domingo, 16 de agosto de 2015

#10 The Turkish potential

A new leader?
Our fifth stop was in Turkey, a beautiful country of 75.6 million inhabitants and a history strongly linked to agriculture. This corresponds to approximately 10% of the gross fixed capital formation (GFCF) of the country, and represents 25% of jobs. The main Turkish agricultural markets are, in random order: fruits and vegetables, animal feed, livestock and dairy industry. Demand for food in the country grew at impressive 14% per year from 2007 to 2014, and expectations until 2017 are of 6% per year. Its exports to Europe, Middle East and Africa (EMEA) expanded about five times between 2000 and 2012, which resulted in a wide range of investments directed to the development of agribusiness and food industry in that decade and in the present.
The government talks about being positioned among the top five countries in global agribusiness by 2023 via, mainly, tax security, low cost workforce and competitive financing to foreign capital directed to the development of the domestic industry. I came to the country with this question in mind... How close are they from this ambitious goal?
Our host in the country was Louis Chirnside, for years a Nuffield contributor and tomato producer in Australia. We traveled to the Gallipoli peninsula, in honor of the 100th anniversary of the ANZAC Day, celebrated on the 25th of April, and to the cities of Canakkale, Bursa and Istanbul.
The Turkish natural landscape is one of the nicest I have ever witnessed, and the opportunity to make the trip by car, with brief stops at villages along the way, talking to residents (in my best Turkish) and trying the local food, was extremely pleasurable.
Here I'll also talk about the country in events – not days – and hope to be able to express the best way possible my perception of what we experienced and companies we visited.
The first and great visit happened to Merko, largest processor and exporter from the food industry in Turkey, with tomato as the raw material. The company produces tomato paste and extract for industrial use.
Jim in one of Merko's greenhouses
Merko has contracts with about 300 producers, and tomatoes are grown on more than 20.0 thousand hectares, with a record production of 240.0 thousand tons in 2008, performance never again repeated thanks to the climate conditions of the region. All that is produced is directed to exports (to Japan, mainly).
The most interesting thing about visiting Merko was, for me, the clear differentiation of the existing technological barriers in agriculture. The company's structure is amazing: modernized, standardized and hygienic. All possible optimization factors in the industrial process were implemented, leading it to a great performance. By questioning the group about what still stands, however, as a challenge to growth, the answer was the unpredictability of production in the field.
Man can control the entire manufacturing process, accelerate steps, reproduce climatic conditions indoors, automate 100% of its production, and in the field he can develop transgenic seeds, treat the soil and spray plants with substances that will facilitate their development, but never cease to be completely dependent to the natural conditions surrounding agricultural cultivation. That's fascinating. Although we do our part, in the agricultural sector that doesn’t mean guarantee of success. In my opinion, there is beauty in this unpredictability. I don’t know many industries as challenging as this one I work with.
As an example, the tomato is a very delicate fruit and difficult to grow. Farmers have been dealing with excessive rainfall in recent years, which enhances the proliferation of diseases in the field, and when there is too much sun the fruit suffers impacts in color, possibly being rejected by buyers for being out of the required standards.
The company works in partnership with the same families producers for decades, and the question of succession does not seem to be at the center of Merko concerns. According to directors, the country is currently going through a renewed interest in agricultural production. The question of continuing the difficult task of managing a farm does not seem to be a problem for the Turkish people. Traditionalism takes care of succession, consequently watching for the future of family farming in the country.
We were also at the dairy farm Feyz Süt. The company takes care of more than 1.0 thousand milking cows, which produce impressive 12.0 thousand liters/cow/year, while the national average is 4.0 thousand liters/cow/year, and the top performance producers hit 8.5 thousand liters/cow/year. The CEO, Sencer Solakoglu, talked to us about the challenges of producing scale when the priority is the individual and personalized treatment to each animal, trying to balance the two factors (which are not necessarily exclusive) and to derive the maximum income from this combination.
In addition, Sencer talked about the current situation of the dairy industry in Turkey, where 82% of the dairy business establishments have a herd of five cows or less. Producers deal with the failure of public actions to combat foot and mouth disease (FMD) and others, which affect the development of small enterprises. These producers therefore have to use their own resources to protect their business (plant health measures such as vaccines, in-feed medication and etc.), which contributes to delay the implementation of innovative and sophisticated technology in the production system, since investments are directed to the maintenance of problems, which, in theory, are of public order responsibility.
Milking parlor at Feyz Süt
At the Australian Embassy in Turkey we spoke with Sinan Ogun, director of sustainability at Red Rock Minerals, and coordinator at Zirve University. Sinan also explored the obstacles in the introduction of new practices in the Turkish agriculture, in which innovation bumps in the difficult triad relationship between academia, government and farmers.
There is a great emotional and conservative issue that slows development opportunities in the sector: producers don’t trust the public authority, and the academia doesn’t follow the new technologies released around the world (not being cohesive, either, to the private sector). This impasse, however, comes from a small barrier – coexistence and collaborative research – which generates high and unjustified costs.
Sinan works on the technological integration with farmers, so that they become familiar with new practices that may transform the Turkish agriculture and really explore a great source of resources and productive potential, promoting the country internationally and transforming their competitiveness.
On the question at the beginning, and in my limited and partial perspective, Turkey still has a long way to the starry top 5 global agribusiness. This is a country with great agricultural capacity, favorable climate, fertile soil and a story that was outlined by the development of agriculture, but the disconnection between government, producers and companies very distance that goal, especially if we think that 2023 is not a so far future.
Anyway, we need Turkey. It is in everyone's interest to be developed, exploring the most of their resources sustainably and with a collective scope. And it is in my interest that that happens while preserving its tradition and natural landscape, so unique.

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