US embassy cable - 05ANKARA6236

UNCLAS SECTION 01 OF 02 ANKARA 006236 
 
SIPDIS 
 
STATE FRO EUR, EB/TPP/ATP, EB/TPP/BTA 
STATE PASS USTR 
USDA FOR FOR ITP/MACKE/LEIER 
MOSCOW FOR AGRICULTURE 
BRUSSELS FOR AGRICULTURE 
 
SENSITIVE 
 
E.O. 12958:N/A 
TAGS: ETRD, EAGR, KPAO, TBIO, Avian Influenza Virus 
SUBJECT:  Turkish Agriculture on the Eve of EU Negotiations 
 
 
Sensitive but unclassified.  Not for Internet Distribution. 
 
1.  Summary.  Turkey is expected to open the chapter on 
agriculture by January 2006.  While agriculture will be one 
of the more difficult negotiations, given the significant 
and wrenching changes needed in rural areas, Turkey may 
benefit from the process itself.  The Turkish government is 
being credited for its recent response to the avian 
influenza outbreak.  Coming on the heels of the October 
announcement, that EU negotiations would begin, Turkey may 
already be reaping the benefits.  End Summary. 
 
 
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Turkish Agriculture - The Polish Model 
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2.  (SBU) Turkish agriculture officials expect to open 
negotiations with the European Union on agriculture in 
December or January.  It will be, as many officials have 
noted, a daunting task.  Agriculture still represents about 
12 percent of Turkey's GDP, which is quite high.  Poland's 
EU experience may be very similar to Turkey's.   Both 
countries have very modern food processing sectors, which 
should be able to compete, quality wise, in international 
markets.  At the same time, adapting agricultural production 
will be a formidable task.  Like Poland 25 to 30 percent of 
Turkey's population is involved in agricultural production 
with 40 percent of Turkey's total population still residing 
in rural areas. The average farm size in Turkey and Poland, 
despite some improvement in recent years, is only 6 - 8 
hectares.  One difference is that the Turkish rural 
population is less educated than in Poland, which will make 
any transition more difficult in Turkey.  Thus far, the GOT 
has done little to make rural Turks aware of the wrenching 
changes likely to come, as Turkey's small landholders using 
antiquated methods are forced to compete in the EU market. 
Given Turkey's already high unemployment and rural-urban 
migration, the GOT is likely to postpone as long as possible 
the needed changes in the agriculture sector. 
 
 
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A Zen-Like Approach 
------------------- 
 
3.  (SBU) Over the past several months, FAS/Ankara has met 
with agri-business representatives to get their views on EU 
membership.  Interestingly, most were somewhat pessimistic 
about Turkey's long-term chances and that for their industry 
the benefits might not be as substantial as in other 
sectors.  Given Turkey's previous agreements with the 
European Union, trade may not increase substantially. 
Turkey already has access to the European market for those 
commodities for which they are most competitive; fresh 
fruits and vegetables, vegetable oils, dried fruits, nuts 
and processed products.  For grains and oilseeds, Turkey 
will most likely not be competitive. 
 
4.  (SBU) Despite the somewhat negative take on prospects 
for eventual EU membership, these same Turkish companies 
believed that the negotiating process alone would be 
extremely beneficial to Turkish agriculture.  First, there 
would be more transparency in regulations and government 
decision making.  Second, quality standards would improve 
for Turkish products.  Third, the Turkish legal system would 
be much more open. Fourth, there would be more efforts made 
in educating the rural population.  And finally, each of 
these would contribute to Turkey's image, which would 
hopefully attract more investment in the agriculture sector. 
These benefits were underscored during a recent trip by 
FAS/Ankara to Bursa and Bandirma as well as the recent 
outbreak of AI in Turkey. 
 
 
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The Mamara Region - Export Oriented 
------------------------------------ 
 
 
5.  (SBU) The Marmara region is very indicative of Turkish 
agriculture.  Small farms share the area with some of the 
most modern food processing facilities in Turkey.  At the 
same time, the agri-business companies are not typical. 
AgCounselor and AgAtt visited 9 Turkish companies during the 
first week of October, the majority of which (planting 
seeds, vegetable oil, dairy) are export oriented including 
two poultry companies hoping to soon export to the European 
Union and Russia.  At Sutas, one of the larger Turkish 
dairies, company representatives viewed the start of EU 
negotiations as an incentive to improve quality and raise 
production.  Currently, Turkey produces 11 - 12 million tons 
of milk.  However, only 2 million tons is certified and 
acknowledged by the EU as true production.  The majority of 
milk is produced on small farms with little refrigeration or 
quality control. Bacterial levels are in millions versus 
thousands in most modern companies.  Sutas purchases milk 
from 35,000 households, the majority possessing less than 5 
animals.  The Sutas officials believed strongly that the 
process for EU membership alone would be an incentive to 
improve the quality of milk.  Since dairy production will be 
subject to quotas, there is equal incentive to raise the 
level of certified milk.  This in turn will reap both 
economic and health benefits. 
 
--------------------------------------------- ----- 
AI Outbreak - Kudos to the Ministry of Agriculture 
--------------------------------------------- ----- 
 
6.  (SBU) EU officials believe that the Turkish government's 
performance during the recent AI outbreak in Turkey was 
directly related to EU membership talks.  Coming on the 
heels of the announcement in October, the Turkish Ministry 
of Agriculture's performance during the recent crisis could 
be credited to work and training with the European Union. 
Turkish officials noted that the quarantine they implemented 
was based on the quarantine used in the Netherlands during 
that country's recent AI outbreak.  For all intents and 
purposes, the ministry's performance has been applauded by 
Turkish industry and consumers.  Their decisive approach to 
contain the outbreak and keep the public informed was, 
compared with previous crises, extraordinary.  Their actions 
could also be related to the improved relations with the 
agri-business community and greater willingness over the 
past several years to work cooperatively with private 
companies.  Moreover, Turkish officials seem committed to 
improving the sector's export performance.  Several Turkish 
poultry companies have been preliminarily approved for 
export to the European Union, pending the outcome of 
negotiations on a 19 thousand ton beef-import quota for EU 
beef. On the other hand the Turkish public is less inclined 
to believe the GOT, due in major part to previous missteps. 
 
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Comment:  MARA Get Good Grades 
------------------------------ 
 
7.  (SBU) Turkey's agriculture ministry is not considered 
one of the most open or forward thinking.  Turkey's 
agriculture sector faces many obstacles in the future. 
However, most would agree that the start of EU negotiations, 
irregardless of the end result, will still benefit the 
sector.  Recent events have shown the Ministry of 
Agriculture capable of decisive action and a willingness to 
work with Turkish companies.  Turkish companies view the 
negotiations as an incentive to improve quality and 
production.  While we are at least two months away from 
opening the start of long and arduous agriculture 
negotiations the Ministry and agriculture sector performed 
well in what might be considered its first test since 
October.  One issue in the event of greater public health 
concerns, however, is the absence of a clear that mechanism 
for effective cooperation between the Ministry of 
Agriculture and the Ministry of Health. There is a recent 
history of poor relations due, at least in part, to previous 
overlapping responsibilities for food safety. 
 
MCELDOWNEY