1. COTTON MARKET IN TURKEY

2. CONTENT I. Introduction II. General View Of The Market Cotton Production in Turkey Cotton Production in Turkey Cotton Consumption in Turkey Cotton Consumption in Turkey Cotton Import and Export in Turkey Cotton Import and Export in Turkey III. Policies General Description Of Current Policies General Description Of Current Policies Organization of Cotton Market Organization of Cotton Market IV. Policy Implications and Conclusion

3. INTRODUCTION Turkey is one of the eight biggest countries which produce the 80% of cotton in the world. From the Turkey’s side, cotton as a raw material is really important for our main industries especially for the textile and ready-to-wear clothing sectors. Turkey is one of the eight biggest countries which produce the 80% of cotton in the world. From the Turkey’s side, cotton as a raw material is really important for our main industries especially for the textile and ready-to-wear clothing sectors. Textile is the most important related industry with cotton. Both cotton and textile are the most subjected to different government interventions in the world. Textile is the most important related industry with cotton. Both cotton and textile are the most subjected to different government interventions in the world.

4. COTTON PRODUCTION IN TURKEY INTERNATIONAL POSITION INTERNATIONAL POSITION Source: Anonymous, 1999-2003a.

5. COTTON PRODUCTION IN TURKEY COTTON PLANTATION AND PRODUCTION COTTON PLANTATION AND PRODUCTION Source: Anonymous 2001 and Anonymous 2003a

6. COTTON PRODUCTION IN TURKEY COTTON PLANTATIONS ACCORDING TO REGIONS COTTON PLANTATIONS ACCORDING TO REGIONS Source: Anonymous, 2003a and Özüdoğru, 2002.

7. COTTON PRODUCTION ACCORDING TO REGIONS COTTON PRODUCTION ACCORDING TO REGIONS COTTON PRODUCTION IN TURKEY Source: Anonymous, 2003a and Özüdoğru, 2002.

8. THE MAIN FACTORS FOR COTTON CONSUMPTION THE MAIN FACTORS FOR COTTON CONSUMPTION Improving textile and confection sector Improving textile and confection sector Rapidly increasing world population Rapidly increasing world population Increasing GDP per capita levels Increasing GDP per capita levels Price of Synthetic Fiber and its consumption Price of Synthetic Fiber and its consumption COTTON CONSUMPTION IN TURKEY

9. Although Turkey is one of the biggest cotton producer in the world, it covers its consumption needs by import. The main reason of that is rapidly improving textile sector and opportunity to buy cheaper cotton from foreign countries than the domestic and credit possibilities especially from U.S. Although Turkey is one of the biggest cotton producer in the world, it covers its consumption needs by import. The main reason of that is rapidly improving textile sector and opportunity to buy cheaper cotton from foreign countries than the domestic and credit possibilities especially from U.S. COTTON CONSUMPTION IN TURKEY

10. Source: TUIK

11. COTTON IMPORT AND EXPORT TURKEY’S COTTON IMPORT ACCORDING TO COUNTRIES (000/tons) TURKEY’S COTTON IMPORT ACCORDING TO COUNTRIES (000/tons)

12. TURKEY’S COTTON EXPORT ACCORDING TO COUNTRIES (000/tons) TURKEY’S COTTON EXPORT ACCORDING TO COUNTRIES (000/tons) COTTON IMPORT AND EXPORT

13. III. POLICIES In our country, In our country, Aegean Aegean Çukurova Çukurova Antalya Antalya Southeast Anatolian Southeast Anatolian are the main regions for the cotton production.

14. In the European Union, especially Spain and Greece produce approximately 350 thousands ton cotton. And in these countries the high support rates make the production costs lower according to Turkey. But, the limited cotton production in the EU and limited amount of cotton that comes from the EU to Turkey does not affect the cotton producers negatively in our country. In the European Union, especially Spain and Greece produce approximately 350 thousands ton cotton. And in these countries the high support rates make the production costs lower according to Turkey. But, the limited cotton production in the EU and limited amount of cotton that comes from the EU to Turkey does not affect the cotton producers negatively in our country.

15. In the production of cotton one of the most important factors is labor power and in our country approximately 6 million people are working on the cottons’ plantations for their own living. In the production of cotton one of the most important factors is labor power and in our country approximately 6 million people are working on the cottons’ plantations for their own living. In the world, the cotton is cultivated in many countries and because of this reason international institutions have many studies and rules for this product. In the world, the cotton is cultivated in many countries and because of this reason international institutions have many studies and rules for this product. But, although in 29 OECD countries there have been studies for 13 products, the cotton has not been one of them. Consequently, in OECD countries the calculations for supports to cotton producers or taxation of consumers related to cotton have not been done. But, although in 29 OECD countries there have been studies for 13 products, the cotton has not been one of them. Consequently, in OECD countries the calculations for supports to cotton producers or taxation of consumers related to cotton have not been done.

