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Viewing cable 06ANKARA2069, Turkish Agriculture Import Policies
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| Reference ID | Created | Released | Classification | Origin |
|---|---|---|---|---|
| 06ANKARA2069 | 2006-04-17 10:02 | 2011-08-24 01:00 | UNCLASSIFIED//FOR OFFICIAL USE ONLY | Embassy Ankara |
This record is a partial extract of the original cable. The full text of the original cable is not available.
171002Z Apr 06
UNCLAS SECTION 01 OF 04 ANKARA 002069
SIPDIS
SENSITIVE
STATE FOR EUR/SE, EB/EPD, AND EB/TPP/ABT
DEPT PLEASE PASS USTR FOR LERRION, JWEISS
USDA FOR FAS FOR FAA/JDEVER,ITP/ MACKE/THOMAS, LEIER
USDOC FOR DEFALCO
E.O. 12958: N/A
TAGS: ETRD EAGR PGOV PREL GR TU
SUBJECT: Turkish Agriculture Import Policies
Sensitive but Unclassified. Not for Internet Distribution.
¶1. (SBU) Summary. Turkey is a major market for U.S. bulk
commodities and other raw materials important to the
domestic processing sectors. Nonetheless, Turkey continues
to restrict trade in food and agricultural products with a
host of tariff and non-tariff barriers. In addition to
excessively high tariffs, Turkey stifles trade with non-
tariff barriers including import licensing, import quotas
and absorption schemes, seasonal bans on imports and the
implementation of restrictive phytosanitary regulations.
Systemic government involvement in the agricultural sector
substantially restricts and distorts the market and denies
private sector participants the ability to effectively plan
business and trade decisions. End Summary.
---------------------------------------------
World Trade Organization Agreement Compliance
---------------------------------------------
¶1. (SBU) TARIFFS: In the current WTO negotiations on
agriculture, it is fair to say that Turkey's position
resembles that of other developing countries who insist that
tariff reductions cannot be granted without large reductions
in export subsidies and support on behalf of developed
countries. Tariffs remain extremely high in Turkey.
Turkey's 2006 Import Tariff Schedule shows no tariff
reductions and some notable increases. Of current interest,
the durum tariff was increased to 100 percent, the milling
wheat and corn tariffs were increased to 130 percent and the
soybean meal and sunflower meal tariffs were raised to 13.5
percent each. In addition, the GOT announced on March 11,
2006, that soybean and soybean meal tariff imports increased
from 0 to 10 percent and 8 to 13.5 percent, respectively, at
a time when the poultry and feed sector are still trying to
recover from the effects of avian influenza. Officially,
Turkey states that high tariffs are the only means available
to protect its agricultural sector, and does not support the
U.S. WTO position on market access.
¶2. (SBU) TARIFF-RATE QUOTAS: Turkey chose not to establish
any agricultural tariff-rate quotas under the WTO. However,
Turkey does have a number of TRQs in some of its bilateral
trade agreements. Turkey has TRQs available to Europe for
grains, livestock and beef, dairy products, vegetable oils,
seeds, tomato paste, and others. (Turkey has refused to
honor its EU TRQ for slaughter cattle or meat products for
several years, basing this policy on the discovery of BSE in
Europe.) Turkey has also referred to its corn and rice
import regimes as TRQs, however these import regimes, which
include domestic absorption requirements and import quota
application procedures have not been announced to the WTO as
TRQs.
¶3. (SBU) SANITARY AND PHYTOSANITARY MEASURES AND OTHER NON-
TARIFF BARRIERS: Turkey is a signatory to the WTO SPS
agreement and participates as a member of the Codex
Alimentarius, the International Plant Protection Convention
(IPPC), and the OIE. Turkey recently became a member of
International Union for the Protection of New Varieties of
Plants (UPOV). Turkey's Ministry of Agriculture and Rural
Affairs (MARA) General Directorate of Protection and Control
takes a strong interest in implementing Turkish standards
for the protection and improvement of Turkish agriculture.
