US embassy cable - 05ANKARA2045

UNCLAS SECTION 01 OF 03 ANKARA 002045 
 
SIPDIS 
 
SENSITIVE 
 
TREASURY FOR PLANTIER 
 
E.O. 12958: N/A 
TAGS: ECON, EFIN, PGOV, SOCI, TU 
SUBJECT: TURKEY: SMALL FARMING TOWN WITH THRIVING 
TRANSPORTATION INDUSTRY 
 
 
1. (SBU) Summary.  As one of Anatolia,s small 
agriculture-based communities, Bala is representative of 
Turkey's traditional economy.  Farmers rely heavily on the 
central government,s direct income support payments to 
compensate for increasing input costs.  Although there are 
hopes to establish an irrigation system, agriculture remains 
antiquated.  At the same time, the local transportation 
industry provides a badly-needed supplement to agriculture. 
Local leaders have tried to attract outside investment to 
help find other opportunities for growth but have been 
unsuccessful.  However, there seems to be a strong emphasis 
on education and Bala has proudly managed to support and 
promote educational opportunities for its residents.  End 
Summary. 
 
2. (U) Bala is a small agricultural sub-province, 69 
kilometers south of Ankara,s city center.  Its main economic 
activities are agriculture, animal husbandry and 
transportation.  Embassy officers recently visited Bala,s 
city center which is set atop a hill overlooking the 
sub-province's 3 municipalities and 57 villages.  The city 
center itself is very small with a population of about 6,500. 
 Like many small towns in Anatolia, the houses were rundown 
and there was no evidence of any new construction. 
 
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Farmers Need Support Due to High Input Costs 
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3. (U) Bala's farmers grow wheat, barley, sunflower, sugar 
beet, corn, and fruit.  The President of the Agricultural 
Union, Nizmettin Gurbuz, proudly told us that Bala also 
produces the highest quality grape branches for wine 
vineyards.  The Head of the Truck Drivers Union, Erbal Erdem, 
said that in terms of land, Bala is the second or third 
largest farming area in Turkey*Konya being the largest. 
 
4. (U) The central government provides farmers with subsidies 
and direct income support payments depending on the size of 
the land and the type of products cultivated.  (Note: 
Turkey's transition to direct income supports from other, 
more expensive and market-distorting ag subsidies, has been a 
significant accomplishment of the World Bank-sponsored 
agricultural reform.  End Note.)  Gurbuz admitted that 
without the government,s support, the agriculture industry 
could not survive due to the high cost of inputs such as fuel 
and fertilizer.  For example, growing wheat has not been 
profitable because fuel has become very expensive*to buy one 
liter of fuel, one needs to grow six kilos of wheat.  The 
majority of farmers are just breaking even and not making any 
profit. 
 
5. (U) In addition to the high cost of inputs, the 
agriculture industry faces the problem of the current lack of 
an irrigation system.  Because of this, 120,000 acres of land 
must be kept idle every year.  Local government hopes to 
improve its agricultural industry by introducing irrigation 
methods to diversify its products*specifically by producing 
apples and cherries.  According to the Sub-Governor, Bala,s 
animal husbandry sector was very successful last year and it 
continues to be an important supplier of cattle, sheep, and 
poultry products for Ankara. 
 
6. (U) Agriculture alone does not provide enough income for 
families. Residents must find other forms of employment 
outside the sub-province*some Bala residents go to work in 
Ankara,s city center during the day and come back at night 
or on the weekends*or supplement their income via the 
town,s transportation industry.  There is also seasonal work 
available in wine production at private companies closer in 
to Ankara and local women usually take advantage of these 
opportunities. 
 
7. (SBU) Gurbuz and other Agriculture Union members are 
consoled by the belief that joining the EU will solve many of 
their agricultural woes.  They believe that with full 
membership in the EU, Turkish farmers will see substantial 
agricultural support and an increase in production and 
efficiency in farming.  Some of the members base this belief 
on the reports from their relatives who work in the 
agricultural sector in Germany. (Comment: It appears that 
Agriculture Union members are under the illusion that once 
Turkey enters the EU, they will immediately receive 
sufficient support to revive their agriculture industry.  In 
fact, Turkey's woefully inefficient smallholder farmers are 
likely to be wiped out by the EU's modern agriculture sector, 
rather than propped up with subsidies.  And it remains to be 
seen if the farmers understand that an increased quality of 
production in the EU means much higher standards which 
Turkey,s food industry is not ready to meet.  End Comment.) 
 
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Iraq Fuels Transportation Industry 
----------------------------------- 
 
8. (U) The transportation industry, unlike the agriculture 
industry, has seen a spike in business*mainly because of the 
transportation contracts for bringing goods and supplies to 
Iraq.  90% of Bala residents make their living from 
transportation either as a primary or supplementary form of 
income.  Of the union,s 2,000 active members, 25% of the 
drivers carry goods into Iraq and 50% carry them up to the 
border gates.  The rest transport stone and gypsum within the 
country. 
 
9. (SBU) Like the municipality members and the head of the 
Agriculture Union, the head of the Truck Drivers Union does 
not believe the local economy has improved despite overall 
economic growth in the country.  At the same time, he 
believes that Bala would not be severely affected if Turkey 
was hit by another economic crisis.  He attributes this to 
the availability of income which could always be derived from 
the transportation industry and agriculture*the long-lasting 
mainstays of the sub-province.  Nevertheless, he does admit 
that there would be a huge crisis in the transportation 
industry if truck drivers did not have business with Iraq. 
In the last two years, business has increased 90%.  He also 
mentioned that there is widespread belief in the town based 
on the reports of local media outlets that &the US would 
invade Syria this summer8 and he noted sardonically that 
this could bring greater business opportunities to the 
transportation industry. 
 
