“A recipe for the sector emerged in the Final Declaration of the “Extended Sector Meeting” of the Association of Central Anatolian Flour Industrialists (OAUSD), which brought together all the stakeholders of the sector. Very important suggestions are attracting attention in the final declaration, in which many subjects are included in detail such as increasing wheat cultivation areas, breeding new seeds suitable for climate change, premium supports for products, consolidation of agricultural lands, Türkiye’s flour export leadership, the diversity of export markets, TMO’s wheat stock and flour regulation.”
The giant meeting of the grain and flour industry held in Konya reassured the industry. The “Sectoral Outlook and Expectations After the 2022 Harvest Season” meeting, organized within the scope of the Extended Industrial Meeting of the Association of Central Anatolian Flour Industrialists and supported by the Ministry of Agriculture and Forestry, Turkish Grain Board (TMO) and the Turkish Flour Industrialists’ Federation (TFIF) X-rayed Türkiye’s grain harvest, so to speak.
The risks threatening food security, what needs to be done to increase wheat production in Turkey and the future of the Turkish flour industry were discussed. The grain industry, which has been experiencing hard times around the world due to the climate crisis, pandemic and the war that has been going on for months between Russia and Ukraine, was reassured with the measures taken by the government. In particular, TMO General Manager Ahmet Güldal, who followed the meeting with interest from the beginning to the end, took notes and gave the message “We are with you” to the sector, assured the sector representatives.
Güldal stated that they met with all the stakeholders of the sector frequently in this challenging process and gave a successful test thanks to the measures they took in line with their demands and suggestions, and noted that after a very successful harvest season, they created a large stock especially in the domestic market and they took measures to make the sector comfortable in the coming period. Ahmet Güldal’s statement that the wheat purchase price, which is above the world prices, and premium support they put into practice this year will continue in the coming years was interpreted as the farmer will come back to wheat production.
Three successive presidents of the Turkish Flour Industrialists’ Federation came together at the same time sitting on the panelist chair at the session “Current Situation of the Industry and Global Problems”, which was one of the most popular sessions of the meeting. Erhan Özmen, one of the first presidents of TFIF, his successor Eren Günhan Ulusoy and Haluk Tezcan, the president-in-office, made sobering evaluations regarding the sector. The three presidents made recommendations for the sector and drew attention to the measures that the government should take.
TFIF President Haluk Tezcan said, “As flour industrialists, we have been the export leader in the world for the last 9 years, with the support of our state and related institutions. While performing our product supply in the domestic market without any problems, we increased our exports to 652 million dollars in the first half of 2022, with a 33% increase compared to the same period of 2021, and we have reached the highest January-June export figure ever.
Erhan Özmen explained the population growth of the countries that have a say in the global wheat production since 1980 and the developments in wheat production amounts with figures. He stated that the population of Türkiye was 44 million in 1980, and this figure reached 86 million in 2022 with a 95% increase. During the same period, he noted that wheat production was 13 million tons in 1980, and that in 2022, wheat production is around 20 million tons with a 54% increase. Another issue that Erhan Özmen drew attention to was the decrease in wheat cultivation areas. Özmen reminded that wheat cultivation areas, which were 9 m ha in 1980, decreased to 6.8 m ha in 2022.
Eren Günhan Ulusoy, who was the President of TFIF for two terms, said that export markets are very precious and these gains must not be lost. Ulusoy expressed that the Turkish flour industrialists attract attention in the world with their products and technology and noted that the industry must continue to grow by heading towards to more value-added products.
A recipe for the sector emerged in the Final Declaration of the “Extended Sector Meeting” of the Association of Central Anatolian Flour Industrialists (OAUSD), which brought together all the stakeholders of the sector. Very important suggestions are attracting attention in the final declaration, in which many subjects are included in detail such as increasing wheat cultivation areas, breeding new seeds suitable for climate change, premium supports for products, consolidation of agricultural lands, Türkiye’s flour export leadership, the diversity of export markets, TMO’s wheat stock and flour regulation. The declaration included the following remarks:
During the production season, TMO purchasing policies were evaluated by the speakers. The general opinion was that the price offered by the TMO for wheat, and the successive the update and the second price for mwith the premium practice, was a realistic price compatible with world prices. It was revealed that this price was welcomed by the farmer, the trader and the industrialist and it was stated that the determined price was close to the free market level.
It was evaluated that TMO’s ability to fulfill its duty of regulating the market in such a sensitive period depends on its ability to stock sufficiently, and that it could only fulfill its duty of regulating the markets properly only if it has 4-5 million tons in the stock, considering the current extraordinary conditions. In addition, the importance of reassuring the relevant sectors and having the power to prevent speculations by making stocks at this level with the purchasing policy implemented this year were highlighted.