16. Current Policies When we look at the domestic support mechanism in favor of the cotton production in Turkey, there are three different support schemes: When we look at the domestic support mechanism in favor of the cotton production in Turkey, there are three different support schemes: 1. Support Premium 2. Direct Income Support 3. Diesel and Chemical Fertilizer Support There are no guaranteed; There are no guaranteed; -minimum prices, -national production quantities for the cotton producers.

17. 1. Support Premium; Income support payment per kg has been provided to the cotton producer under the name of Support Premium. Domestic and foreign market prices, costs of the producers and budgetary means have been taken into consideration in determination of the amount of the support. 1. Support Premium; Income support payment per kg has been provided to the cotton producer under the name of Support Premium. Domestic and foreign market prices, costs of the producers and budgetary means have been taken into consideration in determination of the amount of the support. 2. Direct Income Support; Within the scope of the Direct Income Support system, income support payment has been provided to the cotton producers as well as other products up to 50 hectares in accordance with the By-law on National Farmer Registration System. 2. Direct Income Support; Within the scope of the Direct Income Support system, income support payment has been provided to the cotton producers as well as other products up to 50 hectares in accordance with the By-law on National Farmer Registration System. 3. Diesel and Fertilizer Support; Diesel and Fertilizer Support have been provided to the cotton producers 3. Diesel and Fertilizer Support; Diesel and Fertilizer Support have been provided to the cotton producers

18. In case of the determination of an unfair support payment, payments made are recovered with its interest from the farmers who have benefited from the payment. Natural and legal person who forge the documents or certificates, which lead to unfair payment, are also successively bound for the amounts, which will be recovered. In case of the determination of an unfair support payment, payments made are recovered with its interest from the farmers who have benefited from the payment. Natural and legal person who forge the documents or certificates, which lead to unfair payment, are also successively bound for the amounts, which will be recovered.

21. Organization of the Market Cotton is purchased by the cooperatives and ASCUs, ginning plants and traders. Almost all of the cotton producers have been organized within the framework of the 89 agriculture sales cooperatives and 4 Unions. These institutions have important roles in the domestic trade of cotton. Agriculture Sales Cooperatives and ASCUs (namely Tariş Pamuk Birliği, Çukobirlik, Antbirlik and GAP Birlik) purchase approximately 20% of the total cotton production in Turkey. Cotton is purchased by the cooperatives and ASCUs, ginning plants and traders. Almost all of the cotton producers have been organized within the framework of the 89 agriculture sales cooperatives and 4 Unions. These institutions have important roles in the domestic trade of cotton. Agriculture Sales Cooperatives and ASCUs (namely Tariş Pamuk Birliği, Çukobirlik, Antbirlik and GAP Birlik) purchase approximately 20% of the total cotton production in Turkey.

23. IV.POLICY IMPLICATIONS AND CONCLUSION When we consider the cotton data in Turkey, while cotton production has shown a trend of reasonable increase, cotton consumption also has displayed increasing behavior. When we consider the cotton data in Turkey, while cotton production has shown a trend of reasonable increase, cotton consumption also has displayed increasing behavior. With the significant investments in textile and confection sectors, the cotton production witnessed an accelerated increase from 1950 to 1973. With the significant investments in textile and confection sectors, the cotton production witnessed an accelerated increase from 1950 to 1973. When we look at the 1989-1991 periods, there was not any price support mechanism, neither on trade restrictions nor exports and imports of cotton. When we look at the 1989-1991 periods, there was not any price support mechanism, neither on trade restrictions nor exports and imports of cotton.

24. In the beginning of 1990s, the Turkish government returned to the support price mechanism with the decrease of world cotton prices. But, this mechanism did not provide sufficient increase in cotton production because of several reasons. In the beginning of 1990s, the Turkish government returned to the support price mechanism with the decrease of world cotton prices. But, this mechanism did not provide sufficient increase in cotton production because of several reasons. Firstly, the level of support prices set was not adequate in comparison to the supports given in some other countries. Firstly, the level of support prices set was not adequate in comparison to the supports given in some other countries. Secondly, the support price system was implemented through the agricultural sales cooperatives unions (ASCUs), which procured roughly 1/6 to1/3 of the total crop, the remaining quantity being left to private sector procurements. Secondly, the support price system was implemented through the agricultural sales cooperatives unions (ASCUs), which procured roughly 1/6 to1/3 of the total crop, the remaining quantity being left to private sector procurements.

25. As a result, according to Turkey’s conditions, the cotton prices in the world is still lower and the cost of production as some countries continue to subsidize their cotton industries is well below. At this situation, as many other cotton producing countries, Turkey’s cotton production sector meets with difficulties and remains under increased pressure. As a result, according to Turkey’s conditions, the cotton prices in the world is still lower and the cost of production as some countries continue to subsidize their cotton industries is well below. At this situation, as many other cotton producing countries, Turkey’s cotton production sector meets with difficulties and remains under increased pressure.

26. THANKS FOR YOUR ATTENTION Burcu-Ahmet