Turkey has begun to gradually adopt EU directives and SPS
standards, which has resulted in a lack of transparency as
the Directorate of Protection and Control often implements
new standards with no written notification or scientific
basis. Turkey maintains a cumbersome import licensing
system to regulate all trade in food and agricultural
products, including processed products. Essentially, the
system is used to restrict imports. Companies often must
wait weeks or months for licenses. One products arrive at
port, Turkish officials claim that all shipments must be
tested, despite the fact that testing equipment may not be
available. This leads to extra costs and higher demurrage
costs as goods must wait in port while tests are being
conducted.
-------------------------------------
Trade Barriers for Livestock Products
-------------------------------------
¶4. (SBU) Imports of livestock and most products are
prohibited. There have been no imports of poultry meat to
Turkey since 1993 when the Government requirement that
poultry meat may only be imported from foreign processing
facilities that were inspected and authorized for export by
Turkish Ministry of Agriculture officials. Poultry meat may
be transshipped to other countries through the free trade
zones.
¶5. (SBU) Turkey has not allowed livestock for slaughter or
meat imports from any country since 1996. Outbreaks of BSE
and FMD in Europe strengthened Turkey's resolve to keep
livestock and meat products out of the country. Turkey has
not established any animal or public health requirements for
the entry of meat. Since November of 1999, Turkey has
allowed the import of some breeder cattle, but restrictions
on who can import, and under what circumstances, still
constrains imports. The United States is currently not able
to export breeding livestock to Turkey since the EU placed
the United States in the 3rd BSE risk category. Note:
Despite inclusion of a 19 TMT beef quota in Turkey's
Custom's Union Agreement with the European Union, the EU has
never been able sell beef to Turkey. End note. Turkey's
BSE Committee has decided not to import any breeding cattle
from category 3 countries (based on EU system). Although
Turkey does permit imports of semen and embryos, its
standards restrict trade in those products.
-------------------------------------
Trade Barriers for Grains and Legumes
-------------------------------------
¶6. (SBU) Turkey uses various mechanisms to limit imports of
grains and pulses. In addition to an import licensing
system that unnecessarily delays shipments and adds costs,
the GOT also suspends licenses for may commodities during
their harvest season without any prior notification. In
addition, for some commodities, rice for example, it
requires purchases of domestic crop in order to receive
permission to import. For pulses, the GOT requires a minimum
import price along with financial and economic information
about the exporter before imports are allowed. In the end,
the GOT aims to make the import system so arduous, that
exporters and importers decide to forego this market.
--------------------------
Further Processed Products
--------------------------
¶7. (SBU) PET FOOD: The GOT established a new regulation in
February 2005 requiring dioxin testing on all pet food
despite the fact that domestically-produced pet food is not
tested. In addition, all pet food from the United States
containing ruminant ingredients other than tallow and hides
and skins is banned because of BSE.
¶8. (SBU) MARA requires that a Health Certificate or a
Certificate of Free Sale accompany all imports of processed
products and packing materials that will be in contact with
food. A federal or state agency stating that the product is
safe for human consumption must issue the certificates.
Depending on the product, more information and/or testing
may be required. As FDA does not issue such certificates,
and U.S. states do to varying degrees, this issue has been a
significant challenge to increasing U.S. exports of high-
valued processed products to Turkey. For example, the
burden is on the importer to notify the exporter of this
requirement, who must locate an appropriate U.S. agency to
issue such a document. Again, the documentation
requirements discourage exporters and importers alike.
Delays occur as Turkish customs officials often question the
validity of state-origin certificates.
----------------
Export Subsidies
----------------
¶9. (SBU) DIRECT EXPORT SUBSIDIES: Annually, Turkey's Export
Subsidy program is announced in the Official Gazette
(Turkey's Federal Register). In its 2006 export subsidy
program, according to the February 15, 2006 Official Gazette
announcement, Turkey listed cut flowers, vegetables
(dehydrated and frozen, excl. potatoes) olive oil, prepared
or preserved fish, preserves and pastes (incl. tomato),
frozen fruits, preserves, and concentrated fruit juices,
poultry meat, natural honey, eggs, chocolate, biscuits,
waffles and cakes and pastas as receiving subsidies.
