constituted an emergency measure against the unauthorized use and planting of GM crops within the country.

Lack of Transparency About the Officially Expected ―Benefits‖ of Agrobiotechnology in Turkey The field trials started in 1999 and have been carried out during the subsequent years. The general public, even those living close to the trials‘ locations and farmers having their lands next to the trial fields, did not have any information about the existence or the purpose of these trials. Even today the information concerning the objectives, duration, and results of the trials remains inaccessible to the general public and independent researchers. In 2005, six years after the start of the trials, in his response to a parliamentary question on the National Biosafety Legislative Framework, the Minister of Agriculture and Rural Affairs indicated that the trials‘ results were still under consideration . He also pointed out that they did not produce any feedback concerning the benefit or the harm that GMOs may generate for the country (Ministry of Agriculture, 2005a). The authorities responsible for setting up the Instruction and carrying out the trials indeed confirm the Minister‘s statement and point out that the results of the trials are still not accessible to the public or to researchers (Eser, 2008). Thus the ―benefit‖ for Turkish agriculture and farmers expected by the authorities while they accepted the risks of the GM crop trials is far from being explicit. The general benefits of GM crops are presented as being high fertility, a decrease in herbicide and pesticide use, and resistance to drought. The data provided by a decade of use of GM agriculture in different countries are perplexing. Some studies indicate positive results while some recent reports warn that, according to data from the USA, Australia, and Brazil, GM crops do not yield more than conventional varieties and do not reduce pesticide use. In India and Indonesia farmers faced poor performance, and in Paraguay and Brazil farmers suffered from huge losses in their GM harvests due to droughts (Friends of the Earth International, 2007). The impacts of the adoption of agrobiotechnology on small-scale farmers and the rural poor are particularly controversial. It is pointed out in many studies that GM crops commercialized on a large scale are not addressing the main problems of these farmers, and the patents and royalties are increasing the prices of seeds. Most GM crops are engineered to withstand the application of proprietary herbicides sold by the same company that markets the GM seed. This has little if any relevance to farmers in developing countries, who often cannot afford to buy these chemicals. Mostly, large-scale farmers benefit from GM agriculture. Experience in many countries shows that GM crops risk contributing to the further concentration of land and the displacement of small-scale farmers. The consequences of the adoption of modern biotechnology on Turkish agriculture remain controversial among academics, agricultural engineers, and farmers‘ organizations.+ In these circumstances the fact that the official interpretation of the ―benefits‖ of the adoption of agrobiotechnology in Turkey is not publicly known presents a serious problem. Nevertheless, some pieces of information can be found in the articles recently published by the scientists involved in the trials (Gullu, Tatli, Kanat and Islamoglu, 2004; Tatli, Gullu and Ozdemir, 2004). + See for instance Ozertan and Aerni, 2007; Acıkgoz, 2006; Kıymaz and Tarakcıoglu, 2002.

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Insufficient Consideration of Public Perceptions of Risks The integration of the public‘s concerns and perceptions about the risks of agrobiotechnology, and its preferences concerning feasible alternatives, is an important part of risk management according to the precautionary principle (see Chapter 10 by Karapinar). Thus, in order to determine the social costs of the adoption of this technology in Turkey, it is crucial to study the Turkish public‘s attitudes and perceptions towards agrobiotechnology and GM agricultural products. This is also indispensable in order to be able to define and incorporate the socially constructed perceptions of risks articulated by different actors and citizens in the decision-making. In contrast with those in several other countries, the public authorities in Turkey show no interest in gathering or taking into consideration this kind of information. To the best of our knowledge there exist only two studies on the attitudes of Turkish consumers towards GM food products. Their findings indicate that the majority of the consumers who took part in the studies are rather negative towards GM food, think that it is harmful for health, and still would not buy such food even if it were superior to other types in appearance, taste, or shelf life (Basaran, Kilic, Soyyigit and Sengun, 2004; Kahveci and Ozcelik, 2008). Statements by the authorities and by representatives of the civil society organizations concerned on public perceptions of GM agricultural products confirm these findings (Eser, 2008; Altinok, 2008). The negative perception by the public of modern biotechnology has long been conceived of as a problem caused by ignorance in relation to science and technology among lay people. The remedies for this ―deficit‖ proposed by the policymakers and the industry lobbyists have hence consisted of a one-way scheme for the communication of information, from scientists to the public, which is merely regarded as the passive receiver and repository. However, survey research conducted from the second half of the 1990s onwards has largely discredited the diagnosis that the factual ignorance of the public explains its opposition to biotechnology. The results of the Eurobarometer surveys constructed on this ―deficit model‖ have recently shown that an increase in the amount of knowledge citizens have, and the public understanding of biotechnology and GM foods, does not ease these fears and concerns. The studies reveal that support for GM agricultural products is not linked to the acquisition of the knowledge about this new technology but relates to the degree of trust in the authorities responsible for the regulation and monitoring. Thus, the problem is not ignorance but the public distrust of the authorities as to their capacity and willingness to protect public health, safety, and the environment (Levidow and Marris, 2001:347; Durant and Legge, 2005). The authorities responsible for setting up the Turkish national biosafety legislation should study and take into consideration the Turkish public‘s perceptions about the risks of GMOs. The question of whether the Turkish public accepts the idea of taking risks in order to have the potential benefits of agrobiotechnology, and the definition of the ―socially acceptable‖ risks for Turkish citizens and farmers, constitute important data for the rule-making process. The fact that this process is very opaque and inaccessible to the public deepens public distrust of the official authorities and increases people‘s negative perception of agrobiotechnology and its products.

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Civil Society Involvement in the Rule-Setting Process One of the most effective ways to integrate the public perception of risks and the public concerns into the legislative work on agrobiotechnology is to ensure the active involvement of civil society organizations. Turkish civil society started to carry out work and activities on agrobiotechnological applications, and the legal framework of these applications, in a more systematic and organized way with the formation of the ―No to GMOs Platform‖ in 2004. This platform brings together more than 100 organizations, active in different fields yet all concerned about GMOs, ranging from the Chamber of Agricultural Engineers to the Consumer Rights Association, the Confederation of Farmer Unions, Greenpeace, and the Ankara Bar Association. It seems that the concerned civil society organizations in Turkey were not integrated in the rule-setting process during the period when the legislative work was carried out by TUBITAK (see Chapter 10 by Karapinar). But an effort in that direction, though limited, can be observed in the work of the Ministry of Agriculture and Rural Affairs. In the framework of the (UNEP)–GEF Project on the Development of Turkey‘s National Biosafety Frameworks, pursued by the Ministry, several workshops and public information meetings were organized during 2004–05. However, the extent to which these workshops and meetings comprised different stakeholders, the effectiveness of the public debate initiated, and whether the output of this debate is reflected in the resulting draft legislation, remain highly questionable. The officials assert that the legislative work towards setting up the national biosafety law represents the most transparent and democratic example of the rule-making process in the Turkish context, whereas the representatives of various NGOs active in the field criticize the Ministry of Agriculture for the lack of integration of the civil society. They hold that they were invited to the meetings during 2004 mainly as a result of the pressure exerted by the ―No to GMOs Platform‖ on the Ministry, and the press attention to the topic. They point out, however, that the sensitivity of the Ministry to assuring a participatory process gradually disappeared after 2005 (Ozluer, 2008). From this date on, NGOs‘ representatives were either excluded from or invited just at the last minute to the meetings, where their opinions are in any case not taken into consideration (Atalik, 2008). The member organizations of the ―No to GMOs Platform‖ have made efforts to follow the public meetings organized by the Ministry, without neglecting other possible ways of influencing the rule-making process. In 2005 they consigned 100,000 signatures that they had collected to the President of the Petition Commission of the Turkish Grand National Assembly (TGNA). They have visited the President of the Agriculture Commission of the TGNA on several occasions and organized an information meeting with the participation of the TGNA members of the relevant commissions in the Assembly. In 2006 some representatives of the Platform took legal action against a regulation on the use of modern biotechnology techniques on forest products. They obtained an interim decision to stop the execution of the regulation, but the court rejected their suit. The decision is currently being appealed (Altinok, 2008; Ozluer, 2008). The Platform is closely following agrobiotechnology legislative work, and most recently it has focused its work on the preparation of an alternative national biosafety law.

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Obligations Under WTO Agreements Framing the National Legislation The international legal obligations of the Turkish government also determine the political decisions on the use and import of agrobiotechnology products. The commitments to adopt the EU acquis and the obligations under WTO agreements have been particularly important in this respect (see Chapter 15 by Burkard). The main WTO agreement that could be applied to the GMO issue is the Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS Agreement). Its interpretation by the competent organs of the WTO can determine whether a national law or measure based on the precautionary principle is legitimate under WTO requirements or constitutes a disguised trade barrier. It is noted by the dispute settlement organs of the WTO that the precautionary principle is reflected in the SPS Agreement, but that it did not override the specific obligations in the agreement. The Appellate Body considered in 1998 that the notion of precaution was incorporated in various provisions of the SPS Agreement (WTO, 1998). The latter allows that the members: introduce or maintain sanitary or phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a member determines to be appropriate. ―In cases where relevant scientific evidence is insufficient‖ the SPS Agreement entitles Member States to: provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information, including that from the relevant international organizations as well as from sanitary or phytosanitary measures applied by other Members. In such circumstances, Members shall seek to obtain the additional information necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time.+ A WTO dispute settlement panel reconsidered the issue on the occasion of the dispute procedure concerning the Community Measures Affecting the Approval and Marketing of Biotech Products.€ The Panel noted that the EU moratorium on approval of biotech products and various EU member state safeguard measures prohibiting the import or marketing of specific biotech products are inconsistent with the provisions of the SPS Agreement (WTO, Article 3.3 of the SPS Agreement. + Article 5.7 of the SPS Agreement. € In May 2003 the USA, Canada, and Argentina initiated a WTO dispute settlement procedure against the EU for the de facto moratorium on approvals of biotechnology products between 1984 and 2004. This procedure ended on September 29, 2006, with the report of a dispute settlement panel ruling that the EU‘s de facto moratorium is inconsistent with its obligations under the SPS Agreement. The period during which the EU was meant to implement the ruling has been extended twice because of the refusal of Austria to allow imports of genetically modified food products. The Austrian ban was finally lifted in May 2008.

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2006) (for a detailed discussion of the dispute, see Chapter 15 by Burkard). The panel further observed that article 5.7 of the SPS Agreement is applicable when the relevant scientific evidence is insufficient, ―if the body of available scientific evidence does not allow, in quantitative or qualitative terms, the performance of an adequate assessment of risks as required under the SPS Agreement‖ (WTO, 2006). According to the panel, since in the disputed measures concerned it found that there was an adequate risk assessment, ipso facto one cannot argue that the information with respect to each of the disputed GM products was insufficient. In the light of this interpretation, the complete or partial prohibition of the introduction of GM crops or products to the territory of a WTO Member state, in this case Turkey, is not per se contrary to the SPS Agreement, but it has to be based on an assessment, as appropriate to the circumstances, of the risks to human, animal, or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations. If there is no adequate risk assessment, the provisional sanitary and phytosanitary measures can be legitimately adopted following the terms of article 5.7 of the SPS Agreement.

PROCEDURAL RATIONALITY OF THE DECISION-MAKING PROCESS IN THE TURKISH DRAFT LAW ON BIOSAFETY The precautionary principle leads to a questioning of the predominant role of experts in public decision-making procedures and constitutes a challenge to the ―scientification of politics.‖ Actors without scientific expertise, more specifically the public, may legitimately intervene in areas that are highly technical. Thus, access by concerned parties to the procedures for setting up the national legislative framework and to administrative decisions relative to agrobiotechnology, and in a way that allows them to influence decisions effectively, is fundamental to the precautionary principle. A study published by the FAO Legal Office indicates that ―one of the most useful legal tools for realizing the potential and avoiding the risks of modern biotechnology may be legally requiring public participation in the policy-making and regulatory decision-making processes‖ (Glowka, 2003).

Public Participation as an International Legal Obligation Informing the public and integrating it in the decision-making procedures about GMOs is required by the Cartagena Protocol on Biosafety as well as the EU regulation. The Protocol disposes that the States parties ―promote and facilitate public awareness, education and participation concerning the safe transfer, handling and use of living modified organisms‖ and they ―endeavor to ensure that public awareness and education encompass access to (related) information.‖ The Protocol further stipulates that ―the Parties shall, in accordance with their respective laws and regulations, consult the public in the decision-making process regarding living modified organisms and shall make the results of such decisions available to the public.‖ Article 23 of the Protocol.

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The EU legislation requires that before undertaking a deliberate release of GMOs, placing GMO products on the market, or permitting a transboundary movement of GMOs, a notification must be submitted to the competent authority. The member states shall consult the public on deliberate releases and the Commission shall make available to the public a summary of the notification information for the GMO‘s deliberate release, or a GM food or feed marketing authorization. The assessment reports, the opinion of the European Food Safety Authority, and the monitoring reports are also made available to the public in order to give EU citizens the possibility of making comments to the Commission (European Union, 2001, 2003a, 2003b). Membership of the Aarhus Convention is a requirement for Turkey to fulfill, to enable EU membership. A 2005 amendment to this Convention inserted a new article on public participation in decisions on the deliberate release into the environment and placing on the market of GMOs. It stipulates that each party shall provide for early and effective information and public participation prior to making decisions on whether to permit these activities. In this respect, the State shall lay down, in its regulatory framework, arrangements for effective information and public participation in decisions, which shall include a reasonable time frame in order to give the public an adequate opportunity to express an opinion on such proposed decisions. Without prejudice to the applicable legislation on confidentiality, each Party shall make available to the public in an adequate, timely, and effective manner a summary of the notification introduced to obtain an authorization for the deliberate release into the environment or the placing on the market of a GMO on its territory, as well as the assessment report where available and in accordance with its national biosafety framework.+

Obstacles to Effective Public Participation and Consultation Apart from the biotechnology industry representatives, all the stakeholders in the agrobiotechology debate in Turkey, including the officials of the Ministry, agree on the fact that GMOs may present risks for human health and the environment. But their conceptions about the types and methods of management of these risks differ considerably. According to the officials of the Ministry, the actors in the agrobiotechnology debate in Turkey consist of institutions or individuals acting according to their economic interests, or else they are uninformed people under the influence of lobbies. The Ministry, by standing at a distance from all the stakeholders, can only take neutral decisions and set up balanced legislation. This view reveals the paternalistic–bureaucratic style of administration, and also shows the idea that civil society‘s position and opinions are by their nature subjective and therefore not noteworthy. By distinguishing extra-scientific factors from ―science,‖ the official discourse presents the concept that science itself is value free and neutral, and that the other The UN Economic Commission for Europe (UNECE) Aarhus Convention on Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters, adopted on June 25, 1998. + Economic Commission for Europe, Meeting of the Parties to the Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters: Report of the Second Meeting of the Parties, Addendum Decision II/1, Genetically Modified Organisms, adopted at the second meeting of the Parties held in Almaty, Kazakhstan, on May 25–27, 2005 ECE/MP.PP/2005/2/Add.2. June 20, 2005.

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actors are misled by some hidden political or economical agenda. The actual subjectivity of the experts, and the economic power of some stakeholders and their consequent influence on the public authorities and procedures, are not officially acknowledged, and the assumption of ―objective‖ expertise and of ―neutral‖ decisions taken at the end of the administrative process give much legitimacy to the labeling of the perceptions and evaluations of the other stakeholders as ―subjective‖. This viewpoint gave shape to the 2005 draft National Law on Biosafety, which builds an institutional and procedural decision-making procedure dominated by the ministerial officials. It establishes a Biosafety Institution that will be responsible for setting up the regulatory and administrative framework as well as the coordination of its execution (Ministry of Agriculture, 2005b). The determinative actors in the procedures defined in the draft law, as well as the members of the decision-making boards and committees that it sets up, are decided exclusively by various ministries. Civil society representatives can sit on the Ethical Board and the Advisory Board. However, the influence of the opinions of these boards in the decision-making procedure seems to be very limited.+ The Turkish draft law on biosafety requires that the Biosafety Institution sets up the necessary regulation for the timely information and participation of the public in the decisionmaking procedure. But it stipulates a one-way paternalistic information scheme, in terms of which the ―Institution helps the public … to understand the sanctions of the Law and the ways of accession to and the functions of the biosafety clearing house mechanism.‖€ The regulatory decisions of the Institution are published in the Official Journal. However, the Institution can exempt the decisions, if their publication is harmful to public order and the country‘s economy.§ The Institution can provide information that is not confidential.× It is the applicant who indicates w hich information will be kept confidential.£ The draft lists information that shall not be considered confidential. It is a parallel but more limited version of the relevant EU legislation.≠ The main difference is that the Turkish draft law stipulates that only the Institution‘s final decisions will be made public on the Internet. The remaining nonconfidential information will be provided to individuals or institutions only on written request.¥ Whereas, under the EU legislation, the information made available on the Internet without any special request comprises the summary of the notification information for the deliberate release or a genetically modified food or feed authorization, and the assessment reports giving the opinion of the European Food Safety Authority as well as the monitoring reports.± The Board responsible for the direction of the National Biosafety Institution consists of seven members selected by the Ministry of Agriculture and Rural Affairs, the Ministry of Environment and Forestry, the Ministry of Health, and the Undersecretariat of Prime Ministry for Foreign Trade (Draft law, article 50). + Draft law, articles 69 and 70. € Draft law, article 8. § Draft law, article 54. × Draft law, article 8. £ Draft law, article 6. ≠ See for instance article 30 of the Regulation EC no 1829/2003 of the European Parliament and of the Council on genetically modified food and feed. ¥ Draft law, article 8. ± It seems that in the final version of the Turkish draft law, the results of the risk assessment and the socioeconomic evaluation will also be accessible to the public on the Internet. The comments received will be reflected in the decisions of the Biosafety Institution (Eser, 2008).

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Civil society organizations have rightly reacted against the adoption of the Internet as the exclusive means of communication and public consultation in the draft law. Farmers and rural people are particularly concerned about the decisions taken, and their integration in the decision-making processes regarding GMOs is important. The adult literacy rate is low in rural Turkey and farmers rarely have access to the Internet. Appropriate communication strategies should be used to ensure that people who are illiterate or unable to access or use the Internet can be provided with information about agrobiotechnological applications as well as being represented in the decision-making process. FAO studies propose suitable channels for communicating with rural populations: existing local networks, civil servants, NGOs, farmers‘ organizations, and staff of farm supply stores can play a useful role in this respect (Ruane and Sonnino, 2006). It is noted that this has to be two-way and not one-way communication, and that rural people will provide crucial input on their ―on the ground‖ needs and problems, and views about possible alternatives (Ruane and Sonnino, 2006). The problems caused by the underdevelopment of consultation and participation processes accrue in Turkey, as in many other countries, because decisions about GMOs are articulated through informal interest representation, and stakeholders have unequal access to and influence over the official authorities and procedures, given their asymmetric resources. Without making the economic and political power relationships, as well as the concerned actors, transparent and explicit, the public policy and the decision-making procedures cannot be called transparent and neutral (Deblonde and du Jardin, 2005:339).

Problems Concerning the Independence and Transparency of Scientific Expertise The prevalent policy language assumes that risk assessment can be kept value neutral. But the lack of transparency in the way the experts are selected and the expert advice is used make this neutrality highly hypothetical. The normative framework for assuring an effective democratic dialogue can include further participatory schemes concerning the regulation of the expert consultation procedure. These schemes would in the first place develop inputlegitimacy by democratizing the expertise, by improving the transparency and accountability of expert advice. It is also important to regulate access and influence through explicit guiding principles as well as to foster participation by integrating extensive and formalized consultation procedures (Borras, 2006). The active involvement of citizens and laypeople in the production, control, and validation of the knowledge basis upon which decisions are made constitutes a more advanced level of participatory scheme. In this framework, the EU legislation delegated the assessment and communication of risk and the issue of food safety to an independent agency (the European Food Safety Agency) in order to improve the transparency and accountability of scientific expertise. In contrast, according to the Turkish draft National Law on Biosafety of 2005, following each application the scientific risk assessment would be carried out case by case and the National Biosafety Institution would decide on the risk assessment authority and procedure. In the

Draft law, articles 7 and 21.

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case of an application to authorize the marketing of a GM food or feed, the Institution would be able to ask that the applicant carry out the risk assessment. The draft law settles the terms of a Scientific Advisory Board that will provide a scientific opinion concerning the adequacy of the information supplied by the applicant as well as the necessary experiences, trials, and analyses for the risk assessment of the GMOs in question.+ The Direction Board of the National Biosafety Institution selects the members of this Scientific Advisory Board. The Scientific Advisory Board meets when the President of the Institution judges that it is necessary.± This scheme throws doubt on the independence of the scientific expertise, and the procedure through which it is formulated and integrated in the decision-making procedure. The Institution decides who would perform the risk assessment. In the case of a marketing authorization, where the risk assessment can be carried out personally by the applicant, the independence of the scientific expertise is far more controversial. The structure and the working principles of the Scientific Advisory Board make its autonomy and effectiveness very suspicious.

CONCLUSION The decisions to import genetically modified crops and to allow the field trials in Turkey were taken without any prior public debate on the benefits and acceptable risks of agrobiotechnology for Turkish agriculture. The civil society actors in this field share the view that the decision on the adoption of agrobiotechnology was not motivated by the needs of Turkish farmers or oriented to the concerns of the consumers. The administrative authorities were constrained by pressure from multinational agrobiotechnology companies. The regulatory work on agrobiotechnology in Turkey and the position of Turkish delegations during the negotiations for international treaties on biosafety are closely followed by American authorities. Interviews with Turkish officials reveal that the US Department of Agriculture and the American Embassy organize briefings or sometimes visits to the USA for concerned Turkish ministerial officials and members of parliament in order to communicate the benefits of the use of modern biotechnology in agriculture. The most recent visit to the USA is also echoed in the Turkish press¥, as it was organized just before the discussion of the National Biosafety Law in the Council of Ministers. This pressure is real and effective. However, the Turkish government has also to fulfill its legal obligations under the Cartagena Protocol on Biosafety. Furthermore, EU membership is a political priority and the EU member countries are the main importers of Turkey‘s agricultural products. Hence, the adoption of the community legal framework in the field of agriculture is a constant strain on the Turkish authorities. The regulatory framework for agrobiotechnology in Turkey is constructed mainly by using the relevant EU legislation and the Cartagena Protocol for Biosafety as benchmarks. The precautionary principle constitutes the cornerstone of these international regulations. The Draft law, article 29. + Draft law, article 68/1. ± Draft law, article 68/2. Besides this, article 70 of the draft law establishes a National Biosafety Advisory Board, which will meet at least once a year at the invitation of the President of the Institution. ¥ See for instance Haberturk, 08.06.2006 (available at http://www.haberturk.com/HTYazi.aspx?ID=1891)

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Turkish legislation also indicates this principle as its basis. However, the implementation of the requirements of the precautionary principle, and in particular the requirement for assuring transparent and participatory rule-setting and risk management procedures, have proved to be difficult, mainly due to the long-standing but still dominant paternalistic attitude and bureaucratic culture in Turkey. The draft National Biosafety Law, which resulted from a long process of preparation, falls short of meeting the conditions of the precautionary principle by its opacity with respect to the benefits expected from the adoption of agrobiotechnology, the underdevelopment of the participation scheme for public integration in the decision making, the lack of transparency of the expert consultation procedure, and the bureaucratic structure of the decision-making bodies. This could have consequences for the future effectiveness of the legislation. Furthermore, the promotion of transparency and participation at all stages of the procedure is crucial in order to remedy public distrust of the regulatory and monitoring authorities. It can be noted that the commitments for the adoption of the legal framework set up by the Cartagena Protocol and the EU regulations, and for the implementation of the precautionary principle with its procedural requirements, are putting pressure on the classical conception of administration in Turkey. This latter is gradually becoming more transparent and growing relatively open to the influence of civil society actors. However, this influence can still only be realized at limited points, and neither the opinions nor the concerns of civil society actors can fully and consistently be integrated with the Turkish legislative and administrative procedures relative to agrobiotechnology.

ACKNOWLEDGMENTS The author would like to thank Dr. İlhami Alkan-Olsson for his comments and suggestions.

REFERENCES Acikgoz, N. (2006). Biyoteknoloji Bazi Ulkelere Neler Kazandiriyor ?, Tarim ve Muhendislik, Sayi: 76–77. Istanbul ZMO. Altinok, E.B. (2008). Personal Communication, June 17, 2008. (Member of the City and Environment Board at the Ankara Bar Association and Ecology Collective). Atalik, A. (2008). Personal Communication, June 16, 2008. (President of the Chamber of Agricultural Engineers Istanbul Branch). Aydin, G. (2004). Detection and quantification of genetically modified maize via polymerase chain reaction. Thesis submitted to the Graduate School of Natural and Applied Sciences of Middle East Technical University, Ankara, Turkey, 2004. Aysu, A. (2008). Personal Communication, May 25, 2008, Istanbul. Basaran, P., Kilic, B., Soyyigit, B., & Sengun, H. (2004). Public perceptions of GMOs in food in Turkey: a pilot survey. Journal of Food, Agriculture & Environment, 2 (3-4), 25– 28.

