Regoverning Markets Small-scale producers in modern agrifood markets Agrifood Sector Studies Restructuring of agrifood chains in Turkey: The produce sector (A) A. Ali Koç, Jean-Marie Codron, Yavuz Tekelioğlu, Sylvaine Lemeilleur, Selma Tozanli, Şafak Aksoy, Céline Bignebat, Rana Demirer, Nisa Mencet Akdeniz University, Antalya INRA UMR MOISA, Montpellier IHEAM-IAMM, Montpellier www.regoverningmarkets.org Restructuring of agrifood chains in Turkey: The produce Sector (A) Meso study Report Module 1 A. Ali Koç, Jean-Marie Codron, Yavuz Tekelíoğlu, Sylvaine Lemeilleur, Selma Tozanli Module 2 Şafak Aksoy, A. Ali Koç, Yavuz Tekelíoğlu, Céline Bignebat, Rana Demirer, Nisa Mencet Akdeniz University, Antalya, Turkey, INRA UMR MOISA, Montpellier, France CIHEAM-IAMM, Montpellier, France 2008 Regoverning Markets Regoverning Markets is a multi-partner collaborative research programme analysing the growing concentration in the processing and retail sectors of national and regional agrifood systems and its impacts on rural livelihoods and communities in middle- and low-income countries. The aim of the programme is to provide strategic advice and guidance to the public sector, agrifood chain actors, civil society organizations and development agencies on approaches that can anticipate and manage the impacts of the dynamic changes in local and regional markets. Agrifood Sector Studies These studies look at specific agrifood sectors within a country or region. Research studies have been carried out in China, India, Indonesia, Mexico, South Africa, Turkey, Poland and Zambia covering the horticulture, dairy and meat sectors. Part A of the studies describes the observed market restructuring along the chains. Part B explores the determinants of small-scale farmer inclusion in emerging modern markets. Using quantitative survey techniques, they explore the impacts on marketing choices of farmers, and implications for rural development. The studies were coordinated by: Jikun Huang, Center for Chinese Agricultural Policy (CCAP), China (contact [email protected]) Thomas Reardon, Michigan State University (MSU), USA (contact: [email protected]) Other publication series from the Regoverning Markets programme Innovative Practice This series of country case studies provides examples of specific innovation in connecting small-scale producers with dynamic markets at local or regional level. Based on significant fieldwork activities, the studies focus on four drivers of innovation: public policy principles, private business models, collective action strategies by small-scale farmers, and intervention strategies and methods of development agencies. The studies highlight policy lessons and working methods to guide public and private actors. Innovative Policy These are short studies addressing a specific policy innovation in the public or private sector that improves the conditions for small-scale producers to access dynamic markets at national, regional and global level. Country Studies These provide a summary of market changes taking place at national level within key high-value agrifood commodity chains. Policy Briefs These are short policy-focused summaries targeted at each stakeholder group. Further information and publications from the Regoverning Markets programme are available at: www.regoverningmarkets.org. Authors Rana Demirer, A. Ali Koç and Yavuz Tekelíoğlu Akdeniz University, Department of Economics, Antalya, Turkey Céline Bignebat, Jean-Marie Codron, Sylvaine Lemeilleur INRA UMR MOISA, Centre de Recherche de Montpellier, France Şafak Aksoy Akdeniz University, Department of Business Administration, Antalya, Turkey Selma Tozanli CIHEAM-Institut Agronomique Méditerranéen de Montpellier IAMM, France Nisa Mencet Akdeniz University, Department of Agricultural Economics, Antalya, Turkey Corresponding author: Prof Ali KOC ([email protected]) Acknowledgments Funding for this work was provided by: UK Department for International Development (DFID) International Development Research Centre (IDRC), Ottawa, Canada ICCO, Netherlands Cordaid, Netherlands Canadian International Development Agency (CIDA) US Agency for International Development (USAID). The views expressed in this paper are not necessarily those of the funding agencies. Citation: Koç, A.A., J-M. Codron, Y. Tekelíoğlu, S. Lemeilleur, S. Tozanli, S. Aksoy, C. Bignebat, R. Demirer, N. Mencet (2007), Restructuring of agrifood chains in Turkey, Regoverning Markets Agrifood Sector Studies (A), IIED, London. Permissions: The material in this report may be reproduced for non-commercial purposes provided full credit is given to the authors and the Regoverning Markets programme. Published by: Sustainable Markets Group International Institute for Environment and Development (IIED) 3 Endsleigh Street London WC1H 0DD www.iied.org Tel: +44(0)20 7388 2117, email: [email protected] Cover design: smith+bell Table of Contents Summary .................................................................................................................................. 1 List of Tables ............................................................................................................................ 6 List of Figures........................................................................................................................... 6 1 Introduction...................................................................................................................... 7 1.1 The role of agriculture in the national economy......................................... 7 1.2 The role of horticulture (FFV)........................................................................ 7 1.3 Objectives and key research questions......................................................... 8 1.4 Organization of the report ............................................................................. 8 2 Changes in the national food system: restructuring food retailing ........................ 9 2.1 Major changes in the food retailing system and drivers of change ......... 9 2.1.1 Size of the food retailing market ............................................................... 9 2.1.2 Evolution of the retail sector in favour of large retailers..................... 10 2.1.3 Consolidation of large supermarket chains in large cities .................. 11 2.1.4 Still a weak concentration ratio in the modern food retailing sector. 14 2.1.5 Increasing pressure from discounters .................................................... 15 2.2 Drivers for retail restructuring .................................................................... 16 2.3 Supply-side drivers....................................................................................... 18 3 Changes in the national food system: restructuring the tomato sub-sector (fresh and processed) ....................................................................................................................... 22 3.1 Main features of the FFV and tomato sub-sectors.................................... 22 3.1.1 Evolution of the overall FV sub-sector................................................... 22 3.2 Changes and drivers in the fresh tomato sub-sector................................ 23 3.2.1 Major changes in the fresh tomato sub-sector....................................... 23 3.2.2 Drivers of major changes in the fresh tomato sub-sector .................... 24 3.2.3 Standards.................................................................................................... 26 3.2.4 Wholesale.................................................................................................... 27 3.2.5 Retail level .................................................................................................. 30 3.2.6 Export level ................................................................................................ 33 3.2.7 Major changes in the tomato-processing sub-sector ............................ 38 4 Market meso-analysis based on participatory rural appraisals (PRAs)................ 40 4.1 Methodology.................................................................................................. 40 4.1.1 Selection of study sites.............................................................................. 40 4.2 Results of the PRAs ....................................................................................... 45 4.2.1 Study sites................................................................................................... 45 5 Implications for the microstudy.................................................................................. 55 i 5.1 Conclusions .................................................................................................... 55 5.2 Implications for further studies................................................................... 55 List of References................................................................................................................... 58 Appendix 1. The relative cost of the commissioners (agents) and cooperatives ......... 61 Appendix 2: Physical and market advantages and disadvantages (by village)........... 63 ii Summary This report examines the supply chain restructuring and trends in the food market in Turkey, in particular in the fresh produce sector, to reveal the driving factors behind this restructuring (demand side, supply side, policies, and institutions) and the threats (opportunities) to (for) the exclusion (inclusion) of small scale farmers in modern marketing