In the sessions, it was frequently underlined that the sustainability of wheat production depends on the wheat producer’s earning sufficient income from this activity and it was stated that for years wheat prices have been suppressed due to bread, which has been the staple food of consumers. It turns out that this practice means subsidization of bread through living off of the farmer, restricting the income of wheat farmer, reducing the competitiveness of wheat against competing products, and a gradual decrease in cultivation areas, particularly in irrigated areas. It was stated that the current and the last seasons, TMO started to implement a different method, “sale of wheat at a discount to flour factories which undertake to sell flour at a certain low price, a flour regulation”, so that the bread is directly subsidized by TMO, not through living off of the farmer. It was anticipated that the advantageous price practice applied to wheat this year and the bread subsidy other than could be reflected in the coming years in the form of an increase in wheat cultivation areas and contribute to the sustainability of wheat production. However, considering the concern that such practices may hinder the development of the private sector in the long run, the necessity of developing alternative methods was also emphasized.
Although Türkiye’s population is around 85 million, considering the immigrants that are being hosted due to the negativities in our nearby geography, the aid given to the countries that lost productivity, and the tourists which increased at a record level, the necessity of dealing with a population of over 100 million has been mentioned. In a population of this level, around 20 million tons of wheat is required for domestic consumption. Although wheat production is at a level that can meet domestic consumption in many years as was in this production year, it still stands at a critical limit. In the dry years, it may fall short of meeting the domestic consumption. One of the important factors determining the development of the food industry is to be able to continuously supply raw materials of sufficient and appropriate quality. The pandemic, Russia-Ukraine war, climate change and global risks create important problems in accessing food raw materials. Therefore, in order to be safe from global risks, it is necessary to increase wheat production, which is a strategic product, and to ensure sustainability. For this, it was noted that it is essential to increase the wheat cultivation areas, which have decreased to 7 million hectares, to 8 million hectares through a gradual increase.
It was stated that, in this production year, indirect subsidization of bread to some extent other than through the farmer, but through the allocation of wheat at affordable prices (flour regulation), realistic price determination in world prices, premium application and price update will contribute to this, but additional measures will be needed. In this context, it was considered important to increase the certified seed, fertilizer and diesel fuel supports in wheat and to reach 171 TRY per decare. However, this figure was 116 TRY with the temporary support of 50 TRY last year. It is understood from these statements that the temporary support has been removed. It is recommended that this support be made permanent and added to 171 TRY and increased to 221 TRY per decare. It is also important that the product support, which is 10 cents per kg, is increased to 25 cents.
Which crops to grow in irrigated areas is decided according to the course of the year, and often options unsuitable in terms of soil and water resources reveal, and uneconomical choices may come to the table. A production planning that takes into account the soil, water resources, the environment and the principle of economy cannot be made in real terms. It was suggested that the quadruple cropping system (in which wheat farming is obligatory in at least one year) in accordance with scientific, technical and economic principles must be put into practice by combining it with agricultural supports. It was pointed out that this system would create a production plan not only for wheat but also for different strategic products, as well as providing a significant contribution to the protection of soil and water resources.
Since every drop of water is valuable and directly related to food safety, the projects of bringing water from the outer basins to the water-deficient basins by protecting the ecosystem in the basins must be reconsidered. Those that were previously not feasible in terms of cost must be re-evaluated with the alternative of benefiting from renewable energy sources, taking into account the food prices and the difficulty in their availability in the process. As important as the steps taken by our country towards energy independence, the steps to be taken to ensure the sustainability and safety of food are equally important. For this reason, it is necessary to act faster and more decisively in project design and welding and channel every drop of water into agriculture. It was evaluated that these practices, along with the price policy, support model and quadruple cropping, could positively reflect on the increase in wheat cultivation areas and therefore on production. It was also stated that it would be a positive argument in reducing fallow areas.
In the presentations in which it was stated that the self-sufficiency of a country in a sector in the world is decided by its equality in the foreign trade balance or its excess in favor of exports, it was emphasized that although the government tried to interpret self-sufficiency as the absence of any import in that sector from time to time, this wasn’t valid in scientific terminology. From this point of view, since Türkiye is a country with a foreign trade surplus in Agricultural and Food Products, it can be defined as self-sufficient in this sector. The same issue is also in question in Foreign Trade of Wheat and Products, which has foreign trade surplus. Moreover, although wheat production in our country generally meets its domestic consumption, except for extreme years, a certain amount of wheat is imported every year in order to process wheat and export it as a finished product within the scope of the Inward Processing Regime (With the fact that it is the first country in the world in flour and bulgur export and the second country in pasta export, 7-8 million tons of wheat is imported providing it is exported). However, considering the global crises, it was emphasized that it is clear that it is necessary to work on meeting this within the country, and that this target seems to be feasible to a certain extent with the other proposals in the final declaration for increasing the wheat cultivation areas.