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Borras, S. (2006). Legitimate governance of risk at the EU level? The case of genetically modified organisms. Technological Forecasting & Social Change, 73 (1), 61–75. Deblonde, M., & du Jardin, P. (2005). Deepening a precautionary European policy. Journal of Agricultural and Environmental Ethics, 18 (4), 319–343. Demir, A., Seyis, F., & Kurt, O. (2006). Genetik yapisi degistirilmis organizmalar: I. Bitkiler. J. of Fac. of Agric., OMU, 21 (2), 249–260. Durant, R. F., & Legge, J. S. Jr (2005). Public opinion, risk perceptions and genetically modified food regulatory policy: Reassesing the calculus of dissent among European citizens. European Union Politics, 6 (2), 181–200. Ertugrul, A., Budak, H., & Cetiner, S. (2008). The DNA based qualitative and quantitative analysis of genetically modified products in Turkish market. Paper presented at the First Global Conference on GMO Analysis, Italy. Eser, V. (2008). Personal Communication, June 17, 2008. European Parliamant (2000). Resolution on the Communication from the European Commission on the precautionary principle. A5-0352/2000, 14.12.2000. European Union (2001). Directive 2001/18/EC of the European Parliament and of the Council of 12 March 2001 on the deliberate release into the environment of genetically modified organisms. European Union (2003a). Regulation (EC) No 1829/2003 of the European Parliment and of the Council of 22 September 2003 on genetically modified food and feed. European Union (2003b). Regulation (EC) No 1946/2003 of 15 July 2003 of the European Parliament and of the Council on transboundary movement of genetically modified organisms. European Union (2008). Turkey 2008 Progress Report. COM (2008) 674. FAO (2000). Statement on Biotechnology. Available at http://www.fao.org/ Biotech/stat.asp. Friends of the Earth International (2007). Who Benefits from GM Crops: An Analysis of the Global Performance of GM Crops (1996–2006). Available at www.foei.org. Glowka, L. (2003). Law and modern biotechnology: Selected issues of relevance to food and agriculture. FAO Legislative Study 78. Rome: Food and Agriculture Organization of the United Nations. Gullu, M., Tatli, F., Kanat, A. D., & Islamoglu, M. (2004). Population development of some predatory insects on Bt and non-Bt maize hybrids in Turkey. Bulletin OILB/SROP, 27 (3), 85–91. Kahveci D., & Ozcelik B. (2008). Attitudes of Turkish consumers towards genetically modified foods, International Journal of Natural and Engineering Sciences, 2 (2), 53–57. Kivilcim Forsman, Z. (2004). Community Regulation of Genetically Modified Organisms: a Difficult Relationship Between Law and Science. European Law Journal, 10 (September 5, 2004), 580–594. Kiymaz, T., & Tarakcioglu, M. (2002). Biyoteknoloji alanindaki gelismelerin yansimalari ve Turkiye‘nin politika secenekleri. DPT Planlama Dergisi. Levidow, L., & Marris, C. (2001). Science and governance in Europe: lessons from the case of agricultural biotechnology. Science and Public Policy, 28 (5). Ministry of Environment (1999). Directorate of Environmental Protection, Circular no: B 100 CKG 0001303-1267-4400, 04.06.1999. Ministry of Agriculture (2005a). Response to a Parliamentary question on the biosafety legislative preparatives in Turkey, May 20, 2005.

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Ministry of Agriculture (2005b). Draft National Law on Biosafety. No longer accessible via the Ministry‘s website but still available at http://www.tarimsal.com/ tarimhaberleri/biyoguvenlik.htm. Ozertan, G., & Aerni, P. (2007). GM Cotton and its Possible Contributions to Environmental Sustainability and Rural Development in Turkey. Int. J. Agricultural Resources, Governance and Ecology, 6 (4–5), 552-575. Ozluer F. (2008). Personal Communication, June 17, 2008. (Member of the Ecology Collective and the City and Environment Board at the Ankara Bar Association). Ruane, J., & Sonnino, A. (2006). Results from the FAO Biotechnology Forum, Background and Dialogue on Selected Issues. FAO Research and Technology Paper 11. Rome: Food and Agriculture Organization of the United Nations. Sadeleer, N. (2001). Le statut juridique du principe de précaution en droit communautaire: du slogan à la règle. Cahier de droit européen, (1–2). Sonmezalp, Z. (2004). Detection of Genetically Modified Insect Resistant Tomato via polymerase chain reaction. Thesis submitted to the Graduate School of Natural and Applied Sciences of Middle East Technical University, Ankara, Turkey. Tatli, F., Gullu, M., & Ozdemir, F. (2004). Determination of fungi species, relationships between ear infection rates and fumonisin quantities in Bt maize. Bulletin OILB/SROP, 27 (3), 161–164. Weaver, S., & Morris, M. (2003). An Annotated Bibliography of Scientific Publications on the Risks Associated with Genetic Modification. School of Earth Sciences Research Report No.21. Victoria University of Wellington. WTO (1998). Panel Reports on 18 August 1997 and the Appellate Body report on 16 January 1998, Dispute relative on EC Measures Concerning Meat and Meat Products (Hormones). WTO (2006). Reports of the Panel WT/DS291/R, WT/DS292, WT/DS293/R, 29 September 2006, European Communities—Measures Affecting the Approval and Marketing of Biotech Products. Available at http://www.wto.org/english/ news_e/news06_e/ 291R_e.htm.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 15

RISK ASSESSMENT PROBLEMS WITH BIOTECH PRODUCTS Michael Burkard World Trade Institute, University of Bern, Switzerland

ABSTRACT The Panel in the World Trade Organization (WTO) dispute EC—Biotech decided that the Cartagena Protocol is not applicable in WTO disputes as long as not all WTO Members are also parties to the Cartagena Protocol. On the other hand, the Panel declared that the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) is not only applicable to food safety risks from biotech products, but also to environmental risks from biotech products. Hence, the risk assessment principles of the SPS Agreement should be taken into account in particular by countries which have yet to develop coherent regulatory frameworks for novel technology applications in agriculture, like biotechnology and nanotechnology.

INTRODUCTION In theory, the international regulatory schemes for the handling of risks from agricultural products deriving from the application of biotechnology (biotech products) should be complementary: the Cartagena Protocol for Biosafety (Cartagena Protocol) should address risks from the deliberate release of genetically modified organisms (GMOs) into the environment; on the other hand, the focus of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) should be on food safety risks. In addition, private standards, also come into play where retailers are labeling products according to consumers‘ perception of quality and risks, e.g. ―organic‖ or ―GM-free‖ produce (see Chapter 19 by Jusoh). In practice, however, the regulatory schemes for the handling of The Cartagena Protocol on Biosafety, in its preamble, uses the term ―mutual supportiveness‖ for depicting the relationship aspired to between trade and environment agreements. See also Graff (2002), pp. 420–422.

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risks deriving from biotech products are less complementary than would ideally be expected. Conflicts between the Cartagena Protocol and the SPS Agreement have emerged in WTO disputes, in particular in the case EC—Biotech. Furthermore, tensions between the SPS Agreement and private standards are increasingly discussed in the SPS Committee. In this context, the impact of the Cartagena Protocol and the SPS Agreement on domestic legislation in Turkey is described by Kivilcim in Chapter 14 (―The Legal Framework for Agro-Biotechnology in Turkey: The Challenges to the Implementation of the Precautionary Principle‖). Hence this chapter will exclusively focus on the regulation of biotech products at the international level. It will assess how different approaches towards the assessment of risks deriving from biotech products should be addressed. To this end, it will look at the distinctions between risk assessment procedures according to rules of the Cartagena Protocol and those following the principles of the SPS Agreement. Since Turkey is a party to both the Cartagena Protocol and the SPS Agreement, its domestic regulation should take into account the complementarities and potential conflicts between the two and the related implementation problems. For this purpose, first, an overview of the distinct regulatory approaches towards risk assessments for biotech products in the Cartagena Protocol and in the SPS Agreement is provided. Second, the interpretation of the interface between the Cartagena Protocol and the SPS Agreement by the Panel in EC—Biotech is discussed and, third, the consequences for risk assessments of biotech products are outlined.

RISK ASSESSMENT OF BIOTECH PRODUCTS Risk Assessment According to the Cartagena Protocol The Cartagena Protocol in General The Cartagena Protocol is a supplementary protocol to the Convention on Biological Diversity (CBD). The CBD was adopted in 1992 under the auspices of the United Nations Environment Programme (UNEP). The CBD has three objectives: the conservation of biodiversity, the sustainable use of biodiversity, and the fair and equitable sharing of the benefits acquired by the use of genetic resources. The Cartagena Protocol was established with the purpose of making operational the objectives of the CBD with regard to biotechnology and was adopted on January 29 2000 (Boisson de Chazournes and Mbengue, 2004:298). In particular, the objective of the Cartagena Protocol is to achieve ―an adequate level of protection in the field of the safe transfer, handling and use of living modified organisms+ resulting from modern biotechnology‖ (Article 1 of the Cartagena Protocol).

See, for example, the Report of the Standards and Trade Development Facility (STDF) on private standards of 26 June 2008 (G/SPS/R/50), available at: http://docsonline.wto.org/DDFDocuments/t/g/sps/r50.doc (visited: June 28, 2009). + The Cartagena Protocol uses the term ―living modified organism‖ (LMO). In the text at hand, the more widely used term ―genetically modified organism‖ (GMO) is used synonymously.

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The scope of the Cartagena Protocol covers ―the transboundary movement, transit, handling and use of all living modified organisms that may have adverse effects‖ on the environment or on human health (Article 4 of the Cartagena Protocol, emphasis added). The Cartagena Protocol distinguishes between two main categories of GMOs. The first category covers GMOs intended for deliberate release into the environment. Typically, these are GMOs destined to grow and multiply, thereby passing on their modified genes to succeeding generations, e.g. genetically modified seeds or genetically modified live fish. For this category, the Cartagena Protocol provides a rigorous procedure. Shipments of GMOs from the first category require exporters and importers to follow the rules of the Advanced Informed Agreement (AIA) procedure. Basically, the AIA procedure consists of a notification of the exporter prior to the shipment to enable the importer to carry out a risk assessment and make an informed decision (Articles 8 to 10 of the Cartagena Protocol). The requirements for carrying out risk assessments for GMOs are listed in Annex III of the Cartagena Protocol. The second category of GMOs consists of agricultural commodities intended for direct use as food or feed or for processing, e.g. genetically modified soybean, corn and cereals,+ in contrast to seeds for growing purposes, which fall into the first category. For GMOs of the second category, i.e. GMOs intended for direct use as food, feed or for processing, a simplified procedure applies. Basically, the simplified procedure consists of mutual provision of information by parties about their decisions on the approval of genetically modified commodities. The mutual information is channeled and organized through the Biosafety Clearing-House mechanism (Article 11 of the Cartagena Protocol). The information requested by the simplified procedure also includes a risk assessment report which has to satisfy the requirements laid down by the Cartagena Protocol (Annex II of the Cartagena Protocol).

Risk Assessment According to the Cartagena Protocol in Particular The Cartagena Protocol separates risk assessment and risk management in two distinct provisions. The objective of risk assessment under the Cartagena Protocol is ―to identify and evaluate the potential adverse effects of living modified organisms on the conservation and sustainable use of biological diversity in the likely potential receiving environment, taking also into account risks to human health‖ (paragraph 1 of Annex III of the Cartagena Protocol). As a general principle, risk assessment ―should be carried out in a scientifically sound and transparent manner, and can take into account expert advice of, and guidelines developed by, relevant international organizations‖ (paragraph 3 of Annex III of the Cartagena Protocol). Specifically relevant for many developing countries, paragraphs 2 and 3 of Article 15 of the Cartagena Protocol grant importing countries the right to require exporters to bear the burden of conducting the risk assessment, either by carrying it out or bearing its costs (Andrén and Parish, 2002:330). A third category of GMOs are those intended for ―contained use‖ limiting their contact with, and their impact on, the external environment (Article 3(b) of the Cartagena Protocol). + Derivative products which cannot transfer or reproduce genetic information, e.g. oil, flour, tomato sauce, eggs from hens fed with GM corn, etc., are excluded from the scope of the Cartagena Protocol (Boisson de Chazournes and Mbengue, 2004:298).

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The emphasis in the Cartagena Protocol on ―scientific soundness‖ is, however, not unlimited. First, the preamble and article 1 of the Cartagena Protocol reaffirm the ―precautionary approach‖ contained in article 15 of the Rio Declaration on Environment and Development. The ―precautionary approach‖ is of particular significance in cases where scientific knowledge is lacking. Accordingly, paragraph 4 of Annex III of the Cartagena Protocol specifies that circumstances where scientific knowledge or scientific consensus are lacking ―should not necessarily be interpreted as indicating a particular level of risk, an absence of risk, or an acceptable risk‖. Furthermore, Article 10 paragraph 6 and Article 11 paragraph 8 of the Cartagena Protocol provide that ―lack of scientific certainty … shall not prevent that [importing] Party from taking a decision‖. This provision enables importing countries to establish import bans on GMOs based on the fact that scientific evidence is lacking. With regard to the duration of such a ban, Zarrilli observed: ―The ban may last until the importing country decides that it has arrived at scientific certainty about the effects of the products on biodiversity and human health. However, since the importing country is not obliged to seek the information necessary to reach scientific certainty, a trade-restrictive measure may be in force without time limits‖ (Zarrilli, 2005:27). Second, as mentioned above, the Cartagena Protocol provides a separate article addressing risk management (Article 16 of the Cartagena Protocol). The term ―risk management‖ is described as the establishment and maintenance of appropriate ―mechanisms, measures and strategies to regulate, manage and control risks identified in the risk assessment provisions of this Protocol associated with the use, handling and transboundary movement of living modified organisms‖ (paragraph 1 of Article 16 of the Cartagena Protocol). The objective of risk management is stated to be the prevention of ―adverse effects of the living modified organism on the conservation and sustainable use of biological diversity, taking also into account risks to human health‖ (paragraph 2 of Article 16 of the Cartagena Protocol). However, risk management measures have to be ―based on‖ risk assessments which, in turn, ―shall be carried out in a scientifically sound manner‖ (paragraph 2 of Article 16 and paragraph 1 of Article 15 of the Cartagena Protocol). Third and most prominent, the Cartagena Protocol allows for taking into account socioeconomic considerations in decisions on the importation of GMOs. Paragraph 1 of Article 26 of the Cartagena Protocol allows countries to take into account socio-economic considerations ―arising from the impact of living modified organisms on the conservation and sustainable use of biological diversity, especially with regard to the value of biological diversity to indigenous and local communities‖. At least, governments taking into account socio-economic considerations have to do so in a manner that is ―consistent with their international obligations‖ (paragraph 1 of Article 26 of the Cartagena Protocol). Together, the provision on risk management, the recognition of socio-economic considerations and of the precautionary approach provide space for non-scientific, i.e. policy considerations for concerned governments (Khwaja, 2002:365). This room for maneuver for governments to take into account non-scientific considerations allows a nuanced equilibrium to the risk assessment procedures driven by scientific rigor.

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Risk Assessment According to the SPS Agreement The SPS Agreement in General From a historical perspective, the SPS Agreement may be understood as an element in the negotiations about the role of agriculture in the world trading system. Although the General Agreement on Tariffs and Trade (GATT) 1947 attempted to initiate trade liberalization in the field of agriculture, the relevant disciplines remained weak. Both big players, the European Economic Community (EEC) and the United States (US), pursued protectionist agricultural policies. The EEC established its heavily subsidized Common Agricultural Policy (CAP), and the US obtained a waiver for agriculture (Cottier and Oesch, 2005:713). However, things changed with the entry into force of the new WTO agreements in 1995. In particular, the WTO Agreement on Agriculture (AoA) explicitly addresses agriculture as an issue of multilateral trade regulation. In essence, the AoA constrained agriculture under the same regulatory principles as other goods. This change of agriculture from being a national prerogative to an issue of multilateral trade regulation is also referred to as ―commodification‖ of agriculture and its products. The main legal tool for achieving the objective of commodification was the requirement to convert quantitative restrictions into bound tariffs, a process called ―tariffication‖ (Cottier and Oesch, 2005:714). Although states still have some room for maneuver within their respective tariff bands, the AoA significantly restricted the capacity of states to protect their agricultural markets. National stakeholders in agriculture found themselves virtually locked into a system in which levels of protection for agricultural markets which were higher than those agreed on during the Uruguay round had faded away. In this situation, the only safeguard for reintroducing protection for national agricultural markets are trade restrictions justified on sanitary or phytosanitary grounds. However, in order to avoid a shifting of quantitative restrictions, in particular toward protectionist measures disguised as sanitary and phytosanitary measures, the SPS Agreement was established in conjunction with the AoA. The paramount objective of the SPS Agreement is to distinguish sanitary and phytosanitary measures (SPS measures) necessary for the protection of life and health of humans, animals and plants from protectionist measures disguised as SPS measures. In other words, ―[T]he SPS Agreement was considered necessary to avoid the replacement of the pre-WTO agricultural protectionism with new protectionist measures, particularly health and sanitary requirements‖ (Echols, 2001:3, 4). The tool for achieving the objective of restricting the use of food safety as a pretext for disguised protectionism is the reference to science. The SPS Agreement ―makes scientific principles and analysis the only valid basis for a permanent food safety measure, thereby limiting the ability of a government to place its citizens‘ cultural or religious beliefs about food above international commerce‖ (Echols, 2001:4). The requirement for scientific justification turns the SPS Agreement into a preservative for tariff concessions, ―particularly those made in the Agreement on Agriculture‖ (Echols, 2001:2). By invoking scientific principles for preserving tariff concessions, the SPS Agreement was characterized as being ―a legal turning point‖ (Echols, 2001:3). Echols noted: ―Its science-based rules displace centuries of food traditions and national attitudes toward food and food safety. The extent of this legal incursion into the cultural, psychological and sociological arena continues to evolve, as governments struggle in various fora to test and define the remaining sovereignty,

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as well as the nature and scope of the required underpinnings for food safety measures‖ (Echols, 2001:3). However, the SPS Agreement also provides some room for maneuver for governments to address issues beyond scientific certainty. Article 5.7 of the SPS Agreement addresses cases ―where relevant scientific evidence is insufficient‖. In such cases, governments ―may provisionally adopt sanitary or phytosanitary measures on the basis of available pertinent information‖ (Article 5.7 of the SPS Agreement). But, governments provisionally adopting SPS measures ―shall seek to obtain the additional information necessary for a more objective assessment of risks … within a reasonable period of time‖ (Article 5.7 of the SPS Agreement). In other words, the requirement for carrying out an ―objective‖ risk assessment in fulfilment of the requirements of Article 5.1 of the SPS Agreement and for providing sufficient scientific evidence for the established measure is only provisionally suspended, not abrogated. Failure to carry out a more objective risk assessment within a reasonable period of time might lead to ―undue delay‖ according to Annex C(1)(a) of the SPS Agreement, as was the case in EC—Biotech (see below, Background of the case EC—Biotech). The SPS Agreement covers foodborne hazards, animal diseases, and plant pests (paragraph 1(a)–(d) and paragraph 4 of Annex A of the SPS Agreement).

Risk Assessments According to the SPS Agreement in Particular The SPS Agreement only refers to ―risk assessment‖ and does not explicitly address ―risk management‖ (Article 5 of the SPS Agreement). However, the SPS Agreement provides for two distinct types of risk assessment, one considering pests and diseases, and the other focusing on food safety in the narrow sense. Additionally, the SPS Agreement provides for simplified risk assessment procedures in cases where scientific evidence is insufficient (Article 5.7 of the SPS Agreement). The first type of risk assessment addresses risks from animal diseases and plant pests and is defined as the evaluation of ―the likelihood of entry, establishment or spread of a pest or disease within the territory of an importing Member‖ (Annex A(4) of the SPS Agreement, first clause, emphasis added). The Appellate Body in EC—Hormones clarified that ―likelihood‖ has to be understood as ―probability‖, i.e. ―a higher degree or a threshold of potentiality or possibility‖. + The second type of risk assessment addresses food (and feed) safety risks in the narrow sense and is defined as the evaluation of ―the potential for adverse effects on human or animal health arising from the presence of additives, contaminants, toxins or disease-causing organisms in food, beverages or feedstuffs‖ (Annex A(4) of the SPS Agreement, second clause, emphasis added). The Appellate Body in EC—Hormones explained that ―the ordinary meaning of ―potential‖ relates to ―possibility‖ and is different from the ordinary meaning of ―‗probability‖.

+ EC—Hormones, para. 184. EC—Hormones, para. 184.

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However, besides the differences outlined in Annex A(4) of the SPS Agreement, both types of risk assessments follow the same principles of the SPS Agreement. These are, essentially, the requirements outlined in Article 5 of the SPS Agreement for proper ―risk assessments‖. Article 5 of the SPS Agreement, in turn, is based upon basic rights and obligations (Article 2 of the SPS Agreement). At the heart of the basic rules and obligations is paragraph 2 of Article 2 of the SPS Agreement, requiring, inter alia, ―that any sanitary or phytosanitary measure … is based on scientific principles and is not maintained without sufficient scientific evidence‖. Although the SPS Agreement does not mention ―risk management‖ or ―socio-economic considerations‖, it lists certain factors which shall be taken into account in the assessment of risks. In general, these factors are ―available scientific evidence; relevant processes and production methods, relevant inspection, sampling and testing methods; prevalence of specific diseases or pests; existence of pest- or disease-free areas; relevant ecological and environmental conditions; and quarantine and other treatment‖ (Article 5.2 of the SPS Agreement). Economic factors, in particular, shall be taken into account in cases where the life or health of animals or plants is at stake. These economic factors are ―the potential damage in terms of loss of production or sales in the event of the entry, establishment or spread of a pest or disease; the costs of control or eradication in the territory of the importing Member; and the relative cost-effectiveness of alternative approaches to limiting risks‖ (Article 5.3 of the SPS Agreement).+ With respect to the second type of risk assessment, the assessment of food-borne hazards, the Appellate Body in the EC—Hormones case provided the following clarification: ―It is essential to bear in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk ascertainable in a science laboratory operating under strictly controlled conditions, but also risk in human societies as they actually exist, in other words, the actual potential for adverse effects on human health in the real world where people live and work and die.‖ Turning to the special case of provisional measures according to Article 5.7 of the SPS Agreement, it was mentioned above that even in cases where scientific evidence is insufficient, the requirement for carrying out an ―objective‖, i.e. science-based risk assessment and providing sufficient scientific evidence for the provisionally established measure is only suspended, not abrogated (Cottier, 2002:471). Hence, ultimately, cases of insufficient scientific evidence have to follow the same overarching principle of the SPS Agreement, namely that sanitary measures must be justified by scientific evidence. In principle, the SPS Agreement requires WTO Members to ―base‖ their SPS measures ―on‖ a risk assessment (Article 5.1 of the SPS Agreement). On the other hand, however, the SPS Agreement offers a presumption of justification for measures which ―conform to‖ international standards (see Chapter 19 by Jusoh). Literally, the SPS Agreement provides that SPS measures ―which conform to international standards, guidelines or recommendations + Some scholars consider that Article 5.3 of the SPS Agreement might reflect a notion of ―risk management‖. See, inter alia, Boisson de Chazournes and Mbengue, 2004:303, footnote no. 101. EC—Hormones, para. 187, footnotes omitted.