Payments are usually delayed, or come in the form of tax
offsets. In the past, and in addition to the notified
subsidies, Turkey has exported grains and sugar at a loss by
paying producers prices, which are above the world market,
and then selling to exporters at whatever prices the market
offers.
¶10. (SBU) DOMESTIC SUPPORT: Turkey claimed Special and
Differential Treatment relating to domestic support,
notifying the WTO that its product-specific support was well
within the 10 percent de minimis level, as was the Aggregate
Measure of Support (AMS) calculation. As a result, none of
Turkey's domestic support is subject to reduction. Turkey's
domestic support is limited, however, according to letters
of intent signed with the IMF as part of the overall
Economic Reform Program and by domestic fiscal constraints.
Domestic support payments are announced all year-round
through the newspapers so the numbers are constantly
changing. Information indicates that the 2006 programmed
domestic support budget is 4 billion YTL, or approximately
USD $3.1 billion. Turkey's 2005 domestic support budget is
reported as 3.8 billion YTL, or approximately USD $2.4
billion. Of this total, about half is for direct income
support (paid per dekar); about 20 percent (USD $625
million) is for commodity specific premium payments; and the
rest is divided up between the Livestock Development
Program, tea production support services, diesel support,
VAT reduction for fertilizer, and agriculture credits and
alternative crop production support. For the last three
years, the GOT announced direct price premiums for five
commodities: soybeans, canola, olive oil, sunflower seed
(for oil production) and cotton. In 2004, corn also became
eligible for premium payments.
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Agricultural Reform Program
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¶11. (SBU) Six years ago, the World Bank and Turkey signed a
$600 million Agriculture Reform Implementation Loan. There
were three basic components to the program; establishment of
Direct Income Support, restructuring of Agricultural Sales
Cooperative Unions (ASCUs), and transition out of surplus
crop production. The World Bank is helping to set up the
infrastructure to facilitate farmer registration and
payments. While the overall goal of agricultural reform is
to replace crop-linked subsidy supports with direct income
support, the two components are still independent and
farmers who receive direct income support payments remain
eligible to receive supported price premiums. Direct income
payments, according to MARA, have increased from $900
million in 2001 to about $2 billion in 2005.
¶12. (SBU) The ASCU's are subject to restructuring and are
not expected to continue to offer support prices above
market prices. They are likely to announce procurement
prices, but due to a lack of funds and pressure from the
Treasury, will not be able to operate at a loss, i.e.,
procure above the market price. ASCU's - especially those
that currently have debt - are encouraged to liquidate
assets such as processing facilities and other activities.
Additionally, agricultural support prices, agricultural
credit, and fertilizer subsidies will be phased out. The
ASCU's will no longer be receiving subsidized loans.
Irrigation waterworks will also be privatized and handed
over to private water use associations. While many ASCUs
have limited their procurements in recent years, that has
been primarily due to market conditions that provided
farmers other alternatives.
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U.S. Exports to Turkey in 2005
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¶13. (SBU) Despite significant barriers, U.S. food and
agricultural exports to Turkey reached another record,
surpassing $1 billion in 2005. A portion of these exports,
however, especially meat, poultry and high-value items were
transshipped to other destinations, including Iraq, via
Turkey's free trade zones (approximately USD $100 million).
U.S. exports to the Mersin Free Trade Zone in Turkey are
expected to rise about 10 percent in 2006. U.S. exports of
soybeans, cotton, vegetable oils (excluding soybean oil),
feed and fodder, fruit and vegetable juices, tree nuts, pet
foods, and hardwood lumber to Turkey all reached record
levels in 2005.
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Comment:
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¶14. (SBU) Despite claims to the contrary, the GOT remains
heavily involved in Turkish agriculture often intervening in
the market through various means mainly to increase domestic
prices. Unfortunately, the GOT invariably intervenes at the
most inopportune times leading to excessive purchases and
higher governmental stocks. Often times the GOT is forced
to sell these excessive stocks on international markets at
prices below the initial purchase prices. At the same time,
the government tries to placate the large numbers of Turks
involved in agriculture for which alternative employment is
very limited. The implications for long-term EU
negotiations could be critical since the transition in the
rural community will be much more difficult.
WILSON