OBG talks to Recep Konuk, Chairman, Konya Şeker

Interview: Recep Konuk

Will greater local manufacturing, mechanisation and new techniques in agriculture lead to consolidation and unemployment?

RECEP KONUK: In 2011 agriculture accounted for 8.4% of GDP and 25% of employment. In 2002, those numbers were 10.3% and 35% respectively, so there has been some decline in the role of agriculture.

Turkey has a dynamic, fast-growing economy. As a natural consequence of this process, sectors such as industry, services and tourism have above average growth. However, we need to also look at other data. For instance, Turkey’s national income was $230bn in 2002 and $734.9bn in 2010. Within this growing economy, the share of agriculture was $23.7bn and $61.8bn, respectively. During this time Turkey’s crop fields did not expand and production patterns did not significantly change, but there was a 10% decline in unemployment. By increasing productivity and expanding to crop varieties with more economic value, the sector grew.

Increasing productivity was possible by improving infrastructure for agricultural production, as well as seed quality, farming techniques and machines. With industrialisation, mechanisation and innovation, the need for manual labour has been declining, but we cannot conclude that this will lead to unemployment. Increasing the sector’s efficiency and competitive capacity causes an accumulation of capital within the industry, which provides the basis for the growth of agriculture-integrated manufacturing. Consequently, the labour force that is pushed out of the agriculture industry is reabsorbed through sub-industries, services and manufacturing.

Is Turkey primarily focused on raw produce rather than refined or processed foodstuffs?

KONUK: Turkey is a self-sufficient country in grain production, but it is not a major exporter of raw produce. Additionally, much of the material used in the production of exported goods is imported. In 2011, for example, agricultural exports were worth $14.21bn and imports were worth $10.65bn. Imported goods include a wide range of products, such as wheat, cotton, leather, wood and rubber. Some of these goods are imported for domestic consumption, but a large portion is processed and exported.

Until the last 15-20 years, foodstuffs had a big share in Turkey’s exports, the majority of which were exported before being processed. This balance has shifted in the past decade in favour of processed goods, which now have a larger share than unprocessed foodstuffs. Although we cannot claim yet that Turkey has fully moved to the export of refined or processed foodstuffs, it can be described as a country in transition toward that target.

In what way has collaboration and consolidation improved efficiency and innovation?

KONUK: Collaboration has had an absolutely positive effect on the agriculture sector, and, as a cooperative society, Konya Şeker has seen it directly impact agricultural production. The first consequence of this is a demand guarantee, the second is the better pricing of goods and the third is the possibility of planned agriculture. Finally, collaboration increases productivity. These processes enable research and development activities and support the producers as they adapt more innovative techniques and technologies and offer new products.

Through a series of support mechanisms – such as helping producers obtain the right seeds, fertilisers and soil tests, and facilitating better access to micro-irrigation techniques – striking improvements have been achieved in the production methods of sugar beets, corn, barley and potatoes. Canola, which is completely new to the region, is now being grown utilising high-productivity methods. These innovative goods enabled an increase in production volumes and have helped lead the way for more energy crops, which hold great potential for the sector’s future.