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shall be deemed to be necessary to protect human, animal or plant life or health, and presumed to be consistent with the relevant provisions of this Agreement and the GATT 1994‖ (Article 3.2 of the SPS Agreement). In consequence, risk assessments are most critical in cases where governments intend to establish SPS measures resulting in higher levels of sanitary protection than would be achieved by measures based on the relevant international standard. For such cases, the SPS Agreement requires, in essence, a scientific justification (Article 3.3 of the SPS Agreement). In the end, reliance on scientific principles and scientific justification is the underlying rationale of the SPS Agreement. Whether governments base their SPS measures on international standards or opt for higher levels of protection, ―science‖ is chosen to determine whether an SPS measure is justified or not. In the first instance, international standards are presumed to be scientifically sound, and for higher levels of protection, scientific justification is required. Or, as Echols puts it: ―The SPS Agreement obligates governments to rely on scientific evidence in the development of a sanitary measure and makes scientifically confirmed risk the only acceptable justification for a permanent SPS measure. A risk assessment is integral to these requirements. Scientific principles and science, as opposed to tradition, are assumed to provide certainty and objectivity‖ (Echols, 2001:44).+

Risk Assessments of Biotech Products after EC—Biotech Background In the background of the case EC—Biotech is a long-standing transatlantic conflict over approaches towards the application of biotechnology in agriculture and products thereof.¥ This conflict erupted into a legal dispute before the WTO dispute settlement body. On one side were the United States (US), Canada and Argentina as complainants, and on the other side, the European Communities (EC) as respondents.§

The SPS Agreement explicitly recognizes the Codex Alimentarius Commission, the World Organisation for Animal Health, and the framework of the International Plant Protection Convention as ―relevant international organizations‖ (preamble, Article 3.4 and Annex A(3) of the SPS Agreement). + In the context of the case EC—Biotech, Perez commented that ―the Panel‘s submissive approach to science asks from science something it cannot deliver: complete determinacy‖ (Perez, 2007:278–279). ¥ Footer considered a ―regulatory divide‖ resulting from diverging approaches towards risk between the US and the EC (Footer, 2007:287–289). Extending the view to the position of developing countries in the GMO debate, Zarrilli noted: ―Countries‘ attitudes towards agrobiotechnology depend on many factors, but their positions can be classified into three main categories: (i) the position of those countries that have adopted the equivalence principle, have authorized most GM products for production and consumption, and strive for easy and reliable access to foreign markets for their biotechnology exports; (ii) the position of those countries that have mainly adopted the precautionary approach and are imposing strict rules on approval and marketing of GMOs and GM products; and finally (iii) the position of those countries that are still in the first phase of evaluating the risks and benefits that agricultural biotechnology may imply for them, that are striving to develop comprehensive regulatory systems on the issue, and whose main trade-related preoccupation at present is to prevent GM-related regulations and concerns having negative repercussions on their agriculture exports, including exports of conventional products. Many developing countries fall into the third category‖ (Zarrilli, 2005:45). § Additionally, the following countries with third party status were involved in the dispute: Australia, Chile, China, New Zealand, and Norway.

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Basically, the claim of the complainants consisted of three elements. First, the complainants argued that the EC had established a de facto moratorium on the approval of certain agricultural products deriving from the application of biotechnology (biotech products). Second, the complainants claimed that the EC had introduced various productspecific measures affecting the importation of biotech products. Third, the complainants accused certain EC Member States of having adopted safeguard measures prohibiting the import of biotech products. Accordingly, the Panel decided on each of the three elements of the claim separately. On the first point, the Panel concluded that the de facto moratorium of the EC did not constitute an ―SPS measure‖ within the meaning of the SPS Agreement. However, the Panel found that the de facto moratorium of the EC led to ―undue delay‖ pursuant to Annex C(1)(a), first clause, of the SPS Agreement with regard to the approval procedures applied to the biotech products at issue. On the second point, the Panel found that the challenged product-specific measures established by the EC were applied in a manner resulting in ―undue delay‖ in the sense of Annex C(1)(a), first clause, of the SPS Agreement.+ On the third point, the Panel found, among other issues, that the nine of the safeguard measures of certain EC Member States were not ―based on‖ a risk assessment pursuant to Article 5.1 of the SPS Agreement.§ This conclusion of the Panel will be further examined below (see Risk assessments of biotech products). First, however, the Panel was confronted with the task of circumscribing the scope and applicability of the Cartagena Protocol and the SPS Agreement. Furthermore, the relevance of the Precautionary Principle, invoked by the EC, for the case at hand had to be determined. This preliminary question will be discussed first.

Applicability of the Cartagena Protocol and the Precautionary Principle in WTO Law Faced with the question whether the Cartagena Protocol applies to the Precautionary Principle, and, if so, to what extent, the Panel started its deliberations by looking at Article 31(3)(c) of the Vienna Convention on the Law of Treaties (VCLT). Article 31(3)(c) of the VCLT basically reads that for interpreting a treaty, ―any relevant rules of international law applicable in the relations between the parties‖ shall be taken into account. The Panel interpreted the term ―the parties‖ in Article 31(3)(c) VCLT as signifying ―that the rules of international law to be taken into account in interpreting the WTO agreements at issue in this dispute are those which are applicable in the relations between the WTO Members‖.¥ By equating the term ―the parties‖ in Article 31(3)(c) VCLT with ―all parties to the treaty which is being interpreted‖, the Panel, in fact, required all WTO Members to be party to a treaty for this treaty to be applicable to a case under consideration.£ EC—Biotech, para. 8.14(a). + EC—Biotech, paras. 8.17 and 8.18(a). § EC—Biotech, paras. 8.21 to 8.30(b). ¥ EC—Biotech, para. 7.68, emphasis added. £ EC—Biotech, para. 7.70, emphasis added. The approach of the Panel for interpreting Article 31(3)(c) VCLT did not remain unquestioned. For a critical review see, for example, McGrady (2008), Fragmentation of

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Applying this interpretation of Article 31(3)(c) VCLT to the case EC—Biotech, the Panel questioned whether the CBD and the Cartagena Protocol are applicable. On the question whether the CBD is applicable, the Panel noted that ―like most other WTO Members, Argentina, Canada and the European Communities have ratified the Convention on Biological Diversity and are thus parties to it‖. On the other hand, the Panel observed that the US signed the CBD in 1993, but had subsequently not ratified it. Considering that the US, therefore, is not a party to the CBD, the Panel found that ―the Convention on Biological Diversity is not ―applicable‖ in the relations between the United States and all other WTO Members‖.+ On these grounds, the Panel concluded that it was not required to take into account the CBD in interpreting the WTO agreement relevant to the dispute at issue.£ On the question whether the Cartagena Protocol is applicable, the Panel observed that the European Communities are among the WTO Members which are party to it. On the other hand, the Panel noted that Argentina and Canada had signed the Cartagena Protocol, but have so far not ratified it, whereas the US has not even signed the Cartagena Protocol. Considering that neither Argentina or Canada nor the US are parties to the Cartagena Protocol, the Panel deduced ―that the Biosafety Protocol is not ―applicable‖ in the relations between these WTO Members and all other WTO Members‖.¥ Therefore, the Panel concluded that it was not required to take into account the Cartagena Protocol in interpreting the WTO provisions relevant to the dispute at stake (Peel, 2007:1029).§ Finally, on the question whether the precautionary principle had to be taken into account in the dispute at hand, the Panel first referred to the statement of the Appellate Body in EC— Hormones reflecting on the role of the precautionary principle. The Appellate Body in EC—Hormones once observed that the precautionary principle was considered ―by some‖ as ―having crystallized into a general principle of customary international environmental law‖. However, the Appellate Body considered it ―less than clear‖ ―whether it has been widely accepted by Members as a principle of general or customary international law‖.± The Panel in EC—Biotech, noting that the Appellate Body had made its statement in 1998, perceived that ―the legal debate over whether the precautionary principle constitutes a recognized principle of general or customary international law is still ongoing‖.≠ With respect to international jurisprudence, the Panel observed that ―there has, to date, been no authoritative decision by an international court or tribunal which recognizes the precautionary principle as a principle of general or customary international law‖.× On the other hand, with regard to rule-making at the international level, the Panel considered that ―provisions explicitly or implicitly applying the precautionary principle have been incorporated into International Law or ―Systemic Integration‖ of Treaty Regimes: EC—Biotech Products and the Proper Interpretation of Article 31(3)(c) of the Vienna Convention on the Law of Treaties, in: Journal of World Trade, 42(4): 589–618. EC—Biotech, para. 7.74. + EC—Biotech, para. 7.74. £ EC—Biotech, para. 7.74. ¥ EC—Biotech, para. 7.75. § EC—Biotech, para. 7.75. ± EC—Hormones, para. 123, emphasis by the Appellate Body, footnote omitted. ≠ EC—Biotech, para. 7.88. × EC—Biotech, para. 7.88, footnote omitted.

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numerous international conventions and declarations, although, for the most part, they are environmental conventions and declarations‖. Finally, with a view to the legal doctrine, the Panel noted that, on the one hand, ―many authors have expressed the view that the precautionary principle exists as a general principle in international law‖, whereas, ―at the same time, … others have expressed scepticism and consider that the precautionary principle has not yet attained the status of a general principle in international law‖.+ Concluding that the legal status of the precautionary principle ―remains unsettled‖, the Panel in EC—Biotech did as the Appellate Body in EC—Hormones had done and refrained from taking a position on this issue. The Panel justified its decision for not attempting ―to resolve this complex issue‖ as a matter of prudence and because of the lack of necessity to do so in the case at hand (Perez, 2007:267).× Summarizing the ruling of the Panel in EC—Biotech, one can draw the conclusion that in WTO disputes, rules of international law other than WTO provisions are only taken into account if all WTO Members have ratified the treaty concerned.≠ With regard to the precautionary principle, the Panel did not take a position on the question about its legal status in international law. However, the Panel also refrained from recognizing the precautionary principle as a general principle of international law.

Scope of the SPS Agreement Once the Panel had established that the Cartagena Protocol did not apply in the EC— Biotech case, the question arose of whether the SPS Agreement or another WTO agreement, for example the TBT Agreement, applies to the biotech products at issue± and the safeguard measures of certain EC Member States. In this regard, the Panel examined the EC Member States‘ safeguard measures and the risks which they addressed. Essentially, the safeguard measures of certain EC Member States (Austria, France, Germany, Greece, Italy and Luxembourg) fall into two broad categories: some of the safeguard measures addressed ―classical‖ food safety risks from biotech products to consumers, whereas others addressed risks from biotech products to the environment. The Panel, after a thorough examination, considered that both categories of safeguard measures were covered by the scope of Annex A(1) of the SPS Agreement which, obviously, extends to a wide range of measures protecting human, animal or plant life or health.§ EC—Biotech, para. 7.88. In footnote no. 263, the Panel explicitly referred to the Rio Declaration on Environment and Development, the Convention on Biological Diversity and the Cartagena Protocol. + EC—Biotech, para. 7.88. In footnotes no. 266 and 267, the Panel listed various authors according to their diverging positions. × EC—Biotech, para. 7.89. ≠ The Center for International Environmental Law (CIEL) criticized the approach of the Panel towards multilateral environmental agreements (MEAs) with the following words: ―The attitude of the Panel to ignore the importance of internationally negotiated instruments outside the WTO runs counter to the notion of mutual supportiveness‖ (Center for International Environmental Law (CIEL), 2006:50). Suppan qualified the approach of the Panel as reinforcing ―the schism between the WTO and the United Nations system‖ (Suppan, 2006). ± The biotech products at issue were: cotton, e.g. Monsanto Bt cotton (Bt-531) and Monsanto Roundup Ready cotton (RRC1445); maize, e.g. Syngenta glufosinate tolerant and Bt resistant maize (Bt-11), Pioneer Bt maize (MON809); oilseed rape, e.g. Bayer hybrid oilseed rape (MS8/RF3); soybeans, e.g. Pioneer/Dupont high-oleic soybeans (260-05); and various other crops, e.g. transgenic chicory, potato, and tomato. § EC—Biotech, paras. 7.2561–7.2922.

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From these conclusions of the Panel, the lesson can be drawn that the scope of the SPS Agreement not only covers food safety risks in the narrow sense, but extends to environmental risks deriving from GMOs.

Risk Assessments of Biotech Products As mentioned above (in the section on Risk assessments according to the SPS Agreement in particular), the SPS Agreement provides two types of risk assessments. The Panel in EC—Biotech applied the definition of ―risk assessment‖ in paragraph 4 of Annex A and Article 5.1 of the SPS Agreement to the safeguard measures at issue. In a thorough exercise, the Panel rebutted each of the documents put forward by EC Member States in justification of their individual safeguard measures as either not constituting proper risk assessments or as not being ―based on‖ a proper risk assessment pursuant to Annex A(4) and Article 5.1 of the SPS Agreement (Perez, 2007:271). The reasons given for the Panel‘s verdict varied for each document. For example, the Panel noted that documents put forward by Austria+ to justify its safeguard measure against the importation of T25 maize lacked an ―evaluation of likelihood‖ of gene flows from GMOs; ± documents put forward by France to justify its safeguard measure against the importation of MS1/RF1 oilseed rape did ―not ‗evaluate‖ the likelihood of the risks of establishment, entry or spread of a pest (in casu, hybrid plants)‖; ≠ a document put forward by Germany× in justification of its safeguard measure against the importation of Bt-176 maize ―asserts that there is a potential for adverse effects on human or animal health‖ from the presence of antibiotic resistance marker genes (ARMG), but the study ―does not determine likelihoods‖; § some documents put forward by Greece ¥ in support of its safeguard measure against the importation of Topas oilseed rape addressed herbicide-tolerant GM crops (GMHT crops) ―in general rather than focusing specifically on the Topas oilseed rape, and none of these studies evaluates the likelihood of adverse effects from the entry, establishment or spread of GMHT crops according to the SPS measures which might be taken by Greece to reduce any potential risks‖; £

In fact, the Panel extended the scope of the SPS Agreement on ―the entire EC legislative scheme relating to the environmental release of GM crops, and a substantial portion of its regulations of dealing with novel food authorizations‖ (Peel, 2007:1024). The decision of the Panel in EC—Biotech to solely apply the SPS Agreement has provoked intense discussions among scholars. See, among many others, Christiane R. Conrad, The EC—Biotech dispute and applicability of the SPS Agreement: are the panel‘s findings built on shaky ground? In: World Trade Review (2007), 6:2, 233–248. + e.g. the ―Hoppichler study‖. ± EC—Biotech, para. 7.3046. ≠ EC—Biotech, para. 7.3116. × E.g. a study from the Öko-Institut e.V. on the ―Therapeutical relevance of antibiotics in connection with the use of antibiotic resistance genes in transgenic plants‖. § EC—Biotech, para. 7.3151. ¥ Several reports resulting from the Farm Scale Evaluations (FSEs) conducted in the United Kingdom. £ EC—Biotech, para. 7.3170.

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a document put forward by Italy to justify its safeguard measure against the importation of T25 maize, MON810 maize, MON809 maize and Bt-11 maize ―constitutes, not a complete, self-contained, scientific evaluation of the potential for adverse effects on human or animal health due to toxicity and the development of antibiotic resistance, but only part of such an evaluation‖; + a document put forward by Luxembourg justifying its safeguard measure against the importation of Bt-176 maize ―calls for, but does not itself provide, further evaluation of the mechanism of gene transfer which might lead to the development of antibiotic resistance and of the risk of development of insects resistant to Bt toxin‖. £ On the other hand, the Panel recognized risk assessments carried out at the European Community (EC) level as complying with the requirements of Annex A(4) and Article 5.1 of the SPS Agreement. In this respect, the Panel observed ―that the assessments carried out by the lead CA¥ and by the EC scientific committees× constitute ―risk assessments‖ within the meaning of Annex A(4) and Article 5.1. of the SPS Agreement‖.§ In contrast to the EC Member States‘ evaluations, which were rebutted by the Panel for not constituting proper risks assessments, the Panel admitted that the evaluations carried out at the European Community (EC) level ―evaluated the likelihood of potential adverse effects on human health and/or the environment, as well as the associated potential consequences, according to the proposed use of the specific biotech product under consideration‖.≠ Summing up the considerations of the Panel in EC—Biotech, one can draw the conclusion that the requirements for assessments of biotech risks follow the same rules as laid down in the SPS Agreement, like any other risk assessment pursuant to Annex A(4) and Article 5.1 of the SPS Agreement. In short, a risk assessment for biotech products must, in any case, evaluate risks from GMOs to the environment and/or to human or animal health ―based on‖ scientific principles. Scientific principles, in turn, leave little room for nonscientific considerations, e.g. socio-economic considerations or consumers‘ perception (Davies, 2007:259).± Hence, risk assessments under the SPS Agreement are more restrictive regarding the ―remaining sovereignty‖ (Echols, 2001:3) of national governments than risk evaluations under the Cartagena Protocol.

The opinion by the Italian Superior Institute of Health of July 2000. + EC—Biotech, para. 7.3188. £ EC—Biotech, para. 7.3205. ¥ The competent authority of the EC Member State where the GMO at issue is to be placed on the market for the first time. × In the EC—Biotech case, the EC Scientific Committee on Food (SCF) and the EC Scientific Committee on Plants (SCP) were involved in risk assessment. § EC—Biotech, para. 7.3027, footnotes added. ≠ EC—Biotech, para. 7.3027, footnote omitted. The EC scientific committees found that the biotech products in question did not present any risk. See, inter alia, Perez, Oren (2007), Anomalies at the precautionary kingdom: reflections on the GMO Panel’s decision, in: World Trade Review (2007), 6:2, 265–280. ± Non-scientific factors permitted for taking into account in risk assessments according to the SPS Agreement are listed in Articles 5.2 and 5.3 of the SPS Agreement (See above section on Risk Assessments according to the SPS Agreement in particular).

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CONCLUSION Looking from the outside at the regulation of biotech products at the international level, one might assume that the Cartagena Protocol and the SPS Agreement would be complementary, the former addressing risks related to the release of GMOs into the environment, and the latter focusing on risk related to GMOs in food and feed. However, as the EC—Biotech case shows, the issue is more complex. As mentioned above, the Panel interpreted Article 31(3)(c) VCLT in a way that requires all WTO Members to be party to a treaty for the treaty concerned to be applied to the case at issue. This interpretation of the Panel effectively excludes the Cartagena Protocol from applicability in WTO disputes, as long as not all WTO Members are parties to it.+ The fact that the Cartagena Protocol is, at least for the time being, not applicable in WTO disputes, has several consequences: The Panel applied the SPS Agreement not only to risks related to GMOs in food, but also to risks related to environmental impacts of GMOs. In other words, food safety risks as well as environmental risks from biotech products fall under the broad scope of the SPS Agreement. From the finding that biotech products fall under the scope of the SPS Agreement, it follows that risk assessments also have to fulfill the relevant requirements laid down in the SPS Agreement. These requirements consist, essentially, in the obligation to ―base‖ risk assessments ―on‖ scientific principles and to provide, in turn, scientific justification for SPS measures through science-based risk assessments. As outlined above, the Cartagena Protocol and the SPS Agreement vary with respect to the factors and elements taken into account in analyzing risks (Zarrilli, 2005:29). Whereas the Cartagena Protocol allows for taking socio-economic considerations into account and for adopting a precautionary approach in assessing and managing risks, the SPS Agreement prescribes risk assessment as a procedure based on scientific principles. In other words, whereas the Cartagena Protocol provides space for non-scientific, i.e. policy considerations, the SPS Agreement confines the room for maneuver available to governments to measures justified by science-based risk assessments. A prominent example of non-scientific considerations is the perception of consumers. As noted by Kivilcim in Chapter 14, consumers‘ perception might be taken into account in procedures following the Cartagena Protocol. However, consumers‘ perception is not an issue of science-based risk assessments according to the SPS Agreement. Yet, unsurprisingly, consumers‘ preferences are increasingly being reflected by private standards beyond the scope of WTO law.±

EC—Biotech, para, 7.70, emphasis added. + However, the Panel explicitly did not take a position on whether it would take the Cartagena Protocol into account if all parties to the dispute—in contrast to all WTO Members—were also parties to the Cartagena Protocol (EC—Biotech, para, 7.72). ± For instance, Bonsi, Hammet and Smith observed that ―[I]n the Unites States, for example, lack of government supported eco-labeling programs has led to a profusion of more than 40 US eco-labels (excluding all the food labels)‖ (Bonsi et al., 2008:418). For further details on private standards see Chapter 19 by Jusoh in this volume.

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A WTO dispute where scientific evidence—in particular with regard to risks from biotech products—is insufficient, would be subject to Article 5.7 of the SPS Agreement, hence requiring concerned governments to complement the insufficient scientific evidence and to carry out a risk assessment without ―undue delay‖. This interpretation of Article 5.7 of the SPS Agreement leaves no room for applying the broader concept of the precautionary principle, as embodied in the Cartagena Protocol. In WTO disputes under the SPS Agreement, it is up to the party defending its sanitary measure against a complaining party to provide scientific justification and to carry out the underlying risk assessment. Under the SPS Agreement—and in contrast to the Cartagena procedures—a respondent has no right to require the complainant to carry out the risk assessment instead or to bear the costs of the risk assessment, a point particularly important from a developing country perspective (Zarrilli, 2005:29), and one which is also relevant for Turkey. Given the important role of international standards under the SPS Agreement, emphasis should be given to standard-setting processes at the international level with regard to biotech products. For instance, the Codex Alimentarius Commission established an Ad hoc Intergovernmental Task Force on Foods Derived from Biotechnology (TFFDBT) in 1999. One outcome of the work of the TFFDBT was the adoption of ―Principles for the Risk Analysis of Foods Derived from Modern Biotechnology‖ by the Codex Alimentarius Commission in 2003.+ Hence, improving participation in the risk assessment and risk management exercises of international organizations is essential for improving the risk analysis capabilities of developing countries in general and with respect to biotechnology risks in particular. In cases decided under the SPS Agreement so far, the main parties have been predominantly industrialized countries.± This fact reveals interdependencies between risk assessment policies and scientific, regulatory and institutional infrastructures. The dependency of an active risk assessment policy on a resource-demanding infrastructure is particularly challenging for developing countries.§ For developing countries aiming to upgrade their scientific and institutional capacities according to In contrast to the precautionary principle of the Cartagena Protocol, which allows countries to impose import bans for GMOs in cases where scientific certainty is lacking virtually without time limits, the SPS Agreement obliges countries to seek the additional scientific information ―necessary for a more objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a reasonable period of time‖ (Article 5.7 of the SPS Agreement) (Zarrilli, 2005:27). + See CAC/GL 44-2003, amended in 2008. Web access: http://www.codexalimentarius.net/ download/standards/10007/CXG_044e.pdf (visited: June 28, 2009). ± In the EC—Hormones case, the main parties were the US and Canada (complainants) and the EC (respondent). In the Australia—Measures Affecting Importation of Salmon (Salmon) case (WT/DS18/R, WT/DS18/AB/R), the main parties were Canada (complainant), and Australia (respondent). In the case Japan—Measures Affecting Agricultural Products (WT/DS76/R, WT/DS76/AB/R), the main parties were the US (complainant) and Japan (respondent). Exceptionally, in the EC—Biotech case, a middle-income developing country, Argentina, acted as a main complainant, together with the US and Canada. The main respondent was the EC. § With respect to the challenging situation faced by developing countries, Zarrilli observed: ―While developed countries have established their national frameworks to deal with agro-biotechnology and biosafety focusing primarily on domestic priorities and strategies, most developing countries are doing so under less flexible circumstances. Instead of enjoying the freedom to assess risks and benefits that agrobiotechnology may bring about and act accordingly, developing countries increasingly seem to be expected to set up their national regulatory schemes based on the requests and expectations of their main trade partners‖ (Zarrilli, 2005:45).

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Michael Burkard policies defined domestically and autonomously, it is, therefore, key to participate in the risk assessment and risk management activities of international organizations, in particular the Codex Alimentarius Committee, the World Organisation for Animal Health, and the framework of the International Plant Protection Convention. In building its institutional and technical capacity for risk assessment and risk management, Turkey could benefit from exploring these avenues at the international level. However, a prerequisite for active participation in international risk assessment and risk management exercises is the availability of trained personnel. Hence, proactive risk assessment policies are dependent on a robust public health infrastructure generating expertise in the field of human, animal and plant health (e.g. human medicine and food sciences, veterinary medicine and botany). In general terms, it can be concluded that austerity policies targeting expenditures on public health, veterinary services and plant research are counter to the improvement of risk assessment capacities. More specifically, it can be argued that the structural adjustment programs (SAPs) of the World Bank cutting down on public health expenditure are, at the same time, curtailing capabilities of developing countries to make informed decisions about the application of new technologies, for example biotechnology and nanotechnology, in agriculture and in the production and processing of food and feed.

Given that Turkey has recently decided to revise its regulatory and institutional frameworks to allow GMOs to be produced and consumed in the country (Isik, 2009), it is essential that it takes into account the regulatory challenges arising from its international obligations. Simply copying EU regulation might be inadequate to provide a legal framework conducive to the assessment and management of risks related to its specific socio-economic and environmental context. Finally, both risk assessment and risk management measures are only effective if they are accepted by relevant stakeholders. Hence it is crucial that Turkey should also reform its agricultural decision-making process so that important decisions in this field can be taken in a transparent and participatory way, involving all stakeholders. This would help Turkey manage better the risks and opportunities associated with new technologies in agriculture.

A proactive strategy with regard to the participation of developing countries in international risk assessment and risk management bodies goes beyond the technical approach of ―capacity-building‖. It requires a dialogue among all stakeholders, e.g. government, consumers‘ and environmental NGOs, industry, farmers‘ associations, academia, research institutions, etc. resulting in a consensual policy towards biotechnology reflecting, first of all, domestic interests and priorities. From a scientific perspective, Haslberger put forward the concept of an ―Integrated Safety Assessment‖ of GMOs, thus linking food safety and environmental considerations (Haslberger, 2006:3178).

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REFERENCES WTO Cases EC—Hormones. EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, 16 January 1998, Report of the Appellate Body. EC—Biotech. European Communities—Measures Affecting the Approval and Marketing of Biotech Products (WT/DS291, 292, 293/R), 29 September 2006, Reports of the Panel.

