1. ‘HAZELNUT’

2. Why hazelnut? Important source of a large number of family farms Makes up 71% of world product 20% of total agricultural exports In 1950’s, the leader in foreign currency earnings, still at significant level Largest exporter of the world Play an important role in determining world prices

3. The Turkish hazelnut market has encountered production surpluses that can not be reduced by domestic consumption or foreign trade. Possible solutions to this problem include restricting hazelnut planted areas in lowlands, reducing price support and increasing domestic and foreign demand by price and product differentiation, and seeking new markets abroad.

4. AIM OF THE STUDY Importance of hazelnut for Turkish economy Historical, current and future policy implementations

5. WHY IS TURKEY LEADER IN THE WORLD? The largest and the most suitable ecologic areas The best quality of hazelnut cultivate in temperate climate zone in Eastern Black Sea region

6. Turkey ranks the first in hazelnut export, as well as in the hazelnut production. During the years between 2001 and 2004, averagely 87.2% of world hazelnut export in type of was carried out by Turkey, Italy, USA and Spain. 70.6% of total export belongs to Turkey. Turkey, Italy and Spain have decreased but USA and other countries have increased their shares in hazelnut export in the last three decades. GENERAL MARKET INFORMATION:

7. The total hazelnut production in Turkey, Italy, USA and Spain is approximately 720476 tones (90.4% of world hazelnut production). Among these mentioned countries, Turkey is the major producer country with 67% share, followed by Italy with 16.5% share, USA with 3.9% share and Spain with 3.0% share. Among hazelnut producing countries, USA has the highest hazelnut yield Countries consuming hazelnut mostly are Switzerland and Germany

8. Exports Trend in Selected Food and Agricultural Products ($ million)

9. Quantity(Tons)Value (1000 USD) TURKISH HAZELNUT EXPORT (PROCESSED AND UNPROCESSED) BY YEAR

10. Source: State Institute of Statistics, Ministry of Agriculture, State Planning Organization EXPORTSDOMESTIC CONSUMPTION COUNTRY Average 1983-86 Average 1989-92 Average 1995-99 Average 1983-86 Average 1989-92 Average 1995-99 Turkey268.450298.376380.75077.30063.00088.000 Italy67.52073.88053.86038.60063.000110.714 Spain12.63011.1257.8259.10014.00016.825 USA5.5006.79418.47410.00016.00021.821 TOTAL354.100390.175460.910135.000156.000237.360 Sources: Germain, 1990; Tous and Romero, 1997; INCGermain, 1990Tous and Romero, 1997 Total Production in Turkey

11. POLICIES ON HAZELNUT Major policies; Price support Restrictions on planted areas Payment for alternative crops ‘Direct income support’

12. DIRECT INCOME SUPPORT Subsidies are provided to the producers on the basis of the commodities produced The Government will invest the money obtained thorough savings from the support price system, to the construction of infrastructures such as schools, roads and hospitals.

13. Small farmers are concerned that removal of the support price increase dependence on the private sector for marketing. Their perceptions and attitudes toward the new reform are not favorable Medium size farmers have more or less the same perception and attitude toward the reforms. However, their negative reactions were not as strong as the small farmers were. Large farmers were very familiar with the problems induced by existing system of support prices and the burden it imposes on the state budget and have a favorable perception and attitude of the reforms AFTER ALL;

14. CONCLUSION Turkey needs to make a long-term production planning to make use of this advantage which is provided by hazelnut precedence over other countries Turkey should raise her market share in other countries; apart from EU Methods providing yield escalation should be supported. Because, hazelnut yield of Turkey is very low when compared with USA and Italy. Low yield is the basic problem of hazelnut production in Turkey

15. Turkey should give up the price and purchase intervention carried out by means of Fiskobirlik. High quality products appropriate for foreign markets should be produced improving the processing industry in Turkey Yield and quality should be risen up and costs of producers should be reduced in Turkey.

16. A FUTURE PERSPECTIVE OF THE HAZELNUT

17. The cost of production is not decreasing. And so Turkey does not procure competitive advantage from this total production. Besides it has become a burden for Turkey in recent years. By improving the hazel nut processing industry Turkey must export not only as a natural agricultural product but also high value added product

18. Some needs while determining the hazel nut polices are: A system should be determined which ensure to take the supply overage from the market. Thus the export of the Turkey will be stabilized Price, marketing and other long term polices should not be omitted. These policies should be focused on especially for the other countries to increase export

19. An institution should be founded which will determine the hazelnut production crop, to determine other data for hazelnut production The hazelnut stock market and licensed storage business should be developed for having a good hazelnut market in the next years

20. To assimilate the stability in the hazelnut market: Because the foreign demand elasticity of the hazelnut price is low, there is not an effective linkage between the price and export amount. Thus the hazelnut prices should be determined within a price range which is stable and aim to maximize the foreign exchange income of our country.

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