Turkish Prime Minister Binali Yildirim first announced details about the program on Nov. 14. The project is expected to cover a new allocation system for agricultural supports for crops and livestock, with Turkey divided into 941 agricultural basins based on climate and soil to subsidize specific crops for each zone.
“In the scope of the new policy, all subsidy payments will be given in two installments per year, which aims to reduce bureaucracy for farmers, who formerly received payments in many installments per year,” the FAS noted in the report. “Also, the Turkish government will pay half the cost of diesel. The contribution for diesel will be calculated according to which crops are grown.”
“In order to reduce TMO’s warehousing burden, the Turkish government is encouraging the construction of licensed warehouses,” The FAS said. “Three million metric tons in capacity of new licensed warehouses will be finished by 2018. It is expected that TMO will not procure crops if they are not on the subsidized crop list for their specific agricultural basin. That amendment of TMO’s role will probably affect planting decisions of farmers who have been planting corn and taking advantage of TMO’s procurement price.”
Corn production is expected to be affected by the new system, the FAS said, with forecasts from market sources calling for a 30% decrease in planting area for corn in the 2017 marketing year due to reductions in planted areas where corn is not on the subsidized list. The FAS said the government of Turkey is encouraging production of other crops, including cotton, oilseeds, pulses and wheat, with expectations that production of the aforementioned crops will increase in the coming year in place of the reduced corn plantings.
“Next year, TMO will not procure corn in almost every basin in the drought-prone regions of Konya, Mardin and Sanliurfa — an area where there was about 2 million tonnes of corn harvested in previous years,” the report noted. “In order to make up for this potential reduction in domestic corn production, Turkey may need to import more feed. In recent years, Turkish corn imports have primarily been sourced from the Black Sea region.”