Books and Articles Andrén, R., & Parish, B. (2002). Risk assessment. In C. Bail et al. (Eds), The Cartagena Protocol on Biosafety. Reconciling Trade in Biotechnology with Environment and Development?, London: Earthscan Publications. Boisson de Chazournes, L. B., & Mbengue, M. M. (2004). GMOs and trade: issues at stake in the EC Biotech dispute. Review of European Community & International Environmental Law, 13, 289–305. Bonsi, R., Hammet, A. L., & Smith, B. (2008). Eco-labels and international trade: problems and solutions. Journal of World Trade, 42(3), 407–432. Center for International Environmental Law (CIEL). (2006). EC–Biotech: Overview and Analysis of the Panel’s Interim Report, March. Conrad, C. R. (2007). The EC—Biotech dispute and applicability of the SPS Agreement: are the panel‘s findings built on shaky ground? World Trade Review, 6(2), 233–248. Cottier, T. (2002). Implications for trade law and policy. In C. Bail et al. (Eds), The Cartagena Protocol on Biosafety. Reconciling Trade in Biotechnology with Environment and Development? London: Earthscan Publications. Cottier, T., & Oesch, M. (2005). International Trade Regulation. Law and Policy in the WTO, the European Union and Switzerland. Berne: Staempfli. Davies, G. (2007). Morality clauses and decision making in situations of scientific uncertainty: the case of GMOs. World Trade Review, 6(2), 249–263. Echols, M. A. (2001). Food Safety and the WTO. The Interplay of Culture, Science and Technology. The Hague: Kluwer Law International. Footer, M. E. (2007). Post-normal science in the multilateral trading system: social science expertise and the EC—Biotech Panel. World Trade Review, 6(2), 281–297. Graff, L. (2002). The precautionary principle. In C. Bail et al. (Eds) The Cartagena Protocol on Biosafety. Reconciling Trade in Biotechnology with Environment and Development?, London: Earthscan Publications. Haslberger, A. G. (2006). Need for an ―Integrated Safety Assessment‖ of GMOs, Linking Food Safety and Environmental Considerations. Journal of Agricultural and Food Chemistry, 54(9), 3173–3180. Isik, T. (2009). Genetically modified crops are coming [Genetigi degistirilmis bitkiler geliyor]. Radikal, 02.06.2009:4, available at http://www.radikal.com.tr/ Radikal.aspx?aType=RadikalDetay&ArticleID=938771&Date=03.06.2009&CategoryID =78

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Khwaja, R. H. (2002). Socio-economic considerations. In: C. Bail et al. (Eds), The Cartagena Protocol on Biosafety. Reconciling Trade in Biotechnology with Environment and Development?, London: Earthscan Publications. McGrady, B. (2008). Fragmentation of International Law or ―Systemic Integration‖ of Treaty Regimes: EC—Biotech Products and the Proper Interpretation of Article 31(3)(c) of the Vienna Convention on the Law of Treaties. Journal of World Trade, 42(4), 589–618. Peel, J. (2007). A GMO by any other name … might be an SPS Risk!: Implications of expanding the scope of the WTO Sanitary and Phytosanitary Measures Agreement. European Journal of International Law, 17(5), 1009–1031. Perez, O. (2007). Anomalies at the precautionary kingdom: reflections on the GMO Panel‘s decision. World Trade Review, 6(2), 265–280. Suppan, S. (2006). The WTO‘s EC—Biotech Products ruling and the Cartagena Protocol. Institute for Agriculture and Trade Policy (IATP), Trade and Global Governance Program, Minneapolis, available at http://www.tradeobservatory.org/ library.cfm?refid=78778 Zarrilli, S. (2005). International trade in GMOs and GM products: National and Multilateral Legal Frameworks. Policy Issues in International Trade and Commodities Study Series No. 29. New York: United Nations Conference on Trade and Development (UNCTAD), available at http://www.unctad.org/en/docs/itcdtab30_en.pdf

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc. .

Chapter 16

APPLICATION OF KNOWLEDGE TO RURAL DEVELOPMENT VIA NEW ICT-TOOLS Miriam Sahlfeld Clerk at the Swiss Federal Administrative Court

ABSTRACT This chapter looks at the application of knowledge to rural development via new information and communication technology (ICT) tools as. After a closer look at which technologies and devices would be suitable and affordable for knowledge transfer of specific knowledge to rural areas in developing countries, it will examine best practices in that regard and analyze the conditions under which the potential of ICTs can be used successfully to promote rural entrepreneurship and environmental sustainability, without destabilizing the targeted societies.

INTRODUCTION Several parameters of traditional rural farming have changed fundamentally over the past couple of decades. Developing countries, including Turkey, have been experiencing an increasing commercialization of farming and a growing volume of trade in agricultural products. At the same time, as discussed by Keyder and Yenal in Chapter 2, rural dwellers are no longer isolated from urban areas, or the ―modern‖ way of life—as new communication and transportation infrastructure eradicates physical boundaries between the rural and urban space. Whereas increasing integration and intensified economic activities have promoted growth, higher incomes and poverty alleviation in rural areas, they have also had negative impacts such as environmental degradation (see Chapter 10 by Karapinar; Chapter 11 by Aksoy). In this context, this chapter contends that an effective use of ICT-tools could promote knowledge-based rural development by further integrating rural and urban areas and bringing in new economic opportunities.

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This chapter is organized as follows. First, it addresses the general conditions of the use of ICT tools in developing countries in general, and in Turkey in particular. Second, it identifies the type of information and knowledge that can successfully be transfered via ICTtools with the aim of empowering farmers. Third, it offers an overview of best practices, with a special emphasis on Turkey. The chapter concludes with an evaluation of the future role of ICT-tools in rural development.

ICT-TOOLS IN THE RURAL PARTS OF DEVELOPING COUNTRIES Modern ICT-tools, such as the Internet, computers and mobile phones, are quite novel to rural areas in developing countries, given that rural dwellers often lack even a connection to an ordinary landline. Developing countries, depending on their level of economic development and geographic circumstances, have a very different exposure to ICT-tools. In this context, Turkey—as a middle income developing country—has been making some progress in its use of ICT-tools in rural areas. However, as discussed in the section below, this has been an asymmetric progress in which rural areas are lagging well behind the rest of the country.

Status Quo of Access to ICT in Developing Countries Of primary relevance to the use of ICT as an auxiliary for development in rural areas is the availability of a stable Internet connection and proper receiving devices. The ultimate objective is universal access—as was advocated by the Working Group on Internet Governance (Working Group on Internet Governance, 2005)—which has three components: availability, accessibility and affordability. However, there are various constraints on the economic potential of the Internet to become accessible for people in developing countries. Internet access requires a package of other infrastructure and equipment such as an electricity supply,+ a dial-up, wireless or landline broadband Internet connection, as well as the necessary hardware and software.§ There are further requirements, such as peering and interconnection agreements± and spectrum policy×. We will look at the types of Internet WGIG: Cluster 4 Assessment Report, April 25, 2005, http://www.wgig.org/docs/WGIGPaper-Cluster4development.pdf (last visited 13 December 2006), 1. + Electricity supply is a problem in the rural areas of developing countries. In 2000 the percentage of individuals without access to electricity amounted to a third of the population. The electric grids of bigger cities in developing countries tend to collapse if the number of users rises (Gopinath, 2006:4). The designers of MIT‘s 100-dollar laptop had this problem in mind when they equipped it with a hand crank. The Chinese product similarly consumes very little power. Another way to free users from an unreliable power supply is to use commercially available solar-powered PCs, although they are costly, see https://www.solarpc.com/catalog/, (visited 27.03.2007). Other than device-connected solar power is still too costly and pose the problem of energy storing, see Wikipedia, http://en.wikipedia.org/wiki/Solar_power (visited 31.3.2007). § As to the preconditions for using the Internet (in one‘s own language) (Pimienta, 2005:13). ± Interconnection standards and agreements including peering agreements are critical to the successful functioning of the Internet and for maintaining its end-to-end and cost-effective availability and reliability. In so-called peering agreements the Internet service providers in developed countries agree to accept traffic from one another‘s customers. The agreements are concluded between the different owners of the physical infrastructure and mostly confidential in nature. No data is available on whether the applicable International Telecommunication Union (ITU) recommendation D.50 is actually being implemented. Since the Internet

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connection and receiving devices in more detail as these are elements which farmers and entrepreneurs may be able—depending on the circumstances—to choose from various alternatives.

Access to the Internet As of 2008, slightly more than one billion people around the world had Internet access.1 Consequently, the remaining majority was not able to benefit from Internet applications spanning from e-mail and e-commerce to e-learning and more. The ways of accessing the Internet are manifold, mainly taking the form of fixed lines (coaxial cable, fiber optic or copper wires) and wireless.

Fixed Line Option The fixed lines encompass telephone cable and glass fiber cable which can be used for broadband access. Glass fiber is superior when it comes to transporting high bandwidth over long distances (Tongia, 2005:95). The penetration of many countries—developing and developed alike—with telecommunications infrastructure and broadband access is underdeveloped. The most typical form of access in developing countries is dial-up via telephone cables, using a modem, or via mobile phones, as we will see below. It seems very unlikely that the existing fixed landline infrastructure will remain the foremost and exclusive strategy for securing Internet access up to the last mile. It is expected that fixed landlines will be the technology for connecting cities, while smaller communities will have to rely on wireless access. Wireless Access Option Due to its ability to cover wide geographic areas, wireless is beginning to provide the most efficient solution for innovative and high-speed broadband services to consumers in remote and underserved areas. There are different types of wireless Internet broadband access. The most well known are WiMAX (Worldwide Interoperability for Microwave Access), WiFi as well as satellite WiBro (wireless broadband), UMTS-TDD (Universal Mobile Telecommunications System-Time Division Duplex), HSDPA (High Speed Downlink Package Access) and satellite. However, currently these alternatives are not economically traffic is not very dense and few users mail to developing countries, Internet service providers (ISPs) from developed countries have no business incentive to enter a shared-cost peering agreement with ISPs from developing countries. The agreements concluded instead are so-called transit agreements where the ISPs from developing countries pay for inbound and outbound traffic,thus subsidizing providers in the developed world. Unfortunately this is not only the case for international communication; even traffic within Africa might have to be routed via the US because of the lack of so-called Internet Exchange Points (IXP) within the developing countries.As peering agreements rely on a ―critical mass‖ of customers of each of the contracting ISPs, it is difficult to imagine how an African ISP could gain this critical weight if prices remain high and new customers cannot be won easily. IXP-construction is needed to reduce the cost for inner-African or South American traffic. × Wireless access via WiMax, WiFi or GPRS relies on spectrum policies, management and availability. The subject has therefore been on the agenda of international organizations. Unfortunately the developing countries which could profit most from this affordable technology are insufficiently represented in standard-setting bodies, such as the professional organization known as the Institute of Electrical and Electronics Engineers, Inc., which today is usually referred to as the IEEE.

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feasible ways in which to offer widespread access in rural areas in developing countries mostly because of the high costs of access and/or devices.≠ As far as access via mobile devices is concerned, the content available, e.g. over Wireless Application Protocol (WAP) might carry additional costs through licensing regimes or taxes. The mobile segment of the telecommunications sector in many countries has, however, been subject to more liberalization than fixed line telephone services (Keck and Djiofack-Zebaze, 2006:7).§

Receiving Devices In developing countries (lower and middle income), the availability of devices that may be connected to the Internet in 2007 was still below a ratio of 13 per 100 individuals (World Bank).× Even though there are now about 20 times as many personal computers (PCs) than 17 years ago, rural areas are lagging behind urban areas in terms of the pace of the spread of PCs.± There are currently two main strategies for increasing the number of devices able to connect to the Internet in rural areas in developing countries.

Cheap PCs One strategy is to produce and distribute cheap computers that are adapted to the typical environment of users in developing countries. The best known initiative carries the ambitious name of ―One Laptop per Child‖ or ―XO-Children Machine‖ and was launched in January 2005.+ The laptop was designed by a team working with Nicholas Negroponte, formerly Professor of the Massachusetts Institute of Technology (MIT), and the cost of production is about US$ 100 per machine. Solid and colourful, it is capable of nearly all common uses and runs only open source software. Millions of these laptops are already in production, with Thailand, Brazil, Uruguay and Rwanda, among others, signed up for the launch (Singel, 2007). Over a wireless local network the laptop will connect to a school server containing educational material. Internet access will depend on whether cable or wireless access is available. A similar product, a Linux-based desktop for US$ 150, is ready for sale by a Chinese firm called YellowSheepRiver Municator (Carney, 2006). In contrast to the MIT laptop it is not primarily aimed at children, but anyone who needs an affordable computer. It will primarily be sold in rural areas of western China as well as Southeast Asia (Carney, 2006). A list of other low-budget hardware products has been published by the Information for Development Program¥ of the World Bank. ≠ On satellite access (Tongia, 2005: 93). The reasons for the high prices differ from country to country. Kenya for example levies an excise tax of 10% on cell phone usage which unnecessarily slows down growth in related sectors (May, 2006). See in more detail (Hesselmark and Engvall, 2005:161). For Turkey see Wireless Systems Fees: http://www.tk.gov.tr/eng/doc/ wirelesssystemsfees.doc (visited: January 28 2008). § This is also true for Turkey where three operators offer mobile telephone services: Turkcell, Avea and Vodafone. × The World Bank‘s website offers under the heading of ―Data & Research‖ access to a search by topic which can be combined with a specific group of countries or an individual country. ± Table showing computer and Internet penetration rates ITU (2004) http://www.itu.int/ITU-D/ict/mdg/ (last visited May 14 2009); 13 persons per 100 were using a PC in 2004. + See the initiative‘s homepage with the technical specifications, http://www.laptop.org/laptop/ hardware/specs.shtml, (visited March 3 2007). ¥ http://www.infodev.org/en/Publication.107.html

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Cell Phones The second strategy tries to benefit from the much higher rate of adoption of cell phones in developing countries compared to any other ICT-device. For instance, in Africa, less than 15% of the population own a cell phone, but it is still the most prevalent ICT device.+ At the Consumer Electronics Show in February 2006, Microsoft launched a prototype of a "cellular PC" that used a television screen as a display and a keyboard for input. Both peripherals would be connected to the phone via special adapters. According to Microsoft, cell phones make more sense as a basis for inexpensive computers: they are common, relatively cheap, and the infrastructure for their usage already exists. Mobile technology is very attractive as a means to provide widespread access to the Internet in rural areas. Even if general packet radio service (GPRS) and enhanced data rates for GSM Evolution (EDGE) telecommunications providers still charge for downloading content by the kilobyte,§ leading to extraordinarily high prices for very little information and even if with these systems, voice traffic is given priority over Internet traffic thus considerably slowing down transmission: mobile telephony is mobile, is more common, more familiar and less demanding with respect to literacy and language skills (Tanburn and Singh, 2001:5). The initial investment in infrastructure for users and providers is lower and prices for telephones as well as telecom services are continually going down (Tongia, 2005:94).¥ The cell phone therefore is currently the ICT device for those of the rural poor who do not have access to Internet cafés or to PCs.

Trends in ICT-Tools in Turkey In Turkey, according to a longitudinal household survey in 2008, more than 80 percent of individuals living in rural areas had not used the Internet within the 3 months prior to the survey. As shown in Figure I below, although there has been some progress since 2005 when the percentage of those who did not use the Internet was more than 90 percent, these numbers indicate that the vast majority of rural dwellers do not have regular access to the Internet. The results also show that the usage rate is increasing relatively slowly. Between 2007 and 2008, the number of users among the rural population grew by only 3 percent. As expected, the level of Internet usage is substantially higher in urban areas. In 2008, based on the same survey, 43 percent of individuals living in urban areas reported having used the Internet within 3 months prior to the survey (Figure II). Urban usage is growing at a more rapid pace, thus increasing the gap with rural areas. The availability of landlines does not seem to be the main constraint here—as around 70 percent of the rural population had landlines in 2008. However, computer ownership seems to be the main factor. As is shown in Figure III, only 14 percent of rural households owned PCs in 2008. Similar to Internet usage, although there has been some progress from the very low base of 4 percent in 2005, the survey shows that PC ownership is not spreading rapidly in Mobile Telecoms—Out of Africa, The Economist, Dec. 6, 2006, 65.

+ For access to the topic see, http://www.mobileafrica.net/ and Esselar & Stork et al. (2005). § Example Ghana where 100 kilobyte cost about US$ 0.02, (Ajao, 2007). ¥ For India: Move it to your mobile phone, (2007) The Hindu, March 1 2007, http://www.thehindu.com/thehindu/seta/2007/03/01/stories/200703030100201700.htm (last visited May 14 2009).

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rural areas. On the other hand, in urban areas the number of households which owned PCs more than doubled from 16 percent in 2005 to 34 percent in 2008 (in addition, laptop ownership increased from 2 percent to 11 percent in the same period). Hence, computer ownership is a major constraint preventing rural dwellers from having access to the Internet. Yet, Turkey has not been part of the cheap PC initiatives mentioned above.

2005 Base 8% +2007 8% +2008 3%

No access 2008 81%

Source: TUIK, 2009, available at www.tuik.gov.tr (accessed May 2009) * Usage within three months prior to the survey Figure I. Internet Usage in Rural Turkey,* 2005–2008.

2005 Base 23%

No access 2008 57%

+2007 14%

+2008 6%

Source: TUIK, 2009, available at www.tuik.gov.tr (accessed May 2009) * Usage within three months prior to the survey Figure II. Internet usage in urban Turkey,* 2005–2008.

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100

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Source: TUIK, 2009, available at www.tuik.gov.tr (accessed May 2009) Figure III. Availability of personal computers in households, rural vs. urban, 2005–2008.

Despite the growing gap between urban and rural areas in terms of households‘ access to the Internet and to PCs, there is one area, namely cell phones, in which rural areas have been catching up with urban areas. Between 2005 and 2008, the percentage of rural households with cell phones increased from 60 percent to 82 percent (Figure IV). This means that the gap between urban and rural areas decreased by 22 percentage points in that period. It is also interesting to note that, as of 2008, the accessibility of cell phones in rural areas exceeds the accessibility of landlines. As such, cell phones are the most accessible ICT device in rural Turkey, extending beyond the use of ordinary ICT infrastructure. 100

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Figure IV. Availability of mobile phones in households, rural vs. urban, 2005–2008.

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Links between ICT and Poverty Reduction Within development literature, the link between ICTs and poverty has been well established (Flor 2001; Manohar 2005:47). Indeed, countries with high levels of ICT indicators (Internet hosts/1000 persons, telephone lines/1000 persons, television and PC ownership) generally rank high in the UN‘s Human Development Index and development indexes use ICT indicators (Stork, 2007:8). Further arguments are offered at the systems level, as McNamara (2003) notes: ―[ICTs] enable desired changes in the performance of institutions, markets, in the livelihoods of poor people and the vulnerabilities they face, in the capacity of individuals and governments since it is these changes, not ICTs that lead to poverty reduction and sustainable development. These outcomes—fewer people in poverty, more vibrant developing country economies, more responsive government institutions, reduced disease and illiteracy, greater gender equality— are the ultimate measure of the value and impact of ICTs in development.‖ It is obvious that the computer literacy rate is near zero in many rural areas where traditional forms of literacy would be considered a great achievement. On the other operating hand computers or cell phones require considerable less well-developed manual skills than writing. The representative, iconographic and acoustic possibilities of the computer means that users do not need to be fully literate if applications work with pictograms and sounds which require the operator only to push a few buttons to retrieve the desired information. Several evaluations of development aid projects state explicitly that literacy was no obstacle in using the ICT at a certain level. Even if ICT will allow people with poor literacy to participate in economic life, this success should not be allowed to lessen the efforts with regard to achieving the second Millennium Development Goal of universal primary education, which includes general literacy.

ICT-TRANSPORTABLE KNOWLEDGE TO PROMOTE RURAL DEVELOPMENT Ultimately the impact of ICTs will depend upon the relevance of content and the appropriateness of the design to the individual user (Lloyd-Laney, 2003). Bearing this in mind, Internet access in general represents a dramatic increase in knowledge anywhere in the world. Useful knowledge for specific purposes such as farming can be provided via ICT to small farming units at all stages of the production process. However, the search for and evaluation of the quality of the information gathered is a delicate matter. The experiences and advice stemming from other areas of the world may not be directly transferable to rural areas. The information and knowledge that can be useful to them has to be tailored to their specific needs and local peculiarities. A project done in Bolivia on transmitting information on animal health and production to poor livestock keepers shows that close collaboration with the future

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users of the ICT-tool is essential for success (Nielsen and Heffernan, 2006:891). Similar projects could be developed in Turkey too, but an assessment of the actual needs of the future users and of their preferences regarding the visualization of the information is indispensable (Nielsen and Heffernan, 2006:892–3).+ The next section offers some examples of the potential application of ICT-tools in rural areas.

Market Information Where is there a demand for an agricultural commodity? This is the most basic information required by farmers who produce a commodity in quantities greater than those needed to meet their own needs. Obviously this information is always provisional and subject to rapid change since it cannot be determined in advance how other areas growing the same crops and supplying the same markets will fare in a particular year. There are substantial information asymmetries, leaving farmers, especially small-scale producers, in a weak bargaining position vis à vis for instance middlemen and retailers. Hence, ICT tools such as cell phones can be used to provide farmers with up-to-date information about markets at the local, national and international levels, which would allow them to take informed decisions.

Standards The fragmentation between various public and private standards leads to huge business transaction costs as described by Jusoh in Chapter 19. Lack of access to information about standards regarding food safety, quality, packaging and transportation, among others, may prevent access to a market for many producers and be used as a basis for discrimination that can hardly be sanctioned. On the basis of failure to comply with standards, a producer‘s crops can be rejected, or having information on only one type of standard can tie producers to a single buyer. Farmers, especially small-scale producers, often lack necessary and precise information on standards. For standards to become a tool that empowers farmers to take entrepreneurial decisions, from the pre-harvest crop selection phase to post-harvest processing, information about the standards set by a range of potential buyers must be made available to small producers. The lack of information is particularly harmful to small-scale farmers in Turkey as they have neither the necessary financial skills nor the infrastructure and training necessary to enable them to gather reliable information. In this context, while the new production technologies mainly address the supply-side issues of farming, ICTs can help to improve demand-side management.

Precision Farming Another new area which could be covered by ICT is knowledge on precise farming practices. It is essential for farmers to have precise information on the timing of each farming A multitude of projects using ICT can be retrieved from the Stockholm Challenge Database,

http://www.stockholmchallenge.se/data (last visited June 29 2009).

+ The livestock farmers expressed preferences as to the language used for certain information. The software utilized visual and aural cues, thereby no literacy was required. The software even adapted the traditional frames for learning within the Andean communities.

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practice to fit with the requirements of a plant under the existing climatic conditions. Hence ICT-tools, including satellite technologies, can be used to provide farmer with real-time information on climate, weather and other ecological factors affecting their day-to-day operations.

Pests—identification and treatment Partly as a consequence of globalization, pests are spreading from their original habitats. As the cases of foot and mouth disease and bird flu have recently illustrated, there is an increasing risk of infection of plants or livestock with pests entirely new or new to a certain area, which find the farmers entirely unprepared. Having to travel a long distance to reach a veterinarian or a taxonomist and the difficulty of making such a journey often makes it impossible to intervene in time to prevent the destruction of entire crops or herds of livestock by a pest. ICT can make it possible for farmers to quickly obtain information identifying a pest or infection that might affect them, which would allow them to take rapid action.

Best Practices The following section highlights some recent implementations of ICT-tools in a rural context. Several such projects have received awards. The focus here is on ICT-applications that at least offer some knowledge transfer beyond the mere availability of ICT. Transactional services on commodity prices are by far the most common applications.+

Public Sector and NGO Activities While an ICT component seems currently to be a must in many aid projects, the financially strong donors such as the World Bank, the United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Programme (UNDP) fund a range of projects. The UNDP explicitly ―recognizes the key role that ICT can play in the fight against global poverty‖. Its five strategic areas for ICT4D-related intervention are comprehensive and focus on larger entities such as small and medium-sized enterprises (SMEs). The agricultural sector and the rural areas are not explicitly part of these strategic areas. However, the UNDP has provided support for a couple of interesting projects, such as those in China+ and Vietnam,§ without necessarily being the initiator of the project. In Turkey too, the UNDP promotes ICT-driven development. In fact, the Human Development Report 2004 was devoted to this issue (UNDP, 2004).

Details of other interesting projects can be found in the Annex of Ó Siochrú and Girard (2005). + For a general overview on possible ICT-applications for development (Mrayati, 2002). About UNDP and ICT for Development, see http://ictd.undp.org/it4dev/docs/about_undp.html. + UNDP supported the effort of the Chinese Ministry of Commerce, which began in 2001, to support a project in the poor counties of Chongqing Municipality, Hebei, Anhui, Henan and Shaanxi provinces centred around farming services on the Internet and has played an active role in upgrading farmers‘ skills and increasing incomes since then. There is unfortunately little information on the experiences in English or other western languages. § ―Lang Viet‖ 2004 funded together with UNCTAD.

