US embassy cable - 03ANKARA5879

UNCLAS ANKARA 005879 
 
SIPDIS 
 
 
DEPT FOR EB/IFD/OIA 
DEPT PLEASE PASS USTR FOR LERRION 
USDA FOR FAS/ITP HENKE, MEYER, HANSEN 
 
 
SENSITIVE 
 
 
E.O. 12958: N/A 
TAGS: EINV, EAGR, TU 
SUBJECT:  Cargill and ADM Move a Step Closer to Higher Sugar 
Quota but Zoning Question Still Pending 
 
 
1. (SBU) Summary:  A key GOT board has recommended 
increasing the quota for corn syrup producers to 15 percent 
of the total sugar quota, which, if implemented, will help 
Cargill and ADM/TateLyle avoid production losses on their 
massive investments in Turkey.  Although the sugar beet 
industry is protesting this recommendation, Cargill believes 
the GOT Council of Ministers is likely to approve the 
increase.  On Cargill's zoning issue, the Industry and 
Commerce Ministry has still not forwarded draft zoning 
amnesty legislation to the Council of Ministers.  End 
Summary. 
 
 
2. (U) The GOT's Sugar Board recently recommended increasing 
the quota for corn syrup producers to 15 percent of the 
total sugar quota for the coming year.  This should enable 
Cargill and ADM/TateLyle, which have made the largest 
foreign investments in Turkish agriculture, to avoid the 
heavy financial losses that the Sugar Law's 10 percent 
default quota would have imposed.  However, the sugar beet 
industry has launched a public campaign against the 
decision, which has yet to be ratified by the Council of 
Ministers.  The sugar beet producers union has placed 
advertisements in the Turkish press protesting the quota 
increase and claiming that beet sugar inventories now stand 
at some 528,000 tons.  Industry and Commerce Minister Coskun 
has publicly disputed some of the sugar beet producers 
claims.  Cargill believes the Cabinet will approve the quota 
increase at its next meeting on September 22. 
 
 
3. (SBU) Unfortunately, there appears to have been no 
movement on the unresolved zoning issue that threatens to 
shut down Cargill's plant in Orhangazi.  Industry Minister 
Coskun has repeatedly promised to seek the Government's 
support for legislation that would, in effect, grant an 
amnesty to Cargill for having built its factory on 
agricultural-zoned land.  However, the Ministry has yet to 
forward the draft legislation to the Council of Ministers, 
saying it is still collecting opinions from other concerned 
bodies. 
 
 
4. (U) Cargill also reported developments in the two legal 
cases against it, both of which relate to zoning.  In the 
first case, involving Cargill's construction permit, the 
relevant decision of the Danistay (State Council) ruled that 
Cargill's opponents were not eligible to contest the permit 
issuance.  However, the same Danistay decision ruled in 
favor of those same opponents' suit against Cargill's 
emissions permit.  Cargill is now appealing that decision to 
the full Danistay.  Given the uncertainties of how the 
Danistay will rule, Cargill is pushing hard for the new 
zoning legislation. 
 
 
5. (SBU) The Ambassador raised the zoning issue recently 
with Finance Minister Unakitan, who offered to meet with 
company representatives.  We have so advised Cargill, which 
told us they would seek a meeting.  Edelman