With the lightening of the pandemic burden and the effect of the fertile harvest period, world wheat prices, which was already in a decline trend, started to decline more rapidly with the Grain Corridor deal. As a matter of fact, bread wheat prices, which had increased to 450 dollars per ton, decreased to 320 dollars. Similar downward trends are observed in some other food products. It has been evaluated that it has positive contributions to the agricultural sector and flour sector of our country in terms of raw material supply at affordable prices. Türkiye’s role on a global scale in the Grain Corridor deal was highlighted and the following information was given: “This situation is a decisive diplomatic victory of Turkey, which took place in front of the eyes of the world, and a seal on world food security. It is an initiative that will relieve the world about staple foods and will give a breathe a sigh of relief. It is a beacon of hope offered to societies suffering from famine in Africa. This deal may bring other programs to the agenda, perhaps by evolving into an energy corridor following the grain corridor, and paving the way for a development that will save the world from the energy shortage. It is likely that it will lead to a permanent ceasefire and trigger diplomatic efforts.”
It was emphasized that the number of licensed warehouse operators in Türkiye reached 164 and the warehouse capacity reached 8.6 m t. It was stated that this development provides different supports and exemptions to producers, licensed warehouse investors and investors, as well as it brought many benefits such as the registration of products, stock control and tracking, ensuring the healthy preservation of products by being in qualified warehouses, maintaining quality, the ease of analysis and classification by quality in meeting commercial value and demands, opportunity to be sold electronically through TURİB (Türkiye Commodity Exchange), avoidance of unnecessary transportation, the farmer’s ability to sell his product at the price it deserves and to access financing under favorable conditions.
The satisfaction that the cooperation of the Ministry of Commerce, the relevant units of the Ministry of Agriculture and Forestry and the sector regarding licensed warehouses provides the opportunity to take quick decisions and implement the legislation and regulations was mentioned. It was stated that many regulations were put into practice in this scope.
Considering that the active capacity of the licensed Warehouse Operators was only 8.6 m t although they have obtained permits of around 16 m t, the necessity of rapidly increasing the active capacities to 10 million tons in the first place was emphasized.
Considering that a limited number of products are stored in licensed warehouses, it was stated that the product variety must be increased in line with the increasing warehouse capacity.
The significance of performing analysis in licensed warehousing in a qualified and independent manner was mentioned, and it was recommended to update the Authorized Classifier fee schedule, considering the fact that the Authorized Classifier analysis fee is collected through MKS (Central Registration System) and the fact that the fee scale’s fixedness over the years has brought about significant problems. In addition, it was requested to update the fee scales for the support and exemptions applied for licensed warehouses and to extend their duration.
It was stated that a periodic convening of the committee, which will consist of all sector stakeholders regarding all issues related to licensed warehouses and the arrangements to be made, will contribute to healthy development.
It was determined that the developments in TÜRİB continue at a pace in parallel with the developments in licensed warehousing, and it was pointed out that the targets related to the intermediary system in the ELUS (Electronic Bill of Commodity) market and TÜRİB Futures Exchange are placed on a healthy basis with the evaluation of all stakeholders. The issue of Agricultural Lighting Platform has been assessed as a remarkable development, and it was underlined that it would serve the system with an institutional structure and qualified human resources.
It was stated that the high number of varieties in wheat is an issue that is frequently emphasized. It has been evaluated that this is due to the diversity in the topographic structure of our country, such as soil structure, changes in altitude, slope and vector, temperature, precipitation amount and distribution, air humidity differences, and changes in irrigation facilities, and it has been stated that the development of varieties that will adapt to these differences will continue. From this point of view, it was emphasized that there is a need for studies on accepting products by classifying them according to variety groups in each color scale instead of only variety in storage and purchases.
It was underlined that agricultural production is the scene of the intensive use of technology, and our country must keep up with this development with its human resources and innovative industrialists, and that we need to go faster in smart technologies through prioritization and organizational developments.
In addition, it was emphasized that the social projects that will prevent the emptying of the villages and aging of the population therein, which plays a leading role in agricultural production, should be put into practice effectively.
As many people have recently expressed, it has been pointed out that the shift of plains and agricultural lands, which are very fertile for field crops, to perennial horticultural production has reached a remarkable level. It was emphasized that although these products are valuable and most of them are exported, they cause shrinkage of cultivation areas of the strategic products such as cereals, oil crops and grain legumes. The significance of working on measures to stop the trend in this regard was emphasized.
It has been underlined that the problem of idle capacity in the flour industry has been going on for years and that a thrilling solution couldn’t have been found, and that it was expectated that the problem will continue also in the coming years. It was highlighted that the relevant institutions must spend intensive working hours to solve this problem, and that the short-term solution for now is through reaching more foreign markets.
The flour industry in Turkey has followed a constantly developing and renewing course, mostly from grandfather to grandchild and this is the fact why it has such a widespread sales network in the world and ranks first in flour export. The fact that it analyzes the world well, determines the type of flour demanded by each geography and produces accordingly is the proof of the innovative aspect of the flour industry. It was emphasized that the continuation of this development aspect without skipping any geographical area is necessary for the continuity of its power.
It was mentioned that analyzing today and tomorrow for the flour industry to develop new products by concentrating its innovative aspect on the field of bakery products is a must. Emphasizing the importance of benefiting from the academic experience of universities in the development of these products, attention was drawn to systemizing the university-industry cooperation.