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The Food and Agriculture Organization of the United Nations (FAO) contributed together with the infoDev, World Bank and AusAID to the spreading of PestNet, a network project aimed at taking timely and coherent action against the spread of certain pests in the Pacific region. As described in detail in the section below, the project involved, among other activities, the use of digital photography to improve the quality of the images submitted for identification of pests.

Indian Tobacco Company’s E-Choupal (ITC) Initiative Choupal is a Hindi word for a village square where elders meet to discuss matters of importance. The letter ―e‖ refers to the availability of computers with an Internet connection for farmers to gather around and interact not just among themselves but with people anywhere in the country and even beyond. ITC Agri-Business, India's second largest exporter of agricultural products, installs a computer with solar-charged batteries to provide power and a very small aperture terminal (VSAT) Internet connection (broadband via satellite) in selected villages. The computer should function without the usual troubles of power and telecom facilities in rural areas. A carefully chosen local farmer called sanchalak (conductor) operates the computer on behalf of ITC, but exclusively for farmers and this is supposed to inspire trust in the farmers seeking access to knowledge. The public role of the sanchalak is reinforced by a public oath-taking ceremony although he receives a commission for each completed sale (Annamalai and Rao, 2003:17; Dossani, Misra and Jhaveri, 2005). Type of Information Through the e-choupal initiative, ITC aims to confer the power of expert knowledge to even the smallest individual farmer, thus enhancing his competitiveness in the global market. ITC‘s e-choupal is the single-largest information technology-based intervention by a corporate entity in rural India, intended to transform the Indian farmer into a progressive knowledge-seeking ―netizen‖, enriching the farmer with knowledge; elevating him to a new order of empowerment. E-Choupal delivers real-time information and customized knowledge to improve the farmer's decision-making ability, thereby better aligning farm output to market demands; securing better quality, productivity and improved price discovery. The model helps aggregate demand in the manner of a virtual producers' co-operative, thus facilitating access to higher quality farm inputs at lower costs for the farmer. The e-choupal initiative also creates a direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and making the logistics more efficient (Annamalai and Rao, 2003:20). The e-choupal project is already benefiting nearly four million farmers. It offers farmers and the village community five distinct services: Information: Daily weather forecast, price of various crops, e-mails to farmers and ITC officials and news, all in the local language and free of charge. Knowledge: Farming methods specific to each crop and region, including soil testing, expert advice mostly sourced from agriculture universities—all for no cost via email. Soil testing allows for a fertilizer and pesticide application adapted to local conditions. Purchase: Farmers can buy seeds, fertilizers, pesticides and a host of other products and services ranging from bicycles and tractors to insurance policies. Over 35

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Miriam Sahlfeld companies have become partners in the e-choupal to sell their products through the network. The great advantage is that the sanchalak can aggregate demand and thereby benefit from economies of scale.. Sales: Farmers can sell their crops to the ITC centers or the local market, after checking the prices on the Internet. Development work: NGOs working to improve cattle breeds and water harvesting, and women‘s self-help groups are also reaching villages through e-choupal. In some states farmers can even access their land records online from their village. Access to health and education services through e-choupal started at the beginning of 2006. ITC e-choupal creatively leverages information technology to set up a meta-market in favor of India's small-farmers and poor farmers, who would otherwise continue to operate and make their transactions in ―unevolved‖ markets. Free access to the Internet is also opening windows in rural India onto the world at large. ITC echoupal is now being regarded as a reliable delivery mechanism for resource development initiatives (Trivedi and Kaur, 2007). The creators of the tool applied the information processing (IP) Theory for Learning which was developed by cognitive psychologists.

Drawbacks and Limitations E-choupal has achieved a considerable improvement in the situation of rural farmers. It has however diverted capital from the so-called Mandis which previously gained from buying, weighing and packaging of the key crops. People who used to be employed by Mandis have lost their work or have seen their incomes considerably reduced (Annamalai and Rao, 2003:32). One considerable limitation is that e-choupal is—although corporate—a paternalistic and more or less monopolisitic organization. The knowledge farmers can retrieve depends on ITC as it provides them with almost everything from seeds to sale. Should a farmer find another kind of seed better adapted to his area, he might not be able to receive it from ITC, but will have to turn to other possibly more expensive providers instead. Generally the system may be more efficient for trade, but it does not transfer capabilities to farmers, offering also a lot of irrelevant content instead (Dossani et al., 2005:32, 53). E-choupal, at least in Madhya Pradesh, suffers from widespread infrastructural and hardware problems. Both power shortages and connectivity are major issues. The kiosks, where the farmers could use the computer, had power for fewer than four hours a day. While most kiosks have uninterrupted power supplies as backups, and some even have backup solar power, these backup supplies are ineffective against massive grid power failure. Finally, it has to be noted that the e-choupal-system is not equally accessible to all members of Indian society, but that the underlying societal patterns of a given region dictate who has access and who does not, thereby excluding women and possibly members of the lower, landless casts (Dossani et al., 2005:28).

The IP theory relates learning to the appropriateness of the media to the particular learning style of the individual involved, and the relevance of the content to the learner (Clark and Sugrue, 1995:348 ff). Hence, the IP model identifies how the learner interacts with information to produce knowledge (Rieber, 2000). According to this theory, uptake is related to the ability of the media to optimize the learners‘ attention in order for the material to be committed to long term memory (Salomon, 1979; Howe, 1980; Jonassen and Grabowski, 1993).

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ICT-Tool for Bolivian Livestock Farmers Although the project does not directly refer to growing crops, its careful planning and continuous use make it worthwhile mentioning in this context. The Livestock Development Group of the University of Reading in the UK, developed an interactive, multimedia learning software program (―El Promotor‖) for the poor livestock keepers of the Altiplano in Bolivia, specifically designed to transfer animal health and production information. The target population included resource poor farmers with few or no years of formal education. The program also needed to be a stand alone and accommodate users with no previous exposure to computers and/or computer-based learning. To devise the initial content, household interviews were conducted with more than 800 farmers across three departments in the Altiplano. Ascertaining the appropriate content, however, was only one part of the overall design issues relating to ICTs; the tools also had to suit the learning styles of the users. Therefore, the interface was designed based upon the visual and oral didactics of the Altiplano. The designers of the program allowed the future users to choose from a variety of different styles, especially of pictograms, so that it would be acceptable as a working tool for adults. Similarly, the preferences regarding the language (local languages or Spanish) were taken into account (Nielsen and Heffernan, 2006:891). The programme was built to accommodate users‘ demands for specific information. Hence, the software enables users to choose the species and topics of interest. For each species a menu with options on animal health, feeding and housing was offered. After choosing a broad subject category, users could then focus on their specific area of interest. The software used visual and oral cues, thereby no level of literacy was required (Nielsen and Heffernan, 2006:893). The layout and design also had to accommodate traditional frames for learning. Learning and knowledge in the Altiplano is embedded both within social relationships and the mother earth or Pachimama. Therefore, to support such learning, illustrations had strong referents to the local environment and customary learning. For example, illustrations included well-known local geographic features in the background. Depictions of livestock-keeping were placed within scenes with community members of different ages, both male and female. Finally, the El Promotor was portrayed as a ―teacher‖ outside the scene and was also represented within the frame interacting with community members. Thus, the program used both denotative and connotative elements to support El Promotor as a nurturer within the learning habits of the Andes (Nielsen and Heffernan, 2006:893). A survey of the knowledge retrieved by pilot-testers showed that the information presented by the tool was able in some instances to correct traditional misperceptions about the causation of animal diseases. However the study demonstrates that the use of ICTs such as El Promotor will not instantly replace existing knowledge frames which are embedded in social structures, but rather should work within these contexts to enhance the connectivity of the poor to wider knowledge pools. This is not to advocate, however, the perpetuation of unhelpful or erroneous customary beliefs. Indeed, the poor have the right to correct knowledge, and ICTs that both support customary learning didactics and visual learning can greatly aid the poor in joining the global knowledge society.

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PestNet PestNet, which was started in 1999, using the Yahoo!Groups email listserver, allows members to exchange messages on insect and disease problems affecting food crops; quarantine; biological control; pest management; and pest outbreaks, and to send images of pests for identification to taxonomists (Liebregts and Jackson, 2006).+ It also allows for the testing local remedies against pests. The information service is especially valuable to farmers in isolated rural areas and in the archipelagos. While it started in the Solomon Islands of the Pacific, the Net has been extended to include the Caribbean. The first main sponsor was infoDev. However the FAO also made considerable contributions. When PestNet first started, it had no homepage and communication was purely by email. Currently PestNet offers various services to its dispersed users: collecting, processing and dispatching insects and diseased specimens for identification overseas; use of digital cameras for photographing pests and disease manifestations; formatting and sending electronic messages to PestNet and taxonomists; manipulation of images for easy download; coordination and execution of Practioners‘ Training Workshops; use of web-based diagnostic and plant protection services, particularly EcoPort§ and the development of photographic libraries on specialist web sites. The major problem for the widespread use of PestNet is the limited extent of the telephone and Internet network(s) in the countries, the relatively high costs of Internet access, the unfamiliarity of end-users with accessing Internet resources, and the costs of equipment. The rapidly increasing coverage of cell phone networks however should allow a significantly more efficient distribution of information to farmers. Several cell phone networks already allow the sending of text and images via cell phones, and this would enable farmers to send and receive information on-site, without the need of a computer terminal. It is this development in particular that would significantly promote the use of PestNet and similar services that deliver agricultural information and solutions directly to farmers and extension officers, and improve agricultural productivity and food security in the Pacific and the Caribbean. China In China, ICT-tools especially designed for farmers started to become available in early 2001 with the assistance of the UNDP.+ The information services provided range from fruit diseases and pest control to crop forecasting and market prices.§ China has the advantage of a relatively high literacy rate (in Chinese) which is not the case in many other developing areas where language might amount to a barrier.

See Webpage: http://www.pestnet.org (last visited July 14 2009) + Kastom Gaden Association, Planting Materials Network, Department of Agriculture and Livestock, and PestNet, Linking Farmers to Plant Protection Network (Solomon Islands), Project #1222, infoDev, The World Bank, Mission Report 1, July 24 to August 12 2003. § EcoPort is a database of plants, pests, climate, soils, and more, provided by FAO, http://www.ecport.org. Funds for poor areas to surge this year, May 4 2004, http://www.news.xinhuanet.com/english/200405/04/content_1452787.htm (visited Nov. 11 2007). + http://www.apdip.net/resources/case/rnd42/view (last visited January 12 2009). § http://www.agri.com.cn/

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EVALUATION OF INTRODUCTION OF KNOWLEDGE INTO RURAL AREAS VIA ICT The first and most obvious lesson from the different best practice examples is the importance of recognizing the limits of transferability of experiences gained at one location. Indian and Chinese farmers need might need different solutions from those suitable for Turkish farmers.

Geographic Location Turkey‘s geographic closeness to sophisticated markets with fragmented private standards, such as the EU—a similar situation to that of Mexico with respect to the US and Canada—makes Turkish farmers potential exporters of agricultural products, while Indian farmers predominantly produce goods that are sold mainly on domestic markets. The existence of distinct export markets thus also affects the relevant content for a potentially successful ICT-tool.

Scope of the Project A second point for deliberation the reason for connecting an area to the Internet: is it for all sorts of purposes? or is it intended to improve the existing local traditional way of farming? or will it function as a resource pool for farmers as part of an all embracing concept? There is nothing wrong with any of these objectives. However, implementation and expectations should fit with the objective set out (Curtain, 2004). As with all online information, it is essential that the information available be the most up-to-date and reliable if it is to include short-lived information. A simple website design will not to do the job. Constant administration and maintenance is required.

Reaching Out to the Users The lack of knowledge and of successful transfer mechanisms is still the main reason for disappointing development. Before modern ICT-tools became available, the radio was thought to be an optimal tool for knowledge transfer (Scheck, 2002:15) if the content was culturally relevant, properly explained and correctly targeted (Schramm, 1967:16).+ While the radio technology left audiences more or less to themselves, it was at least sure to reach out to many passive listeners. ICT-tools reach only to those who actively search for information and are willing to learn how to use the resources available (Castells, 1997). As can be seen from the examples above, becoming familiarized with one ICT-tool, such as the e-choupal or El Promotor does not entail computer literacy or any knowledge of ICT. Projects centered For an integrated approach as opposed to ignoring, isolating or idolizing ICT, Heeks (2002:6). + Although many projects were conceived to convert the radio to a push medium, or at least into a means of twoway communication, the radio created primarily a one-way flow of information.

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around knowledge transfer will include some assessment of relevant content and subsequent user training. Even if users will remain confined to the content that is readily provided by the developer of the ICT-tool, they may at least benefit from the knowledge and information they have learned to retrieve. Careful analysis of the learning patterns and other relevant factors in a given society will enable the often encountered design–reality gap to be bridged.§

Social and Cultural Environment The success of an ICT-tool, namely its acceptance, the accomplishment of knowledge transfer and, ideally, interaction also very much depends on whether the tool ends up being disruptive of traditional social structures and cultural practices. The availability of a new type of information should neither devalue nor supersede traditional local knowledge and customs. In more egalitarian peasant societies, such as that of China, the introduction of new informational tools accessible to everyone seems to be easier than in tribal, feudal and clanlike societies where knowledge was and will continue to be administered by a leading or especially trustworthy person. The technology might, however, lead farmers to deviate from traditional intermediate structures. If new crops and new methods of farming are introduced, it appears to be important to take into account social hierarchies and the traditional role of women and possibly to take into account the need to reach young people in the area. This will also mean that an ICT-tool, with the objective of transferring relevant knowledge to rural areas, should be designed to be inclusive.

CONCLUSION In light of the growing gap between rural and urban areas of Turkey in terms of their access to ICT, agricultural and rural policies should promote and invest in this technology. In the short run, cell phones, as the most widespread ICT tool, could be used to enhance farmers‘ access to information on markets, day to day farming operations, climate conditions and other beneficial data. In the long run, fixed line broadband or qualitative equivalent wireless access to the Internet should be promoted. Even if Internet content can be received on a cell phone, interactivity becomes burdensome if there is more to it than looking at the weather forecast or market prices. ICT may play an important role in rural development projects if it is adapted to the needs, capabilities and preferences of the target groups. Preference should be given to an integrative approach that takes into account social, economic and cultural conditions at the local level. Where there are limited government resources, priority should be given to projects where the marginal benefit of ICT is high and continuously updated information or communication is essential for economic activities.

§ A positive example is the Bolivian El Promotor.

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ACKNOWLEDGMENTS The author is greatly indebted to Dr Baris Karapinar for providing, translating and visualizing data on ICT in Turkey.

REFERENCES Ajao, O.D. (2007). Mobile Internet in Ghana. Mobile Africa, March 5, 2007, http://www.mobileafrica.net/a91.htm (last visited May 14 2009). Annamalai, K., & Rao, S. (2003). What works: ITS‘s E-Choupal and profitable rural transformation. Case study report on E-Choupal in Rural Madhya Pradesh. Michigan: The University of Michigan School of Business, 1-31, available at: http://www.digitaldividend.org/pdf/echoupal_case.pdf (last visited May 14 2009). Carney, S. (2006). One Cheap Desktop for All. Wired News, available at http://www.wired.com/news/culture/0,71222-0.html (visited March 3.2007). Castells, M. (1997). The Information Age: End of Millennium vol. III. Oxford: Blackwell. Clark, R. E., & Sugrue, B. M. (1995). Research on instructional media (1978-88). In G. Anglin (Ed.), Instructional Technology: Past, Present and Future. Englewood, CO: Libraries Unlimited, 348-364. Curtain R. (2004). Information and communications technologies and development: help or hindrance? Report Commissioned by the Australian Agency for International Development (AusAID), 1–67, available at: http://www.developmentgateway.com.au/ jahia/webdav/site/adg/shared/CurtainICT4DJan04.pdf (last visited May 14 2009). Dossani, R., Misra, D. C., & Jhaveri, R. (2005). Enabling ICT for Rural India (. Stanford University: Asia-Pacific Research Center National Informatics Centre, 1-75, available at: http://iis-db.stanford.edu/pubs/20972/ICT_full_Oct05.pdf (last visited May 14 2009). Esselar, S., & Stork, C. (2005). Mobile cellular telephone: fixed line substitution in subSaharan Africa. Southern African Journal of Information and Communication, 6, 64–73. Flor, A. (2001). ICT and Poverty: The Indisputable Link. Washington, DC: World Bank Publications. Gopinath, K. (2006). Mobile Web and developing countries. Contribution to the W3C Workshop on the Mobile Web in Developing Countries, December 5–6, 2006, available at: http://www.w3.org/2006/07/MWI-EC/PC/gopinath.pdf (last visited May 14 2009). Heeks, R. (2002). i-Development not e-development. Journal of International Development Special Issue on ICTs and Development, 4, 1–11. Hesselmark, O., & Engvall, A. (2005). Economic development in Africa powered by mobile telephony. In S. Danovsky (Ed.), Open Access for Africa, Challenges, Recommendations and Examples. Paris: UNESCO. Howe, M. J. A. (1980). The Psychology of Human Learning. New York: Harper & Row. Jonassen, D. H., & Grabowski B. L. (1993). Handbook of Individual Differences, Learning and Instruction. London: Lawrence Erlbaum Associates. Keck, A., & Djiofack-Zebaze, C. (2006). Telecommunication services in Africa: The impact on multilateral commitments and unilateral reform on sector performance and economic

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growth. WTO Staff Working Paper No. ERSD-2006-10, available at SSRN: http://ssrn.com/abstract=946907 (last visited May 14 2009). Liebregts, W., & Jackson G. V. H. (2006). Pacific PestNet: Meeting plant protection needs in the 21st century. FAO Technical Cooperation Programme, Pacific Regional, Final Report, Suva, Fiji Islands, April 2006. Lloyd-Laney, M. (2003). Making Knowledge Networks Work for the Poor: Final Report. Warwickshire: Practical Action. Intermediate Technology Development Group (ITDG). Manohar, M. (2005). Information and communication technology applications in development: India as a role model for other developing countries. Information Development, 21, 47–52. May, G. (2006). Excise duty on mobile phone usage not justified. Mobile Africa, August 21, 2006, available at http://www.mobileafrica.net/a73.htm (visited March 31 2007). McNamara, K.S. (2003). Information and communication technologies, poverty and development: learning from experience. InfoDev Annual Symposium, December 9–10th, Geneva, available at: http://www.infodev.org/files/ 1041_file_Learning_From_Experience.PDF (last visited May 14 2009). Mrayati, M. (2002). Possible models of initiatives to promote ICT for employment and poverty alleviation. ESCWA, Forum on Technology, Employment and Poverty Alleviation in the Arab Countries, July 16–18, 2002, available at: http://www.escwa.un.org/mtecpr/docs/eradication.pdf Nielsen, L., & Heffernan, C. (2006). New tools to connect people and places: The impact of ICTs on learning among resource poor farmers in Bolivia. Journal of International Development, 18, 889–900. Pimienta, D. (2005). Models and approaches linguistic diversity in cyberspace—models for development and measurement. In UNESCO Institute for Statistics Montreal, Canada (Ed.), Measuring Linguistic Diversity on the Internet. Paris: UNESCO. Rieber, L.P. (2000). Computers, Graphics & Learning, originally published in Madison, Wisconsin in 1994: WCB Brown & Benchmark. Salomon, G. (1979). Interaction of Media, Cognition, and Learning: An Exploration of How Symbolic Forms Cultivate Mental Skills and Affect Knowledge Acquisition. London: Jossey-Bass. Scheck, S. (2002). Wired for change: The links between ICTs and development discourses. Journal of International Development, 14, 13–23. Schramm, W. (1967). Communication and change. In W. Schramm & D. Lerner (Eds), Communication and Change in Developing Countries. Honolulu: East-West Center Press. Singel, R. (2007). High Security for 100$ Laptop. Wired News of Feb. 7, 2007, available at http://www.wired.com/news/technology/0,72669-0.html?tw=rss.index (last visited May 14 2009). Siochru, S. O, & Girard, B. (2005). Community-based networks and innovative technologies: New models to serve and empower the poor. A Report for UNDP, available at: http://www.undp.org/poverty/docs/ictd/ICTD-Community-Nets.pdf (last visited May 14 2009). Stork, C. (2007). Sustainable Development and ICT Indicators. Manitoba: International Institute for Sustainable Development.

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Tanburn, J., & Singh, A.D. (2001). ICTs and enterprises in developing countries: hype or opportunity? Series on Innovation and Sustainability in Business Support Services, Seed Working Paper, No. 17, International Labour Organization. Tongia, R. (2005). Open access networking in Africa: The FiberAfrica Proposal. In S. Danovsky (Ed.), Open Access for Africa, Challenges, Recommendations and Examples, p. 94. Paris: UNESCO. Trivedi, T., & Kaur R. (2007). Cause related marketing. In: Corporate Social Responsibility, PART III—Social, Public Service and Cause Related Marketing, Kozhikode: Indian Institute of Management, 193-201, available at: http://dspace.iimk.ac.in/bitstream/ 2259/370/1/193-201.pdf (last visited May 14 2009). UNDP (2004) Human Development Report, Turkey. Information and Communication Technologies, available at: http://hdr.undp.org/en/reports/nationalreports/europethecis/ turkey/turkey_2004_en.pdf (last visited May 14 2009). Working Group on Internet Governance. (2005). WGIG: Cluster 4 Assessment Report, April 25, 2005, http://www.wgig.org/docs/WGIGPaper-Cluster4-development.pdf (last visited May 14 2009).

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 17

BIOFUELS IN TURKEY Asli Isler and Filiz Karaosmanoglu Istanbul Technical University, Turkey

ABSTRACT Biofuels are a form of renewable energy produced from biomass. Biofuels, as a clean alternative to the fossil fuels, are of wide interest due to the increasing world energy demand and high fossil fuel prices. Using biofuels to partly replace fossil fuels has environmental and economic benefits and it is also an important way of utilizing renewable sources and providing a variety of sources of energy. Production and use of biofuels have a lot of advantages at local, state, and national levels. Biofuel production provides additional income to the local economy and households, while also contributing to job creation. Benefits to agriculture and the rural economy are of crucial importance to the countries that produce biofuels. Biofuels are classified into first, second, third, and fourth generations in this chapter; first-generation biofuels are examined in detail by focusing on bioethanol, biodiesel, bioheat, and bioelectricity production, while emphasizing their potential for today and for the future by considering alternative policies. The importance of biofuels in Turkish plant and energy agriculture, the opportunities they provide, and related research and development are also explored by taking into account the world‘s and the EU‘s positions.

INTRODUCTION Biobased industrial products are products other than food or feed that are composed completely or mostly of renewable resources, including plant and animal materials. They do not contain synthetics, toxins, or any materials harmful for the environment. Biobased products are based on photosynthesis, and plants that store biological (―green‖) carbon. Production of materials from green carbon using the tools of biotechnology is one of the areas on which many bioengineering applications and research and development studies are currently being carried out.

