Turkey: Livestock Farming Faces Risk of Bankruptcy

Turkey although a farming country by origin has been experiencing some major difficulties concerning supply and prices in the red meat market, for quite a while now.

The retail red meat prices have gone out of control and beyond the buying power of average citizen. Thanks to the giant investments in the poultry sector in the recent decade, the abundant supply of white meat at reasonably suitable prices has made up for the shortcoming in red meat supply to contribute positively to the healthy nutrition of Turkish people.

Farmers have been facing the greatest difficulties so far, due to importation of red meat at much more competitive prices. Consequently slaughtering has almost stopped in the country as processed meat producers have focused their demand on imported meat. This situation has brought farmers to the point of bankruptcy because they cannot find a place to have their animals slaughtered, even at loss.

Farmers have to pay almost 200 TL monthly to feed animals which have grown enough to be slaughtered but cannot be done. This continuous expense adds up to farmers’ loss each and every day bringing them to the edge of bankruptcy. It is noteworthy to mention at this point that there are about 2 million animals in the country.

Big companies such as Banvit, Koç, Saray Halı have foreseen this danger and stopped buying new animals. Companies that carried on with their activities are at a very critical financial point now.

This being the case, the government has had to give those farmers a hand and they have done so.

The Ministry has decided to provide a subsidy of  TL 300 per animal to support farmers and encourage slaughtering.  However, it has also been imposed that the farmers have to replace slaughtered animals with new ones to be able to benefit from said incentive which has obviously prevented many farmers to take advantage of this opportunity. They simply would not have the finance to comply to this condition.

Farmers who have their animals slaughtered will be eligible to get 300 liras per animal regardless if they buy new animals to replace slaughtered ones. Farmers will be paid 300 liras for upto 250 animals slaughtered, 150 liras from 250 to 500 animals and 75 liras for over 500 animals. However, as there is hardly any slaughtering at the moment farmers cannot make use of this incentive. This application is designed to cover January 1st – July 1st.

Last year, EBK (Meat and Fish Institute) paid 16 liras per kg for animals they bought (to slaughter) from farmers. Whereas said establishment is not paying more than 12,5 liras this year. On the contrary to the decrease in price offered by the establishment, the feed price has gone up by 40-50% since last year.

The farmers believe if the government does not take any urgent actions to limit importation of red meat, or increase the rate of duty at importation to 60-70 %,  the producers/farmers in the sectors could be very close to the edge. In such a case it would not be fortune telling to guess that livestock farming in Turkey would come to an end.

The most ideal situation based on the opinions of farmers in the sector would be to have a composition of domestic animals and imported ones, 50% each.

The current situation however is that the only winners today are importers of cheap red meat, which is not a very promising picture for Turkish husbandry, at all

09.05.2011

Editor
BUSINESS TURKEY TODAY