10. (SBU) The large increase in business in the 
transportation industry has not fully compensated for higher 
fuel prices.  Since large companies receive the 
transportation contracts and most of Bala,s drivers are 
contracted, the drivers end up paying for the higher fuel 
prices without reaping the profits.  To compensate, drivers 
often double or triple the normal capacity of their trucks*a 
dangerous endeavor which also causes severe damage to 
highways and roads.  Erdem gave no sign that the drivers 
would stop overloading anytime in the near future or that the 
government was doing anything to prevent them. 
 
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Local Leaders Split Views on Local Economy 
------------------------------------------- 
 
11. (SBU) Though the Sub-Governor (Kaymakam), Gunay Ozturk, 
told Embassy officers that Turkey,s overall economic growth 
in the past year has been reflected here in the form of 
increasing trucking jobs and trade, the municipality members 
and local agriculture and truck drivers unions did not share 
the same opinion.  And, when asked about any problems facing 
the sub-province, the Sub-Governor seemed a bit guarded about 
disclosing information.  He did however mention that the lack 
of an organized industrial zone and an inadequate sewage 
system are concerns for the town.  He added that the 
government would address the latter problem in its 
development plans. 
 
12. (SBU) Acting Mayor, Yuksel Yildirim and 3 municipality 
council members met with Embassy Officers and were less 
reticent than the Sub-Governor regarding challenges facing 
the sub-province.  Under the new Metropolitan Municipalities 
Law (MML), the local government, with the inclusion of the 
villages, now provides services to 14,000 people.  Though the 
municipality is receiving 40% more of their past budget from 
the central government because they have to provide for a 
greater number of people, 40% of their new budget goes to the 
Ankara Metropolitan Municipality.  In theory, these resources 
should be returned to Bala in the form of services. 
According to the council members, Bala residents have yet to 
see these services.  Thus, the municipality must provide 
services for 14,000 people with the same amount of resources 
they had to provide services for 6,500. 
 
13. (SBU) Moreover, contrary to the Sub-Governor,s 
assertions, municipality council members believe the current 
economic situation in Bala is poor.  The only permanent 
income the municipality receives comes from property and 
cleaning taxes and the municipality does not have the 
authority to seek revenues through any other means.  The 
number of eligible and willing job-seekers far outnumbers the 
employment opportunities.  And though the sub-province places 
a strong emphasis on education both at the secondary and 
higher education levels, Bala seems to have a large brain 
drain problem and residents seek employment opportunities in 
more affluent communities such as Istanbul or Ankara,s city 
center.  According to the municipality members, approximately 
400 graduates currently cannot find employment in Bala.  The 
members described the unemployment problem as &inevitable.8 
 
 
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Investment Believed to Mitigate Unemployment 
-------------------------------------------- 
14. (U) The municipality has been trying to attract 
investment into the sub-province to mitigate the unemployment 
problem by offering land at very affordable prices and 
infrastructure services.  But so far, they have not managed 
to attract any investors.  In fact, council members told 
Embassy Officers that many Bala residents have moved to 
Ankara,s city center and are leaders in the textile 
industry.  The council members have often gone to these 
wealthy former Bala residents and solicited investments from 
them to no avail.  Still, council members believe investment 
in the sub-province,s other natural resources such as 
&white gold8 (a mineral used in plaster production) and 
iron ore could help alleviate Bala,s economic problems. 
 
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Making Do With Limited Resources 
--------------------------------- 
 
15. (U) Despite the lack of substantial resources, there is a 
serious focus on education in Bala.  There are 6 high schools 
and 35 primary schools in the sub-province.  There is also an 
industrial vocational school and a health vocational 
school*the women who graduate from the latter usually find 
jobs as nurses or secretaries in both the public and private 
sectors.  Though there are no private schools or university 
entrance exam prep courses offered in Bala, the municipality 
pays for transportation to Golbasi or Ankara,s city center. 
 The municipality is also hoping that Hacettepe University 
will open an extension campus in Bala to offer a two-year 
college degree in engineering and electronics.  The 
municipality is willing to pay for fuel and transportation 
costs for professors to come and teach at the school and the 
Social Solidarity Fund has also constructed a 200-bed 
capacity dormitory for students of the proposed Hacettepe 
University campus as well as for the health vocational 
school. 
 
16. (U) In addition to plans to increase educational 
opportunities in the sub-province, Sub-Governor Ozturk 
mentioned that the zoning plan*mainly under the jurisdiction 
of the municipality*was nearly complete and that they are 
currently working on plans to develop an  industrial center, 
sports facilities, and a parking area for the town,s many 
trucks.  According to the Sub-Governor, Bala already attracts 
a large number of weekenders for whom an industrial center 
and sports facilities could also be of use.  The neighboring 
Bala Ataturk Forest provides a welcome respite for 
city-dwellers in Ankara, and weekends are a popular time for 
out-of)towners to picnic, hike and jog in the forest. 
Sports facilities are already available for use.  Those who 
work in Ankara,s city center during the week, often come 
back to Bala to do farmwork and picnic on the weekends. 
 
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Comment 
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17. (SBU) Comment.  For a small town in dry central Anatolia, 
Bala is fortunate to have both the agriculture and 
transportation industries to support its economy. 
Municipality and union leaders may be concerned about the 
effects of higher input costs and they may believe the local 
economy is not reflecting the country,s overall growth. 
However, agriculture and transportation supplement the other 
and local leaders seem to think that even if one struggles, 
the other can make up for the losses.  At the same time, much 
of Bala,s economy is still based on traditional agriculture 
and animal husbandry.  If its farmers believe that upon 
entrance into the EU their current agricultural problems will 
be solved, they are likely to be in for a rude awakening. 
EDELMAN