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Biobased industrial product technology was initiated in the 1960s with the ―Green Revolution,‖ and it is expected that biobased products will play significant roles in several industries in the 21st century, which is often called the ―Biotechnology Century.‖ Biorefineries that are used to produce biofuels look like oil refineries, but instead of oil they use biomass as feedstock. Currently a flexible product mixture that involves biochemicals, biomaterials, and biofuels, as well as the production of heat, cold, and electricity can be obtained by using different conversion technologies. In the 21st century the bioeconomy is widening and it is expected that biobased products and biofuels will be introduced into our daily life at an increasing rate. Biomass is a general term for materials derived from growing plants and animal manure. It is a term used to describe all biologically produced matter. It refers to: wood (energy forests and woody residues); oilseed plants (sunflower, rapeseed, soybean, etc.); carbohydrate plants (potato, wheat, corn, beet, etc.); fiber plants (linseed, hemp plant, sorghum, etc.); vegetal wastes (branch, stalk, straw, root, husk, etc.); animal wastes; municipal and industrial wastes; and algae. Biomass is an environmentally strategic energy resource, which can be produced with minimal requirements, and it also has significant influences on socio-economic development. Biomass energy technologies capture the energy stored in biomass and make it available in useful forms. Traditionally biomass has been utilized through direct combustion, and this process is still widely used in many parts of the world. Another means of utilizing it is realized through conversion technologies. From these technologies many solid, liquid, and gaseous biofuels can be obtained as alternative fuel candidates (Karaosmanoglu, 2006). Based on production types and feedstock choice, these fuels are classified as first-, second-, third-, or fourth-generation biofuels. First-generation biofuels (2000–2010) can be used in engines without requiring the design to be modified. The most common first-generation engine biofuels are bioethanol (from starchy and sugary feedstocks) and biodiesel (fatty acid methyl esters). The other first-generation biofuels are bioethyl tertiar buthyl ether and biogas. For biodiesel and bioethanol (engine biofuels) production, agricultural products are used, while wastes are used for biogas production. Second-generation biofuels (2010–2030) are biofuels that will be used in flexi-fuel vehicles and/or for heat, cold and electricity production after 2010. Vegetable oil, bioethanol from lignocellulosic sources, biodiesel (fatty acid ethyl esters), biomethanol, biobuthanol, bio-ethyl tertiar buthyl ether, bio-methyl tertiar buthyl eter, bio-dimethylether, biomethane, biohydrogen and biomass to liquid products are the second-generation biofuels. Such fuels are produced from cellulosic materials, which include agricultural residues, forestry residues, and non-food crops. These raw

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materials may be considered more sustainable and do not compete directly with food. New technologies are being developed to produce biofuels from cellulosic materials. Third-generation biofuels (2030– ) are fuels obtained from algae, or liquid or solid biofuels obtained by integrated biorefinery technology from trees, grass, weeds, wastes, residues, and new oilseeds, or, most promisingly, biofuels that are produced from genetically modified vegetables that contain less lignin and more cellulose. Fourth-generation biofuels (2030– ) are known as carbon-negative biofuels, and they are produced from feedstocks with consummated genetics. With developed technologies like sequestration and carbon holding, lower emissions of carbon dioxide (CO2) will be released to the environment. It is unknown how soon after 2030 fourth-generation biofuels will be used commercially. In the future biofuels will play crucial roles in the energy sector. According to the International Energy Agency (IEA) 2008 report, for the years between 2000 and 2030 there are two scenarios, the reference and the alternative scenario. Figure I shows the reference scenario for the primary energy supply for the world in units of million tonnes of oil equivalent (Mtoe). According to the reference scenario, in 2030 fossil sources will have a share of about 85 percent in the primary energy supply and the share of renewable energy will be about 15 percent. Biomass will have an important place among the renewable energy resources. The share of biofuels will be four percent in 2030. According to the alternative scenario, biofuels will have a share of about seven percent in the transportation sector. According to both scenarios, the USA, the EU and Brazil will be the leading countries in using biofuels. It is expected that bioethanol will be the leading biofuel. Today only one percent of the area suitable for agriculture is used for biofuel production. It is expected that this value will increase to two percent according to the reference scenario, and 3.5 percent according to the alternative scenario. Biofuels seem to be the locomotive for bioeconomic development. In this chapter first-generation biofuels and the use of biomass for heating, cooking and electricity production are studied by focusing on the biofuel potential today and in the future. Special emphasis will be given to the role of energy agriculture and the relationship of biofuels with the environment and food. In addition, biofuel policies in the EU and Turkey will be examined.

Biofuels and use of Biomass In this section biodiesel, bioethanol, biogas, heating and cooking with biomass energy, and electricity production are examined in detail.

Biodiesel Biodiesel is a mixture of fatty acid methyl esters that is produced by transesterifying triglycerides such as animal fats or vegetable oils with alcohol in the presence of a base or acid catalyst according to the standards TS EN 14213 for heating fuel-biodiesel and/or TS EN

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14214 for auto-biodiesel. Biodiesel can be used directly or it can be blended with diesel fuel in the fuel sector. Biodiesel can be produced from: vegetable oils; animal fats; edible oil technology byproducts; yellow grease; brown grease; trap grease; sewage grease; black grease; and algaes (Knothe, Gerpen and Krahl, 2004). Mtoe

18 000

Other Renewables

16 000

Hydro

14 000

Nuclear

12 000

Biomass

10 000 8 000

Natural Gas

6 000

Coal

4 000 Oil

2 000

0

1980

1990

2000

2010

2020

2030

Source: IEA (2008) Figure I: Reference scenario for primary energy supply for the world

Figure I. ReferenceSource: scenario for primary energy supply for the world. IEA (2008)

The history of biodiesel started in 1892 with the invention of the Diesel engine, developed by Rudolph Diesel (1858–1913), who improved his prime model in 1893 for practical use. Using the technology of transesterification of vegetable oils, he displayed his invention, fueled with peanut oil, three years later at the World Exhibition in Paris. The first industrial biodiesel production was achieved in 1988 in Austria with a capacity of 10,000 tonnes per year. Since the beginning of the 1990s biodiesel has been extensively tested by government agencies, university researchers, and private industry (Mittelbach and Remschmidt, 2004). Figure II shows world biodiesel production from 1996 to 2007. In 2007 annual biodiesel production was 10.2 billion liters. Germany is the leading country with half of the world‘s biodiesel production. France, Italy, and the United States are the other countries that have been increasing their production. In the European countries, market share and acceptance of biodiesel have increased with new policies. Biodiesel is the most important biofuel in the EU, representing almost 80 percent of biofuel consumption. In 2007 EU biodiesel production was 5.7 million tonnes, exhibiting a 17 percent increase when compared with the amount produced in 2006 (Earth Policy Institute, 2009).

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12

Billion Liters

10 8

6 4

2 0 1996

1998

2000

2002

2004

2006

Year

Source: Earth Policy Institute (2009) Figure II. World biodiesel production, 1996–2007.

Bioethanol The history of bioethanol, which is today the world‘s leading engine biofuel, begins with the history of internal combustion engines. N. A. Otto used bioethanol in studies with engines and Henry Ford took the combustion of alcohols into account. Scientific studies were intensified, especially during the Second World War, and research and application studies increased after the oil crisis of 1974. Bioethanol can be produced from sugar- and starch-based feedstocks such as sugar cane, sugar beet, molasses, corn, wheat, rice, potato, rye, and barley by fermentation, and from any cellulosic biomass by acidic hydrolysis. Today 95 percent of world bioethanol production is achieved by fermentation. However, since starchy and sugary materials are used in the human food chain and are thus expensive, a lot of research is being carried out into the production of ethanol from cellulose. Although cellulosic bioethanol production seems to be feasible, costeffective processes have not yet been attained. Bioethanol can be used as: alternative engine fuel; an additive for fuels; fuel-cell fuel; and raw material for biodiesel and bio-ether production (Karaosmanoglu, 2006; Wyman, 1996). Blending bioethanol with gasoline and diesel fuel decreases the cost and emissions of the fuel and increases its octane rating. Using bioethanol blends is a safer and environmentally friendly option for increasing the octane rating,. Any amount of bioethanol can be blended with gasoline and diesel fuel, but the most common ways of using bioethanol are:

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E-Gasoline: Gasoline that contains a maximum of 5 percent alcohol; Gasohol: 10 percent alcohol + 90 percent gasoline; E85: 85 percent alcohol + 15 percent gasoline; E-Diesel: Diesel fuel that contains a maximum of 15 percent alcohol (Oxydiesel, Diesohol). Gasohol is the primary alternative for gasoline because of its high performance and clean burning characteristics, and E-Diesel is the alternative for diesel fuel. Bioethanol production quantities for the years 1996–2007 are shown in Figure III. In 2007 world production of bioethanol reached 49.5 billion liters. Brazil and the USA are the leading countries in bioethanol production. China and India also attract attention in this field. China has the third place in global ethanol production and it is conducting research, especially on cellulosic bioethanol production. In the EU production of bioethanol was 1.77 billion liters in 2007. The reason for favoring biodiesel over bioethanol, with a share about 80 percent, is the rapid increase in diesel cars in Europe, especially in Germany and France (Earth Policy Institute, 2009).

Heating, Cooking and Electricity Production from Biomass Heating, cooking and electricity production is possible by using biomass energy in two ways: traditional use and modern biomass energy use. Energy can be obtained from: biogas production; gasification of biomass; and direct combustion of biomass.

60

Billion Liters

50

40

30

20

10

0 1996

1998

2000

2002

Year

Source: Earth Policy Institute (2009) Figure III. World bioethanol production, 1996–2007.

2004

2006

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Today, worldwide, 25 million households cook with biogas instead of kerosene and other cooking fuels. Twenty million of these households are in China, 3.9 million are in India, and 150,000 are in Nepal. In developing countries the number of households using traditional biomass for cooking and also heating is over 500 million. Firewood, charcoal, dung, and agricultural residues are used by 2.5 billion people and by 2030 it is expected that 2.7 billion people will use biomass for cooking. China, India, and especially Kenya use improved cooking stoves widely, and 220 million improved stoves are used worldwide. The number of improved stoves is comparable with the number of stoves using traditional biomass as the cooking fuel, which is 570 million. One of the most important points to consider in relation to using traditional biomass is human health, under both indoor and outdoor conditions, and the use of improved stoves will result in considerable gains (İsler and Karaosmanoglu, 2008; REN21, 2007). Urban and industrial wastes have a big potential for heat, cold and electricity production from biomass; hence, waste management becomes crucial. The biodegradable part of waste, which is the remaining renewable part when metals, plastics, electronics, and glass are excluded, is an important feedstock for biofuel technology. In 2004 1.2 million tonnes of waste was collected in the world. Renewable waste can be used for energy production by: combustion; gasification; pyrolysis; fermentation; plasma technologies; biogas production; and landfill gas production. Biogas produced in anaerobic digesters consists of methane (50–80 percent), CO2 (20–50 percent), and trace levels of other gases such as H2, CO, N2, O2, and H2S. The relative percentages of these gases in biogas depends on the feed material and the management of the process. Biogas can be utilized as an alternative fuel to natural gas, for direct heating, cogeneration, and electricity production. Biogas plants can be built with different capacities, for example: family type: 6–12 m3; farm type: 50–100 m3; village type: 100–200 m3; large type: 1,000–10,000 m3. Biogas can be produced from: livestock wastes, agricultural wastes, forestry wastes, leather and textile industry wastes, paper industry wastes, food industry wastes, fruit, vegetables, cereal and oil industry wastes, garden wastes, food wastes, animal dung, sugar industry wastes, and material produced by waste water treatment plants. Biogas technology is an integrated plant application that produces energy (electricity, heat or cold) and organic fertilizer (Deublein and Steinhauser, 2008).

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Methanization technology is still gaining importance in the world with biogas and landfill gas production from wastes. Germany, the UK, Italy, Spain, France, the Netherlands, Austria, and Denmark are the leading countries in the EU for biogas production. In 2006 EU-27 production was 62 TWh (terawatt hours); half of the production was landfill gas. As of the end of 2007 Germany has 3,700 biogas plants with a capacity of 1,270 MW (REN21, 2007). Bioheat and bioelectricity production from biomass, which are shown in Figure IV, can be obtained by using various methods (European Biomass Association, 2007). Forests have an important place within these production technologies, so energy forestry and wood wastes have a significant place within the range of energy resources. If the plans are taken into account and illegal cutting can be prevented, fuel production is possible without harming forests.

Stoves

Wood logs

FOREST

Bioheat

Technologies

Biomass for Heat

Wood pellets/chips

Space heating for houses

Automatic boilers District heating

Wood by products Cogeneration plant

Heat for ındustrial processes

Wastes

Bioelectricity AGRICULTURE

Crops and byproducts like straw Cogeneration engine Wet biomass/wastes

Methanization plant

Heat

Source: European Biomass Association (2007) Figure IV: Bioheat and bioelectricity production, 2007

Bioheat and bioelectricity have increasing shares in production statistics. Biomass, combustible fuels and wastes had a share of about 10 percent in the world energy supply in 2005, and these resources were used with other renewables for bioelectricity with a share about 2.2 percent, as seen in Table I (IEA, 2007). Renewable energy resources supplied 18 percent of the total energy consumption in 2006 and 18.4 percent of the electricity production (15 percent: large hydro-energy production; 3.4 percent: other renewable electricity production). An estimated 45 GW power capacity was obtained with biomass in 2006 while 235 GWh bioheat was used (REN21, 2007).

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Table I. World energy supply, 2005.

Primary energy resources

Primary energy supply, percent

Oil Coal Natural Gas Nuclear Renewables: Water: hydraulic energy Biomass: combustible fuels and wastes Others: wind, sun, geothermal, etc.

35.0 25.3 20.7 6.3 12.7 2.2 10.0 0.5

Electricity production, percent 6.6 40.3 19.7 15.2 18.2 16.0 2.2

Source: IEA (2007).

Table II shows bioelectricity and different renewable energy technologies. The share of bioelectricity in developed countries indicates the important role of bioelectricity in EU countries, especially in Germany. It is expected that bioelectricity production will increase in the coming years and, similarly, biomass use in cogeneration for electricity production and heating will also increase (REN21, 2007). Table II. Renewable electricity production (GW), 2006. Renewable electricity technology Wind electricity Small hydroelectricity Solar electricity Geothermal electricity Tidal electricity Bioelectricity Total capacity for renewable electricity Large hydroelectricity Total capacity for electricity

Source: REN21 (2007)

Developing countries 10.1 51.0 circa 0 4.7 0.0 22.0

EU25 48.5 12.0 3.2 0.8 0.3 10.0

Germany 20.6 1.7 2.8 0.0 0.0 2.3

China 2.6 47.0 circa 0 0.0 0.0 2.0

USA 11.6 3.0 0.7 2.8 0.0 7.6

World 74.0 73.0 5.5 9.5 0.3 45.0

88 355

75 115

27 7

52.0 100

26.0 95

207 770

1,650

720

130

620

1,100

4,300

BIOFUELS AND THE ENVIRONMENT Throughout history energy has been crucial for human life. After the discovery of fire people began to use wood for cooking and light, so the first fuel of human life appeared with the use of wood, and wood ash was the first waste product from energy use. Burning gases

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began to pollute the atmosphere and ash began to dirty the soil and water. Today wood is still used, and solid, liquid and gas biofuels all interact with the environment. The relationship between biofuels and the environment must be considered from feedstock to the final use, so all the calculations for environmental effect must be made for the whole loop. The loop is as follows: (i) feedstock production; (ii) feedstock transportation, handling and storage; (iii) biofuel production; (iv) biofuel transportation, handling and storage; (v) burning of biofuel (flue gas or exhaust gas). Emissions for each stage are calculated and Life Cycle Assessment (LCA) will be made for biofuels. LCA is a tool that can be used to assess the environmental impacts of products or services during their lifetime, from design to disposal. Materials and energy flows as well as environmental releases are allocated according to its procedures. Selection of seedbed, pesticides, dung and methods must be made with respect to minimum emissions in energy agriculture. Water use is another subject that must be taken into account. The wet regions and underground water supplies should not be exhausted by biofuel production. This is why sustainable agriculture should be practiced, with correct management of water resources. From the biodiversity point of view, energy agriculture, the production of energy plants, and energy forestry must be done with a balance of sustainable protection and use. As a result of this, biofuel production will be possible without negative environmental effects (Heijungs and Sangwon, 2002). LCA is made for biodiesel and bioethanol according to the feedstock and production method, either from well to tank or from well to wheel, and the results are compared with those for diesel and gasoline. Some of the studies show better results for the engine biofuels when compared with fossil engine fuels, and in some studies biofuels appear to be more polluting. It is possible with different calculation methods to produce different results. Exhaust and flue gas calculations show that cleaner production of biomass resources and biofuels has special importance (Curran, 1996). Biofuels have an important advantage in respect of CO2 emissions. Biomass gives out CO2 after burning, but this is used during photosynthesis. Therefore, it has been accepted that biofuel has zero overall CO2 emissions. This property gives biofuels benefits in the frame of Kyoto. Biomass does not contain sulfur generally, or the amount of sulfur is very low. All these advantages can be made stronger with cleaner biofuel use from feedstock to disposal. Moreover, carbon-negative cycles could be obtained with biofuels. According to the system choice, greenhouse gases can be reduced by producing bioelectricity–bioheat instead of using fossil fuels. The choice of system for burning and gasification is very important. The right choice of stove and appliance will also reduce the greenhouse gases produced in domestic use.

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Life-Cycle Assessment for Biodiesel and Bioethanol Greenhouse gases (GHG) and net energy balance (NEB) may vary for biodiesel and bioethanol, especially with respect to the feedstocks. Table III shows NEB values and Figure V shows the environmental effects of corn grain ethanol and soybean biodiesel, according to the studies of Hill, Nelson, Tilman, Polasky and Tiffany (2006). Table III. Net energy balance (NEB) for corn bioethanol and soybean biodiesel production.

Inputs Energy input (MJ) per energy in biofuel (MJ) Processing Facility energy use Facility laborer energy use Facility construction Transportation

Process (biofuel and co-products) Corn grain Soybean ethanol biodiesel

Product (biofuels alone) Corn grain Soybean ethanol biodiesel

0.60 – – 0.05

0.25 0.01 – 0.01

0.50 – – 0.01

0.14 0.01 – –

Farm Household energy use Machinery production Fertilizers and pesticides Fossil fuel use Hybrid or varietal seed

0.06 – 0.12 0.11 –

0.21 0.01 0.09 0.19 0.01

0.01 – 0.10 0.09 –

0.01 – 0.001 0.01 –

Outputs Energy output (MJ) energy in biofuel (MJ) Corn grain ethanol DDGS Soybean biodiesel Soybean meal Glycerol

1.00 0.20 – – –

– – 1.00 0.56 0.11

1.00 – – – –

– – 1.00 – –

0.24 1.25

0.81 1.93

0.20 1.25

0.73 3.67

NEB NEB ratio

Source: Hill et al. (2006)

per

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Hill et al. (2006) Figure V. Environmental effects of the production of corn bioethanol and soybean biodiesel.

In order to compare the energy inputs and outputs, the energy obtained after burning biofuel is chosen as the reference value, but energy equivalent values related to soybean meal, which comes from soybean biodiesel production, and direct burning of glycerol are used instead of those for dried distiller‘s grain with solubles (DDGS), which comes from bioethanol production. Analysis refutes the claim that the required energy for biofuel production is more than the energy content of the biofuels. But the NEB value is only about 25 percent for corn grain ethanol. That is why the energy used for harvesting corn and for the production of bioethanol is high. On the other hand the NEB value for soybean biodiesel is about 93 percent, because the byproducts of soybean biodiesel production have higher energy values. Energy inputs and outputs are defined in Table III according to the unit energy content of biofuel. The NEB (Energy output – Energy input) value and the NEB ratio (Energy output / Energy input) for the total production process of the biofuels are given for corn grain ethanol and soybean biodiesel. There are some negative environmental effects of corn grain ethanol and soybean biodiesel, as seen in Figure V. Production of corn grain ethanol uses more dung and pesticides than that of soybean biodiesel. Table IV shows the results of another study (Hill et al., 2006), of greenhouse gas savings for biofuels used in lieu of fossil fuels. According to the table, 12.4 percent greenhouse gases are saved by using corn bioethanol and 40.5 percent greenhouse gases are saved by using biodiesel.

Biofuel versus Food A common objection to biofuel production, which became a current issue especially in 2008, is that it could divert agricultural production away from food. The basic argument is that energy crop production competes with food crops in a number of ways, for resources such as agricultural and rural investment, infrastructure, water, and fertilizers, which leads to food shortages and price increases. However, blaming biofuels for lasting agricultural problems is not realistic. The subject is far more complex than has generally been presented.

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The issue should be analyzed against the real situation of food supply and demand, the use of food as animal feed, the agricultural production potential, the advantages and disadvantages of biofuel production, and so on. Table IV. Net greenhouse gas (GHG) savings per energy equivalent liter of biofuels used in lieu of fossil fuels (CO2 equivalent g/MJ). Emissions Total life-cycle GHG emissions from the fossil fuel that is displaced

Corn grain ethanol 96.90

Soybean biodiesel

Fossil fuel GHG emissions avoided by using biofuel instead of fossil fuel

19.66

39.76

Farm N2O production

emissions

in

biofuel

5.60

4.72

Farm CH4 production

mitigation

in

biofuel

0.43

0.36

Farm CO2 liming emissions in biofuel production

2.48

2.09

Net GHG emissions saved by producing and using biofuel

12.02

33.32

12.4

40.5

Net fraction of GHG emissions saved by producing and using biofuel, percent Source: Hill et al. (2006)

82.32

Price increases in oilseeds and crops can result from speculation, dumping, and a combination of policies. Agricultural products are available, but there are some buying problems because of price increases in poor countries. The effects of globalization and increasing economic integration have led to the rich getting richer and the poor getting poorer in nearly every way. Poor countries must be protected and encouraged, and no new poor countries should be created. It is important to mention that developing countries are facing both food and fuel problems. Adoption of agricultural practices should take into account this reality and evolve efficient methods of utilizing available land and other resources to meet both food and fuel needs. It is correct that biofuel producers will have a demand for agricultural products, but this demand can be organized within the energy plans, and the share of the supply for biofuel production is relatively minor compared with the share for food. According to the Food and Agriculture Organization of the United Nations (FAO), only less than one percent of the total agricultural area in the world is used for energy agriculture today, and it is expected that this share will be less than two percent in 2030. This shows that biofuels will not be a problem; furthermore, they will lead to an increase in certain food crops. The warranty studies in the automotive sector and related standards also show that biodiesel and bioethanol are expected to be blending components in the near future, and

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maximum five percent biofuel-blended fossil fuels will be supplied in the markets, even in Europe, which is one of the most important engine biofuel consumers. In other words, there will not be a big market demand for the first-generation biofuels. Biofuels will be introduced to our lives step by step, and they still continue their development. The world of biofuel is working hard to supply feedstock in order to meet the increasing production, and is trying to prepare by means of research and development for second-, third-, and fourth-generation biofuels after 2012. Situations created according to the political issues, critical location of water, dung prices, dryness and climate change are some of the most important issues that affect global change and market development, and, in consequence, the agricultural sector. Oil prices also have effects on the agriculture and food sector. Therefore, the balance between rich and poor countries must be made correctly. Local production and small plants must be organized, and the negative effects of the multinational plants should be minimized. Food wastefulness should be minimized, especially in developed countries. Energy agriculture could be organized within the related policy and plans. Growing crops for biofuels can encourage food-crop production rather than reducing it. A success in an agricultural product can drive the improvement of a country, as seen in the example of Brazil, which produces sugar cane, and Malaysia, producing palm and rubber. But this must be done with the right aims and planning, otherwise some problems will appear.

Biofuel Policies in the EU The EU develops its energy policy with strategic plans and regulations by issuing Green Papers, White Papers, and directives. The energy policy of the EU is defined as ―Energy for developing world: Sustainable, energy secured and competitive,‖ so development of renewable energy is one of the priorities for the energy policy. The ―Action Plan for Energy Efficiency: Savings Potential and Impacts,‖ COM(2006)545, was issued on October 19, 2006, and aims at a target of 20 percent savings by 2020 (European Commission, 2009). EU renewable energy policy was defined by ―The Support of Electricity from Renewable Energy Sources,‖ COM(2005)627, on December 7, 2005, and the ―Biomass Action Plan,‖ COM(2005)628, was issued in the same year. The ―Biomass Action Plan, Impact Assessment,‖ SEC(2005)1573, was produced on December 7, 2005, the ―Biofuels Progress Report,‖ COM(2006)845, was issued on January 10, 2007, the ―EU Strategy for Biofuels,‖ COM(2006)34, was issued on February 8, 2006, and, lastly, the final report was presented in April 2006 (European Commission, 2009). The EU‘s ―Renewable Energy Road Map,‖ COM(2006)848, was presented on January 10, 2007, and according to this road map the EU‘s vision for future energy policies will include: efficient conversion and use of energy; diversification of energy; decarbonization; full liberalization and interconnection of energy systems.

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The ―European Strategic Energy Technology Plan (SET-Plan),‖ COM(2007)723, was issued on November 22, 2007, and a directive on promoting the use of energy from renewable sources was issued on January 23, 2008, with the aim of establishing a target of a 20 percent share of renewable energy sources in energy consumption and 10 percent for biofuels in transport, to be achieved by each Member State. The EU ―Energy Security and Solidarity Action Plan,‖ COM(2008)781, which is the core of the Second Strategic Energy Review, was issued on November 13, 2008, to ensure the adoption and rapid implementation of the ―20– 20–20‖ target: reducing greenhouse gas emissions by 20 percent, increasing the share of renewables in energy consumption to 20 percent, and improving energy efficiency by 20 percent by the year 2020 (European Commission, 2009) . According to European Union directive 2003/30/EC, the target concerning the use of biofuels in transportation was two percent for 2005 and 5.75 percent for 2010. At the end of 2005 the actual share of biofuels was 1.4 percent and in January 2008 the European Commission presented a review of the 2003 biofuels directive, which confirms the 10 percent target for 2020 and proposes sustainability (European Commission, 2009). Europe uses today less than two percent of its agricultural land for biofuel production and in order to reach the 5.75 percent goal, 15 to 17 percent of the total arable land in Europe would be used, so it is expected that half of the biofuel will be produced from domestic crops and the other half will be imported. In some countries decreasing imports are targeted, with the aim of increasing domestic production and land capacity. Governments use financial incentives such as tax credits or concessions and import quotas and tariffs in order to increase the use of biofuels. Different countries have different detaxation systems, which affect the development of biofuels.

Biofuels in Turkey Legal Situation In Turkey, regulations for energy, renewable energy, and biofuels are made in the context of the accession negotiations with the European Union, and, currently, revision and secondary legislation studies are being carried out in Turkey. As regards legislation, bioelectricity is defined in Act 5346 and engine biofuels in Act 5015 of the Petroleum Sector Act. The legal situation of biodiesel in Turkey can be summarized as follows. Biodiesel has been defined as the third engine fuel of the liquid fuel sector after gasoline and diesel, and it is subject to all same legal definitions, regulations, and supervision as gasoline and diesel. Biodiesel that is used for heating is subject to the same legal regulations as fuel oil and furnace fuel, and it must be marked in red. Biodiesel producers must take a processing license from the Energy Market Regulatory Authority (EMRA). Biodiesel production in recycling plants from waste vegetable oils is possible according to the ―Regulation about supervision of waste vegetable oils,‖ of April 19, 2005. Collection of waste vegetable oils, transportation, the issue of licenses for recycling processes, and supervision procedures are carried out by the Ministry of Environment and Forestry. Auto-biodiesel must be produced in accordance with the standard TS EN 14214, and biodiesel for heating fuel must be in accordance with the standard TS EN 14213. Auto-biodiesel can be blended at a maximum of five percent with diesel fuel according to the standard TS 3082 (EN 590); diesel fuel blended with biodiesel can be used in all engines within all guarantees.

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Bioethanol has been defined in Act 5015 as a petroleum product blend component. It can be blended with gasoline according to the standard EN 228. In the current situation only bioethanol and auto-biodiesel obtained from domestic resources, which are blended up to two percent, have zero special consumption tax. EMRA is the appropriate authority for biodiesel and bioethanol and the ―Tobacco and Alcohol Market Regulatory Authority‖ regulates the bioethanol sector.

Biodiesel in Turkey Biodiesel has become popular in Turkey since 2000. As of November 2008 there are 58 plants that have a biodiesel processing license; eight of them have a biodiesel processing license for recycling waste vegetable oils, but a limited number of these plants are continuing production. A pioneering example of a biodiesel plant is DB Agro Energy with a capacity of 20,000 tonnes/year, which uses safflower and canola energy agriculture and is also the first B2 (two percent biodiesel mixed with 98 percent petroleum) supplier in the liquid fuel sector. Although Turkey has appropriate land for oilseed plant production, production does not meet consumption. In 2004–05, only 30 percent of vegetable oil consumption was achieved by domestic oil production. Table V shows oilseed production and yields in Turkey for 2002– 06. Cotton seed and sunflower are the leading domestic oilseeds. Peanut and soybean production were close to each other in 2000, but in the following years soybean production decreased. The amount of rapeseed and safflower production was small, but in 2006 there was an increase in safflower and rapeseed production. Turkey, as an importer of vegetable oils for food, needs to emphasize the following points in order to supply feedstock for biodiesel production. The allocation of areas not actively used in agriculture, to cropping, oilseed production, and, especially, safflower energy agriculture, needs to be promoted. Safflower is one of the most suitable feedstocks for biodiesel production in Turkey. Jatropha is another important oil resource for dry agriculture. Although production seems to be difficult with respect to the climatic conditions in Turkey, experimental production will be useful and adequate variety in types of crop can be obtained with pilot-scale studies. Canola can be cultivated in regions appropriate for its production. Planting of oilseeds can be done with rotation. For example, sugar cane can be planted in rotation with canola and safflower. Cottonseed oil and waste vegetable oils can be used as important biodiesel feedstocks. More importance can be given to biodiesel production from waste vegetable oils. There is a big feedstock potential of around 300–400 thousand tonnes per year, and some special supports and exemptions can be introduced in order to benefit from this potential. Research and development studies must be started for biodiesel production from algae.

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In order to increase the use of B2, legal regulations concerning the forced use of two percent biodiesel, supported by a special consumption tax, must be prepared immediately. The special consumption tax support and the blending ratio may be increased as the biodiesel supply increases. These policies will support energy agriculture and the recycling of waste vegetable oils, and this will lead to benefits to the national economy. Following increases in production, import rates of diesel fuel will decrease and, in addition to financial ones, social and environmental advantages will also be obtained.

Bioethanol in Turkey In 1931, for the first time in Turkey, bioethanol was discussed at a National Agriculture Conference with the aim of reducing the dependence on imported petroleum. In the Second Five-Year Development Plan, which was prepared by Mustafa Kemal Ataturk, the founder of the Turkish Republic, the importance of producing non-petroleum-based engine fuels using domestic sources was underlined. In 1942 20 percent bioethanol was blended with the gasoline and was used in the army, and goals for using alternative fuels were formed in the State Development Plan, but these could not be achieved. After the oil crisis of 1974, in parallel with studies over the world, Turkish Sugar Factories initiated experiments in bioethanol production with the aim of using this as fuel. It was expected that several ethanol plants would be constructed; but interest in this subject remained limited to scientific research studies. The bioethanol plants established in Turkey are Tarkim, with a capacity of 40 million liters/year, which is the first E2 (two percent ethanol and 98 percent petroleum) supplier in the liquid fuel sector, Cumra with a capacity of 84 million liters/year, Tezkim with a capacity of 26 million liters/year, and Eskisehir Sugar Plant with a capacity of 20 million liters/year. According to the official data of Tobacco and Alcohol Market Regulatory Authority, total bioethanol production capacity in Turkey is 170 million liters/year. Turkey has a wide potential for bioethanol production. Sugar beet, wheat, and maize are the leading feedstocks. In particular, sugar beet cultivation is one of the important sectors that provide employment to farmers with high income opportunities. Table VI shows sugar beet production and yields over the years for the country (The Union of Sugar Beet Growers Cooperatives (USBGC), 2008). Sugar beet is cultivated on about 32 million decares of land in Turkey. Only 20 to 25 percent of this area can be used with rotation planting. According to the new sugar system quotas, sugar beet may only be grown on about 3.5 million decares. As a result of this, the remaining land, an area of about 4.5 million decares, can be used for energy agriculture in order to produce bioethanol. In 2006 bioethanol production was 1.4 million tonnes. Consequently, Turkey has a production potential of 2–2.5 million tonnes of bioethanol from sugar beet. Finally, there is 78.5 million liters of bioethanol production potential per year if rehabilitation studies are carried out in the existing ethanol production facilities. Maize (corn) is the other feedstock used for bioethanol production in Turkey. Table VII shows cereal production quantities for the country. The effect of the use of cereals for nonfood purposes is not distinctive in the market yet, but the effects of increasing cerealoriginated bioethanol and global cereal price changes are expected to be seen soon.

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Table V. Oilseed production in Turkey, 2002–06.

Production, thousand tonnes Oilseed

2002

Yield, kg/decare

2003

2004

2005

2006

2002

2003

2004

2005

2006

Cottonseed 1457.1

1337.1

1425.6

1291.2

1476.6

137

144

146

158

165

Sunflower

850

800

900

975

1118

155

147

164

172

191

Peanut

90

85

80

85

77.5

273

304

308

329

341

Soy

75

85

50

29

47.3

294

315

357

337

397

Sesame

22

22

23

26

27

46

50

53

61

66

Rapeseed

1.5

6.5

4.5

1.2

12.6

273

232

265

171

234

Safflower

0.03

0.17

0.15

0.22

0.40

Others

19.2

52.1

18.2

13.7

29.8

63 –

68 –

91 –

124 –

92 –

–

–

–

–

–

Total

2514.8

2387.9

2501.4

2421.3

2789.2

Source: TurkStat (2008)

Table VI. Sugar beet production in Turkey. Year 2002 2003 2004 2005 2006

Source: USBGC(2008)

Planting, ha 372,468 314,000 315,344 335 972 323,704

Production, thousand tonnes 16,396 12,576 13,517 15,181 14,754

Yield, kg/ha 44,361 41,688 42,865 45,213 45,578

Table VII. Cereal production quantities (thousand tonnes) for Turkey, 2002–07.

Cereal Wheat Barley Rye Oats Corn Rice

2002 19,500 8,300 255 290 2,100 216

Source: TurkStat (2008)

2003 19,000 8,100 240 270 2,800 223

2004 21,000 9,000 270 275 3,000 294

2005 21,500 9,500 270 270 4,200 360

2006 20,010 9,551 271 208 3,811 417

2007 17,234 7,307 241 189 3,535 648

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337

As explained above, there is promising potential for bioethanol production in Turkey. For the bioethanol sector, specific policies include the following. The feedstock advantage of sugar beet can be supported while considering the quota structure. Maize and wheat agriculture for energy can be supported. Turkey can become one of the exporters of bioethanol and this can be planned with a road map of related sectors. Research and development studies and pilot applications can be started for cellulosic bioethanol production with the help of related ministry supports, in parallel with the world trend towards cellulosic ethanol production. Today only one producer supplies bioethanol as a two-percent blend with unleaded gasoline (E2) to the market. It is expected that similar products will be offered in the liquid fuel sector soon. Turkey has the production potential for using E5 (five percent ethanol and 98 percent petroleum) with special consumption tax incentives. As a result of this, the twopercent bioethanol blend must be brought within the legal regulations with special consumption tax incentives, and, after this, the legal regulations must be organized for E5 immediately (Karaosmanoglu, 2006). Positive impacts of using E5 would include an increase in energy agriculture and a decrease in the import rate, as well as creating new job areas. There would be both economic and environmental advantages.

Bioheat and Bioelectricity Production in Turkey In Turkey renewable biofuels have an 11.5 percent share of primary energy supply. Renewable energy production in Turkey is shown in Table VIII (World Energy Council Turkish National Committee (WECTNC), 2008). As seen in the table, wood, animal waste, and plant residue production in 2007 amounted to 17,782,000 tonnes, most of which was used in burning biomass by traditional methods in the rural areas, and biofuels amounted to 12,000 tonnes. In the last two years, investments made for biogas and landfill gas production have increased. As of January 2009, the licenses given by EMRA are as follows: Biogas license Autoproducers / 5 unit, established power: 7.25 MWe (Megawatt electrical) Production license / 3 unit, established power: 9.54 MWe Landfill gas license Autoproducers / 1 unit, established power: 4.02 MWe Production license / 5 unit, established power: 35.09 MWe Existing investments and new legal regulations indicate an increase in the production of biogas and landfill gas; thus bioelectricity production, the bioelectricity carbon trade, and organic fertilizer supply will provide advantages to the producers.

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CONCLUSION Increases in energy prices, the finite nature of fossil sources, and the need to develop other forms of energy point to biofuels as one of the major alternatives. The advantages of using biofuels are: positive effects on climate change; more stable energy supply and demand; increase in rural development; support for waste management; possibility of energy production on site; increase in use of domestic resources; diversification of energy; and environmental benefits as a clean form of energy. The amount of CO2 released when a biofuel is burned is generally equivalent to the amount captured during the growth of the crop that produced it. Lowering CO2 emissions is accomplished by the proper choice of feedstock, production process, and farming practices. Biofuels with a clean life cycle from feedstock to consumption must be used, and biofuel production must involve minimum harm to soil, water, and atmosphere. Turkey has a wide potential for energy agriculture, with its appropriate climate and agricultural power. In Turkey only one third of the total arable area is used, and only three percent of the unused area is suitable for agriculture. Using these remaining areas for energy agriculture is importance as a means of utilizing the national resources, providing energy source variety, and creating new employment areas, so energy agriculture must be supported with appropriate incentives (Karaosmanoglu, 2006). Energy agriculture can be carried out without affecting the areas necessary for food and feed production, and biofuel production will also have positive impacts on sustainable development, especially in rural areas. As a side effect, feed as a byproduct of biofuels can also be purchased more cheaply. Eventually, demand for agricultural products will increase, new planting areas will be used, the value of land will increase, and new job areas will be created with the energy agriculture. This is why biofuel production has positive impacts on the development of rural areas. Biofuels are also important for the green carbon trade and the green economy. Energy agriculture, energy forestry and waste management are important for utilizing feedstocks. In Turkey the 2008–12 Agricultural Vision was issued on March 20, 2008 by the Ministry of Agriculture and Rural Affairs, in order to focus on domestic agriculture. The emphasis given to energy agriculture in the Agricultural Vision fulfills expectations and it was decided that the Black Sea Agricultural Research Institute will specialize in energy agriculture. The Ninth Development Plan, which was issued in July 2006, aims at increasing the share of domestic and renewable energy resources in production systems. In sum, implementation of following policies is crucial for Turkey. Increasing investments and public knowledge are reassuring. One of the critical aspects of biofuel production is success in the planning and application of energy agriculture within agriculture policy. The existing agricultural outlook indicates an increasing success for bioethanol production and a slow increase in oilseed production. Accomplishing the legal regulations for blending two-percent engine biofuels with liquid fuels using a special consumption tax incentive will be very useful, and it must be organized immediately. This obligation will support agriculture and also contribute to economic activities. After that, the blending ratio can be increased gradually to five percent.

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Contractual cultivation of canola and safflower should be developed within energy agriculture. Supplying the biodiesel sector will have a positive effect on canola and safflower cultivation. Utilizing Turkey‘s existing waste potential, collection of waste vegetable oils, and biodiesel production are important issues. These have environmental advantages and they will also lead to increases in national income. Using wastes such as straw-coat-sawdust-shiver in the form of pellets and briquettes in preference to wood and dung in rural houses will be an improvement. The choice of appropriate stoves is another issue that must be taken into account. The rising interest in bioelectricity production indicates that investments in this will increase. Success in this area will increase with the interest of local managements in landfill gas production. A large technical potential is waiting for biogas production in order to make investments. An increase in the number of new waste management plants is expected. Cogeneration applications in bioenergy production from wastes are important, especially for local management and housing authorities. The Housing Development Administration of Turkey must take this issue into its plans immediately. Cogeneration systems using biomass are also important for organized industrial zones and electricity–heat–cold trigeneration applications are important for central systems. Finally, biofuels will take their place as a green alternative in the energy road map for Turkey. This must be done without harming the environment, while at the same time protecting the fuel–food balance so that the advantages become an asset to the nation.

ACKNOWLEDGMENTS The authors would like to thank all the Turkish scientists, business people, and related government authorities who are dealing with biofuels.

REFERENCES Curran, M. A. (1996). Environmental Life-Cycle Assessment. McGraw-Hill. Deublein, D., & Steinhauser, A. (2008). Biogas From Waste and Renewable Resources: An Introduction. Weinheim, Germany: Wiley-VCH. Earth Policy Institute (2009). http://www.earth-policy.org European Biomass Association (2007). Biomass for Heat Action Plan. Brussels: European Biomass Association. European Commission (2009). Energy website. http://ec.europa.eu/energy/ index_en.htm Heijungs, R., & Sangwon, S. (2002). The Computational Structure of Life Cycle Assessment. Eco-Efficiency in Industry and Science, 11.

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Hill, J., Nelson, E., Tilman, D., Polasky, S., & Tiffany, D. (2006). Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels. Proceedings of the National Academy of Sciences of the USA. http://www.pnas.org. International Energy Agency (IEA) (2007). Renewables in global energy supply. Paris: International Energy Agency. International Energy Agency (IEA) (2008). 2008 Report: Key World Energy Statistics. Paris: International Energy Agency. Isler, A., & Karaosmanoglu, F. (2008). Traditional Cooking Fuels, Ovens and Stoves in Turkey. Clean Cooking Fuels Workshop, 31st IAEE International Conference, Istanbul, Turkey, 16–17 June 2008. Karaosmanoglu, F. (2006). Biofuel technology and ITU researches. Proceedings of the ―Energy, Community, University, Industry (ENKUS) 2006-ITU Energy Workshop and Exhibition, Istanbul, June 22-23, ITU Press pp. 110-125. Knothe, G., Gerpen, J. V., & Krahl, J. (2004). The Biodiesel Handbook. Champaign, IL: AOCS Press. Mittelbach, M., & Remschmidt, C. (2004). Biodiesel: The Comprehensive Handbook. Vienna, Austria: Boersedruck GmbH. Ninth Development Plan 2007-2013 (2006). Official journal Nr. 26215. Renewable Energy Policy Network (REN21) (2007). Renewables Global Status Report. Paris: Renewable Energy Policy Network. The Union of Sugar Beet Growers Cooperatives (USBGC) (2008). http://www.pankobirlik.com.tr. TS EN 14213 (2005). Heating fuels-Fatty acid methyl esters (FAME) -Requirements and test methods. TS EN 14214 (2009). Automotive fuels-Fatty acid methyl esters (FAME) for diesel enginesRequirements and test methods. Turkish Statistical Institute (TurkStat) (2008). http://www.tuik.gov.tr World Energy Council Turkish National Committee (WECTNC) (2008). 2007–2008 Energy Report for Turkey. Ankara: World Energy Council Turkish National Committee. Wyman, C. E. (1996). Handbook on Bioethanol: Production and Utilization. Washington, DC: Taylor & Francis.

In: Rethinking Structural Reform in Turkish Agriculture ISBN: 978-1-60876-718-2 Editor: B. Karapinar, F. Adaman and G. Ozertan © 2010 Nova Science Publishers, Inc.

Chapter 18

A PRELIMINARY IMPACT ASSESSMENT OF DOHA ROUND RESULTS ON AGRICULTURAL POLICIES IN TURKEY Christian Haeberli World Trade Institute, University of Bern, Switzerland

ABSTRACT Turkey‘s membership in the World Trade Organization (WTO) constitutes the single most important international regulatory framework for its agricultural policy, today and in the near future. There is a balance between rights and obligations: market access rights are guaranteed by the WTO schedules of concessions, whereas the rules for agricultural support policies are mostly defined in the Agreement on Agriculture, with Turkey‘s own WTO schedule laying down the quantitative limits for government support measures and import tariffs. These opportunities and constraints are likely to remain unchanged for as long as the Doha Round negotiations on multilateral trade are pending. The presently foreseeable outcome will improve Turkey‘s export opportunities but it also entails considerable import tariff reductions and domestic policy space restrictions. In order to cope with these challenges considerable groundwork is required now, leading to the policy adjustments necessary to ensure that Turkey can continue to benefit from agricultural trade as a source of economic growth. If ―Doha‖ is to avoid exacerbating the already important dichotomy of Turkish agriculture, special adjustment measures will be necessary for the less competitive producers. The ongoing agricultural reform process in Turkey is of course a crucial element in assessing and reformulating Turkey‘s agricultural trade policy. This chapter aims at contributing to the debate from a global and interdisciplinary perspective.

INTRODUCTION This chapter presents and analyses the impact of the foreseeable Doha Round results on the rights and obligations deriving from Turkey‘s membership in the World Trade Organization (WTO). Such rights and obligations are considerable and apply to trade,

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investment, environment, technology and intellectual property rights aspects. They are shaped by the various WTO Agreements, the Schedules of concessions, and the subsequent Ministerial Decisions and dispute settlement rulings thereon. In comparison, the trade agreement with Turkey‘s main partner, i.e. the 1995 Customs Union agreement with the European Union (EU), is also aimed at promoting trade and economic relations. As shown in Table I around 52 percent of Turkey‘s exports go to the EU, which supplies almost 40 percent of its imports. At the same time, Turkey enjoys a large agricultural export surplus overall (Table II). However, Turkey has no agricultural policy obligations under the Customs Union agreement, except that it has had to accept the acquis communautaire in several essential internal market areas, notably with regard to industrial standards. As a matter of fact, the Customs Union agreement, besides services and public procurement, also excludes agriculture (except processed agricultural products). A list of mutual market access guarantees for agricultural commodities is contained in Decision 1/98 of the Association Council. There is no formal dispute settlement procedure. In cases of disagreement, the Association Council has the competence to take decisions over tariff concessions as well as on all other matters pertaining to the Customs Union agreement. Being composed of both contracting parties, this means that only consensus can ensure enforceability of rules and concessions. Of course, a number of policy adjustments are part and result of Turkey‘s EU accession process. However, the formal adoption of the Common Agricultural Policy (CAP) by Turkey will only take place when the country actually enters the European Union. Until then the WTO remains the key factor shaping Turkey‘s agricultural and trade policies. For the same reason, future market access and policy space will depend on the outcome of the Doha Round. The so-called ―modalities‖ issued in December 2008 make it clear that Turkey can expect much better access to its main export markets (WTO, 2008). Since industrial tariffs on most of Turkey‘s export markets are already low or even zero, its agricultural exports will benefit the most. This is not to say that Turkey will not benefit from other results of the Doha negotiations. This chapter focuses on the agricultural outcome of the Doha Round. At the same time it is obvious that market access for agricultural goods depends not only on tariffs, but also on the impact on competition of many of the other policies followed by Turkey‘s trading partners. To put it more bluntly, the question is whether export and domestic subsidies by Turkey‘s richer competitors will be sufficiently constrained to allow for more trade in competitive Turkish products. At the time of writing this chapter the Doha Round was in limbo. Repeated attempts to find ministerial consensus on the most important issues had failed, most recently in July and December 2008. A discussion of the reasons for this failure and of the chances for a successful conclusion is beyond the scope of this chapter, which attempts to forecast the impact of the foreseeable results on Turkey‘s agricultural production and trade prospects. The basic texts for this analysis are the above-mentioned modalities. These modalities are a very complex series of new rules and reduction formulas extending over 130 pages. Our presentation will therefore have to simplify matters and to focus on the most important results from a Turkish perspective. In doing so, both export interests of modern farming and Turkey‘s concern to protect its small-scale, traditional farmers will have to be considered.

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Table I. EU-27 Trade with Turkey (2007). EU Exports to Turkey SITC product groups TOTAL Agricultural productsa Energy Non-agricultural raw materials Office/telecom. equipment Power/non-electr. machinery Transport equipment Chemicals Textiles and clothing Iron and steel

Rev.3

Euro Share of total (millions) EU exports 52 641 4.25 1 620 2.23 1 392 2.23 441 2.33 1 229 5.32 7 053 3.79 7 930 4.79 8 699 4.60 1 739 5.16 3 213 9.26

Percent 100.0 3.1 2.6 0.8 2.3 13.4 15.1 16.5 3.3 6.1

EU Imports from Turkey SITC Rev.3 Euro Share of total Percent Balance Product Groups (millions) EU imports TOTAL 46 867 3.29 100.0 5 774 Agricultural productsa 3 187 3.40 6.8 −1 567 Energy 651 0.20 1.4 740 Non-agricultural raw materials 112 0.24 0.2 329 Office/telecom. Equipment 100 0.18 0.2 1 129 Power/non-electrical mach. 1 870 2.35 4.0 5 183 Transport equipment 9 818 11.05 20.9 −1 887 Chemicals 1 309 1.16 2.8 7 390 Textiles and clothing 12 098 15.31 25.8 −10 359 Iron and steel 2 646 6.49 5.6 567 Source: EUROSTAT, EU-27 Trade excluding Intra-EU Trade (Comext, Statistical regime 4) SITC, Standard International Trade Classification Revision 3. a Agricultural products comprise food & live animals incl. fish, beverages & tobacco, hides, skins & fur skins, oil seeds & oleaginous fruits, natural rubber..., cork & wood, silk, cotton, jute & other textile bast fibers..., vegetable textile fibers (other than cotton)..., wool, crude animal & vegetable materials, oils, fats.

Of course, there is no free lunch in WTO—even in a so-called ―Development Round‖. All WTO Members, apart from the least-developed countries, will have to reduce tariffs and some of their support instruments. A number of sensitive negotiating issues are at stake that will determine whether and how Turkey can make use of the envisaged flexibilities to pursue its goals of improving food security, livelihood security and rural development. Besides the new import conditions, there will be new restrictions on the type and amount of subsidies to which WTO Members will be entitled. For this analysis the following questions are particularly relevant: first, how much more market access can Turkey expect for its agricultural exports, considering that its competitors in other countries also benefit from such market access improvements. Secondly, what new disciplines will Turkey, like others, have to accept? In particular, how big will the tariff reductions have to be for products which are also produced in Turkey, and can it reserve the right to apply certain safeguards against imports? And finally, what type of (and how much) domestic support will still be allowed?

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Table II. Turkish agricultural trade by Harmonized System Chapters (1–24), 2007. HS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

HS categorya Live animals Meat Fish Dairy products, eggs, honey Other products of animal origin Live trees and other plants Vegetables Fruits Coffee, tea, spices Cereals Products of the milling industry Oil seeds and oleaginous fruits Vegetable saps and extracts Vegetable plaiting materials Animal or vegetable fats and oils Meat, fish and seafood food prep. Sugars and sugar confectionery Cocoa and cocoa preparations Prep. of cereals, flour, starch or milk Prep. of vegetables and fruits Miscellaneous edible preparations Beverages, spirits and vinegar Waste from the food industries Tobacco and manufactured tobacco substitutes Total

Exports (1000 US$) 7 078 46 518 273 078 168 442 34 629 46 447 861 385 2 670 618 94 671 66 603 504 658 129 699 5 454 18 320 401 667 37 307 297 454 364 300 532 908 1 313 865 437 292 174 557 11 156 643 799

Imports (1000 US$) 23 921 97 96 632 110 655 32 650 52 225 123 610 252 576 68 036 973 236 20 787 1 020 282 21 470 3 710 795 786 1 782 55 919 236 100 116 988 76 999 366 973 92 569 548 122 302 125

9 141 906

5 393 251

Source: UNcomtrade, 2008 a Harmonized Commodity Description and Coding System (HS).

This chapter focuses on agricultural tariffs and subsidies. It must be emphasized, however, that effective market access also depends very much on other equally important issues. For instance, sanitary and phytosanitary regulations which are the subject of Chapter 15 by Burkard repeatedly emerge as a source of trade problems. The same goes for other policy challenges such as agro-biotechnology regulations including those for biosafety (Chapter 14 by Kivilcim), public and private standards applying to fresh horticultural products (Chapter 19 by Jusoh) and issues regarding intellectual property and patentability (Chapter 13 by Karapinar and Temmerman). Unfortunately ―Doha‖ will not offer new solutions to these problems, simply because none of these issues is part of the negotiating mandate adopted back in 2001. This means that, absent separate solutions in regular WTO Committees or in a new round, important concerns in these areas can only find solutions by way of ad hoc negotiations—or through dispute settlement. This being so, the present legal framework applying to all of these topics also impacts on Turkey‘s agricultural export and import interests. Other subjects such as regionalism, climate change, environmental and social standards, investment and competition also have a bearing on agriculture in Turkey, but the present

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international legal framework is less stringent than the applicable WTO rules and disciplines. A comprehensive approach to policy development as well as to international negotiations will have to take all of these aspects into account.

The State of Play in the Doha Round The December 2008 modalities are a state-of-the-art picture based on almost 10 years of preliminary talks and negotiations, alternating between informal and formal modes. They have to be seen—and dealt with—in the context of the overall Doha Round results, both because of the interrelationship between, for instance, tariff reduction formulas for agricultural and non-agricultural products, and of the political nexus for the sake of acceptability and ―sale at home‖. Unfortunately, many important topics originally foreseen in the negotiation mandate adopted in Doha, in November 2001, were subsequently eliminated, such as the so-called ―Singapore issues‖ of investment, competition and government procurement. This obviously makes stakeholder support and parliamentary acceptance of the remaining results more difficult to obtain in many countries. The remainder of this chapter will focus on the agricultural part of the modalities. The best way to present this analysis is to follow the so-called three pillars of the 1995 Agreement on Agriculture (AoA) i.e. market access, domestic support and export competition.

Market Access Many of the reduction coefficients envisaged in 2008 will continue to be negotiated, some of them until the last famous last night. However, it is already clear that these proposals are extremely ambitious. In particular, a (developed country) tariff reduction of 70 percent seems to be acceptable for products in the highest band (i.e. with ad valorem tariffs above 75 percent). Such a high reduction figure has never even been envisaged in any previous GATT Round, for any sensitive sector. This is so even if we consider the world market price increases since the year 2000 when the last Uruguay Round tariff reductions in developed countries took place, and the fact that presently applied tariffs are often far below scheduled ones. This latter aspect is called the ―tariff binding overhang‖; the situation in Turkey will be discussed below. Such ambitious reduction formulas are politically acceptable only where a number of compensation instruments are available for the importers and for virtually each and every new discipline. Some such softeners are available to all WTO Members, but they in turn are subject to additional market access concessions. They are called ―sensitive products‖ or ―exceptions to capping‖. Moreover, some of the resulting new tariffs and spending limits may imply only a binding at ―overhang levels‖, i.e. at applied tariff levels, at base period import quantities, or at actual domestic consumption. This means that they may not by themselves A very illustrative example arose from the food crisis in the years 2007–08. The dramatic world market price increases led many countries to abolish import tariffs for cereals and other basic foods as well as feedstuffs. A reduction of bound duty rates would not create new export opportunities, but it would reduce the ―tariff binding overhang‖ and thus ensure that in a new cycle of world price reductions these duties could not be

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bring large new trade opportunities, but they represent new limits that will in turn preclude tariff increases if and when politicians call for new protectionist measures.+ In addition, the 2005 Hong Kong WTO Ministerial Meeting decided to offer to the developing countries extensive flexibilities and special and differentiated treatment provisions, including smaller tariff reductions and longer implementation periods for ―special products‖ and the ―special safeguard mechanism‖ (SSM) (WTO, 2005). Such instruments can protect fragile producers in Turkey, but they will also reduce the trade benefits for domestic consumers and processors. Moreover, since these instruments will also be available to other developing countries they will negatively impact on the South–South trade—including Turkey‘s export interests in these countries. Incidentally, least-developed countries (LDCs) are not expected to make new commitments in market access (nor in the other two pillars)§ but will obtain more favorable treatment such as duty-free and quota-free access (DFQF) for 97 percent of their products, with simplified preferential rules of origin. Expressed in more technical terms and in order at least to mention the most important negotiating issues, the December 2008 modalities include: reduction formulas for cutting tariffs now expressed in one reduction percentage number instead of the previous ranges (including for in-quota tariffs); proposals to abolish the present special agricultural safeguard (SSG) after seven years, to simplify complex tariff structures, and for further fine-tuning of flexibilities for many different groups of countries; special arrangements even for individual countries such as the United States, Japan, Canada, Norway, Mauritius, Bolivia, Iceland, Switzerland, and Suriname; three additional texts dealing with selecting sensitive products, creating new tariff quotas, and proposing solutions for the allegedly hottest issue, the SSM; methods for dealing with differences in actual import and consumption levels (for calculating new market access commitments for sensitive products and for not ―capping‖ non-sensitive products with tariff rates above 100 percent); more precise conditions for selecting special products; additional provisions to address issues such as tariff escalation (for processed commodities), tariff quota administration, ―tropical‖ and ―narcotics diversification‖ products, and long-standing preferences. None of these issues is unimportant but their impact in Turkey is not always very strong.

increased again over the new binding levels. For a detailed analysis, see (Häberli, forthcoming) and (Prowse, forthcoming). + As an example, export subsidies for dairy products which had virtually disappeared before 2008 were reintroduced in the first half of 2009 by the EC and the US. § The same goes for ―very recent‖ new WTO Members (Saudi Arabia, Macedonia, Vietnam, Tonga, and Ukraine) and ―small low-income recent new Members‖ (Albania, Armenia, Georgia, Kyrgyz Republic, Moldova, and Mongolia). AoA Art.5

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Domestic Support For agricultural price support subsidies the Uruguay Round limits represented little more than historic ceilings, based on 1986–1990 expenditures. But they at least led to a general limitation in trade distorting effects, with many countries, including Turkey, introducing direct payments and other Green Box policies instead of price support schemes in the amber box and production-limiting subsidies in the blue box. Nowadays, the Amber Box amounts enshrined in the WTO schedules in most countries are far above their actual expenditures. For some products, Turkey is in a similar position (Akder, 2008). This ―subsidy binding overhang‖, just as for market access means that, absent a Doha Round conclusion, new trade-distorting measures could be introduced or reinstated at any time. This also explains why apparently very ambitious reduction formulas are contemplated for the reduction and further disciplining of domestic subsidies. For example, the EU, Japan and the US as the biggest farm supporters in absolute terms would reduce their overall trade-distorting domestic support ceilings by between 70 and 80 percent. Even so, it appears that in many cases the actual expenditures of these countries (other than green box payments) are already below the proposed new limits! Another feature is the proposed introduction of new product-specific subsidy limits (at present, with the notable exception of ―de minimis‖ limits there are only global expenditure ceilings).+ Even though these new limitations would be set in most cases at 1995–2000 averages, i.e. at generally high support levels, this is a welcome albeit timid restriction on socalled ―product focusing‖—a diplomatic term for the habit of frequently shifting support according to world market price fluctuations, in other words price wars between finance ministers (Anderson and Martin, 2006).

Export Competition A successful conclusion of the Doha Round would fulfill the longest-standing demand of the Cairns Group (countries who do not provide export subsidies), i.e. the elimination of such subsidies by the end of 2013 for developed countries; the elimination date for developing countries would be 2016. The text also ensures that commitments in favor of net foodimporting and least-developed countries are unaffected. For cotton, all remaining export subsidies would have to be eliminated from the start of the implementation period. Secondly, a parallel disciplining of subsidized export credits is part of the same parcel. Here too, however, the interests of beneficiaries will be taken into account—indicating a weakening of the export credit discipline for such cases, and a collateral favor to the exporting country applying credit subsidies. The third front in the field of export competition is the practice by some large state trading enterprises of undercutting competitors through so-called transfer pricing. The key question is whether state monopolies would be outlawed or just disciplined. Even though the modalities contain some slight improvements over earlier versions, it is very uncertain + Under the so-called de minimis provisions, developing country Members are not required to reduce their tradedistorting domestic support if the aggregate value of the product-specific support they provide to their farmers does not exceed 5 percent of the total value of production of the product in question.

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whether these represent a real constraint in comparison with the present, largely ineffective GATT Article XVII on the same subject. Fourthly, there is the matter of international food aid. The objective here is to avoid commercial displacement or market creation by parallel, unsubsidized exports from donor countries. This very sensitive topic has allied surplus producers and many poor, aiddependent importing countries. The fear of the latter that they will see food aid dwindle because of new WTO disciplines has prevented, for the time being, anything more than best endeavor formulations. Furthermore, disciplines for introducing new export restrictions would be tightened. But here too, it is unclear whether the new disciplines contemplated are more stringent than the largely ineffective GATT Article XI:2(a) and AoA Article 12. Even more regrettably from a global food security and food importing viewpoint, there are absolutely no new disciplines proposed for differential export taxes (i.e. imposing higher export duties on raw materials than on processed products—the mirror image of tariff escalation). Another subject, of great importance for ―Old World‖ countries with specialty products, including Turkey, is the hotly debated additional protection of geographical indications (see Chapter 13 by Karapinar and Temmerman). This issue continues to lack even a proposal for a negotiated improvement in the December 2008 modalities.

Implications for Turkey Based on this overview of the December 2008 modalities we can now make a few assumptions about their impact on Turkey‘s agricultural trade and policies. We subdivide this crucial question into two subsections, one on export interests and one on import sensitivities.

Export Interests In a recent study, the World Bank estimated the cost of current tariffs on all goods plus agricultural subsidies. Although other studies have obtained different results, all agree that for all countries together this cost could well represent a three-digit billion dollar figure (Anderson and Martin, 2006). As a percentage of gross domestic product (GDP), the cost to developing countries is even one-third higher than to high-income countries. The cost of services regulations and non-tariff measures is not included here, but it seems that the Doha Round results overall will particularly benefit developing countries. In addition, domestic support reductions in the markets of rich countries as well as the price increases expected from the abolition of export subsidies and other export competition instruments represent additional trade growth opportunities from which developing countries are likely to benefit more than others. Turkey is likely to derive considerable gains from multilateral trade liberalization, even if ―Doha‖ results in only a partial liberalization of access to its major export markets. This is probably the single biggest potential boost to agricultural exports from Turkey. It will be even bigger as a result of substantial domestic reforms undertaken before and during the implementation phase of the Doha Round results, i.e. probably within a 5-year period after entry into force.

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It is important to note in this context that Turkey is also one of the relatively few developing countries with the right to subsidize its agricultural exports. According to its WTO Schedule of concessions and commitments, an impressive array of products can be subsidized up to a maximum limit (as from 2004) of US$ 105,275,439. As there have been no recent notifications to WTO on Turkey‘s export subsidies, we do not know the exact amount. Yet a recent publication of the Official Gazette of the Republic of Turkey announced that Turkey currently provides export subsidies for 16 product groups out of the 44 allowed in its WTO Schedule of concessions and commitments (Resmi Gazete, 2009). However, after the implementation of the Doha Round results (for developing countries probably 10 years after entry into force) Turkey will not be allowed to provide any such subsidies. This means that export prices will increase by the amount which today is spent as a subsidy. Even more importantly, these amounts indicate a ―European‖ type of surplus disposal policy (Anderson, Kurzweil, Martin, Sandri and Valenzuela, 2008). This means that under the new WTO limits, considerable domestic and export support policy adjustments will be necessary. Turkish exports of agricultural products will also find an improved market environment after ―Doha‖ because the EU and the other trading partners will have to adjust their import duties. Of course, other developing countries will benefit from the same market access improvements and from the same flexibilities as Turkey. For example, Egypt and Moldova will be able to shield their imports from Turkey with the same safeguard instruments, and they will benefit from the same improvements as Turkey for their exports to the EU. Although this makes scientific calculations on overall export perspectives and relative competitivity changes at a national level very difficult, there is a need for more quantitative work (e.g. computable general equilibrium (CGE) modeling) based on the new parameters as described above.

Import Sensitivities ―Doha‖ will also mean tariff reductions for imports into Turkey. The surprisingly high tariff rates skillfully negotiated and bound during the implementation of the Uruguay Round results indicate the sensitivities during the base period 1986–1988 (Table III). The highest tariffs apply to different types of meat (180-225 percent), whereas all dairy products and all cereals are bound at 180 percent ad valorem. Other three-digit tariffs apply to bananas (149 percent), tea (168 percent), sugar (135 percent) and tobacco products (140–160 percent). However, according to the WTO/International Trade Centre (ITC) calculations in Table III, the presently applied rates are on average 42 percent, while the scheduled rates amount to 60 percent. In addition, most other products are dutiable at much lower rates—a typical scenario for a dualistic agriculture system with both strong and weak performers. Nevertheless, even if many applied tariffs are now below the bound rates they still indicate two problems. First, it appears that for a large number of products, Turkey is much less competitive than it would appear when considering its ranking within, say, the Organisation of Economic Co-operation Meat, dairy products, eggs, honey, cut flowers, potatoes, tomatoes, dried onions, frozen and dehydrated vegetables, chickpeas, lentils, citrus fruit, apples, frozen fruit, cereals, oils and margarine, sausages and prepared meat and fish, bakery products, fruit and vegetable juices, and tobacco. Author‘s calculation. Except for rice for which the import duty is only 45 percent.

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and Development (OECD) group of countries.+ Second, it is obvious that drastic tariff reductions, not to speak of accession to the EU, would represent a very serious challenge to the domestic producers of such products. This not untypical, dualistic tariff structure reflects today‘s agriculture in Turkey. It also explains Turkey‘s general approach to the agriculture negotiations in WTO. As a member of the so-called ―Group of 33‖ (G33) it demands mainly two flexibilities: 1. ―Special product‖ treatment for products linked to its policies on food security, livelihood security and rural development. The December 2008 modalities foresee a two-tier structure and limit the option of products escaping tariff cuts. The previous reduction percentage ranges are replaced with single figures. Now, 12 percent of products could be declared ―special.‖ Up to 5 percent of these products (6 percent in the previous draft) could be completely exempt from tariff reductions. In any case, the tariff cuts on special products would have to average 11 percent. 2. A ―Special Safeguard Mechanism‖ (SSM) against import surges threatening domestic production. Under the SSM, developing countries would be allowed to temporarily protect their producers through increases in import tariffs. The different formulas for the SSM remain one of the most contested issues in the negotiation. The modalities now include possible disciplines to avoid the safeguard being triggered ―frequently and frivolously‖; they also provide an indication of if, when, and by how much, the increase in tariffs can exceed present bound ceilings (or ―Pre-Doha Round bindings‖). The latter is a particular problem which was repeatedly raised at the highest negotiating levels and in the reporting media. An additional paper now offers draft text (with options) for adjustments if the SSM raises tariffs above pre-Doha bound rates: when it would be triggered, how high the tariff would go, how long it would last, when it could be triggered again, and whether it could also be triggered when prices are not falling. How important these flexibilities will eventually turn out to be is thus still a wide open question. However, it should not be forgotten that lower tariff cuts will also mean higher prices for food consumers and less overall welfare benefits, and this is true not only for urban consumers: poor non-farm households, even in rural areas, spend a large proportion of their budget on staple foods. Even poor farm households have little or no surplus of staple foods to sell, which means they, and the true subsistence farmers, do not benefit from higher domestic prices (Martin and Ivanic, Forthcoming). As in other countries, the main beneficiaries in Turkey would probably be the larger and more specialized farms. + Based on ―standard international trade classification‖ used by the OECD, Turkey has one of the lowest comparative advantages in cereals, ranking 21st among the 30 members of the OECD; on the other hand, it has one of the highest comparative advantages in high-value fruits, nuts and vegetables. In 2004, it ranked third in edible fruits and nuts, sixth in edible vegetables (Organisation for Economic Co-operation and Development, 2006). Yet, its market shares in OECD vegetable and fruit markets were only two and seven percent, respectively. The other members of the G-33 are Antigua and Barbuda, Barbados, Belize, Benin, Botswana, China, Congo, Côte d‘Ivoire, Cuba, Dominican Republic, Grenada, Guyana, Haiti, Honduras, India, Indonesia, Jamaica, Kenya, Korea, Mauritius, Madagascar, Mongolia, Mozambique, Nicaragua, Nigeria, Pakistan, Panama, Peru, the Philippines, Senegal, St Kitts and Nevis, St Lucia, St Vincent & the Grenadines, Sri Lanka, Suriname, Tanzania, Trinidad and Tobago, Uganda, Venezuela, Zambia, and Zimbabwe.

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Table III. Turkey’s Tariff Profile (2008). Part A. Tariffs and imports: summary and duty ranges.

Simple average final bound Simple average MFN applied Trade weighted average

Total 28.3

Agricultural 60.1

Non-agricultural 16.9

2007

10.0

46.7

4.8

2006

4.5

28.4

3.6

Part B. Frequency distribution of tariffs. Agricultural products

Final bound MFN applied Imports

Duty 0≤5 5 ≤ 10 10 ≤ free 15 Tariff lines and import values (in %)

15 25

≤

0.4

3.5

3.7

6

20.6

2007

14.8

5.1

4.3

4.8

2006

19.3

3.6

13.3

9.8

25 50

≤

50 ≤ 100

>10 0

25.8

21.9

18.1

15.1

21.6

12.4

13.8

13.3

23.5

10.3

6.9

Part C. Tariffs and imports by product groups. Final bound duties AVG

MFN appliedduties

Imports

Animal products

138.5

Duty free in % 2.9

Max

Binding in %

AVG

225

100

127.5

Duty free in % 7.2

Max

Share in %

225

0

Duty free in % 95.6

Dairy products

165.8

0

180

100

133.1

0

170

0.1

0

Fruit, vegetables, plants Coffee, tea

38.4

0

146

100

34.9

6.9

146

0.4

2.8

80.2

0

168

100

36.4

8.3

145

0.2

59.6

Cereals and prep. Oilseeds, fats, oils Beverages and tobacco Sugars and confectionary Cotton

67.6

0

180

100

39.2

5.8

130

0.4

0.6

24.5

0

68

100

16.2

11.7

60

1.8

5.7

83.4

0

167

100

35.7

19.8

75

0.2

1.8

114.8

0

135

100

103.2

0

135

0

0

10.9

0

13

100

0

90

0

1.2

0

Other agricultural 30.3 0.2 75 100 10.7 39.8 47 0.6 68.2 products Fish and fish 51.5 0 82 21.5 33.3 9.6 82 0.1 18.6 products Source: World Tariff Profiles 2007, World Trade Organization and International Trade Centre UNCTAD/WTO.

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A search of recent WTO documents produces evidence of certain trade problems pointing to some other difficulties Turkey already faces with the present rules and obligations. So far Turkey has been a respondent in eight dispute settlement cases (it has acted as a complainant in two cases), three of which relate to agricultural products (fresh fruit, pet food and rice). Among these cases, only the rice dispute reached the stage of a panel report finding Turkey to be in breach of its WTO obligations. However, it could well be that there are other import requirements acting as trade barriers with doubtful legal standing under the relevant WTO rules and disciplines. Indeed, a number of domestic support policies notified to the WTO indicate other Turkish import sensitivities under the present rules and obligations. The last publicly available notification was made for the year 2001. It indicates for all concerned products a current total aggregate measurement of support (AMS) situated below the socalled de minimis limit (maximum 10 percent of the value of production), except for sugar (at 41 percent) but where ―no private buyer‖ existed. A number of delegations to the Committee on Agriculture questioned the accuracy of these figures. The Turkish delegation replied that, for instance, direct income support under the Agricultural Reform Implementation Project (ARIP) was compatible with green box requirements, and that the Turkish Grain Board no longer made intervention purchases for cereals (see Chapter 4 by Akder for how this is not the case). The delegation from the United States which had requested this information ―complimented Turkey [on] its decision to move from Amber Box policies to Green Box policies to support their farmers.‖+ However, the import licensing procedures, which were also queried at this meeting, subsequently led to the dispute settlement case on rice referred to above. In the case of future complaints against tariff-rate quota administration methods, or in respect of certain conditions e.g. for duty exemptions, Turkey‘s WTO schedule may or may not withstand legal scrutiny: ―Free when imports comply with rules and conditions introduced by relevant Turkish authorities‖ (for imports of domestic animals) or ―Free when imports comply with rules and conditions introduced by the Ministry of Agriculture and Rural Affairs‖ (for vegetables). It is perhaps useful to remember the existence of the WTO Agreement on Import Licensing Procedures which lays down particular rules for such socalled ―non-automatic‖ licenses.

Outlook The Doha Round negotiations will in all likelihood drag on for some time. In addition, a successful conclusion will still require ratification, and implementation will not begin until several months or years after that, and would be concluded within a period of time yet to be agreed, perhaps 5 years for developed and 10 years for developing countries. Similarly, accession of Turkey to the European Union is unlikely to take place in the near future. Regardless of these uncertainties, Turkey would be well advised to do the following: Document WT/DS334/R and Annexes, dated 21 September 2007. For a summary of this case cf. http://www.wto.org/english/tratop_e/dispu_e/cases_e/1pagesum_e/ds334sum_e.pdf (accessed 23 June 2009) See document G/AG/N/TUR/14 dated 30 May 2002 concerning domestic support commitments for the calendar year 2001. + See the note by the WTO Secretariat on the Report of the Meeting held on 26 September 2002 (document G/AG/R/32 dated 6 November 2002, p.34).

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a.

carefully look into its present way of implementing the WTO Agreements, taking into account criticism by other Members in the various WTO committees and the Trade Policy Review Reports by the WTO Secretariat; b. to participate very actively in the negotiations; and c. to rigorously analyze what kind of adjustments might become necessary if the Doha Round actually is concluded.

The link with the ongoing agricultural production reform process in Turkey is of course a crucial element in the work of assessing and reformulating Turkey‘s agricultural trade policy. Policy space, even for developing countries, might be reduced in the future. Yet this is the price all WTO Members have to pay in exchange for more market access and for stricter disciplines, which also apply to their competitors. As pointed out in the introduction to this chapter, the increasingly important non-tariff barriers and import regulations, and private standards which are described in Chapter 19 by Jusoh affect Turkey‘s exports but are not even part of the present negotiating agenda. The same goes for the sanitary and phytosanitary disciplines addressed in Chapter 15 by Burkard. Bilateral negotiations may resolve some of these issues, but on a global scale, and save for dispute settlement results only a ―Round after the Round‖ will be able to clarify some of these issues. Nevertheless, while watching over its export interests, Turkey should also continue reviewing its domestic policies in all fields relating to its agriculture, including in respect of their compatibility with relevant EU legislation. In conclusion, a permanent and carefully coordinated process of domestic policy reform is probably the best path to success in a world presenting both global challenges and global opportunities. While ‗good policies‘ should always be made at home, there is ample evidence that international disciplines and limitations can support domestic reform and, more importantly, make these reforms irreversible.

ACKNOWLEDGMENTS This research project was funded by the National Centre for Competence in Research on Trade Regulation (NCCR Trade), a research program funded by the Swiss National Science Foundation and hosted by the World Trade Institute at the University of Bern, Switzerland.

REFERENCES Akder, H. (2008). Calculation of WTO Notifications for Turkey, 2002-2006. Report drafted for Food and Agriculture Organization Turkey Office, TCP/TUR/3101- Component 3: WTO Capacity Building for Turkey. Anderson, K., & Martin, W. (Eds) (2006). Agricultural Trade Reform and the Doha Development Agenda. Washington, DC: World Bank. Anderson, K., Kurzweil, M., Martin, W., Sandri, D., & Valenzuela, E. (2008). Measuring distortions to agricultural incentives revisited. World Bank Policy Research Working Paper 4612, April.

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Haeberli, C. (Forthcoming). Food security and WTO rules. In B. Karapinar, & C. Haeberli (Eds), Food crises and the WTO. Cambridge: Cambridge University Press. Martin, W. & Ivanic, M. (Forthcoming). The food price crisis, poverty and agricultural trade policy. In B. Karapinar, & C. Haberli (Eds), Food crises and the WTO. Cambridge: Cambridge University Press. Organisation for Economic Co-operation and Development (OECD). (2006) Dataset: Micro Trade Indicators (by category of goods, HS), available at