Hazelnut farmers backed Posted: Saturday, September 16, 2006
Turkey's state grain office TMO has signed a preliminary deal to borrow $400 million from international banks to buy thousands of tonnes of hazelnuts from farmers demanding government help because of low market prices.
Turkey's Black Sea region produces most of the world's hazelnuts. Protests at low prices by tens of thousands of farmers has prompted the government to buy hazelnuts for the first time in the country's history, a year before elections.
Agriculture Minister Mehdi Eker said the TMO would pay 4 lira ($2.73) per kilo of benchmark Giresun hazelnuts.
Last year average market prices were around 7 lira per kilo but have fallen to around 2.5 lira this year.
TMO general director Ismail Kemaloglu said the TMO could buy between 50,000-100,000 tonnes of hazelnuts. A crop of around 650,000 tonnes is expected this year.
The price disappointed farmers.
'This price pleased European importers and this country's brokers but not farmers,' the Union of Turkish Agriculture Chambers (TZOB) said in a statement.
Some economists are worried that the loans could damage shaky fiscal balances by adding to the losses of state companies paid by the Turkish Treasury and trigger a warning from the International Monetary Fund, with which Turkey has a $10 billion standby accord.
Eker said the TMO's hazelnut purchases would be funded by asset-backed international loans and rejected worries about extra spending.
'There is no need to worry and hesitate on this ... This is nothing to do with the Treasury or the IMF,' he said.
Kemaloglu said he hoped the TMO could sell the hazelnuts it buys without incurring losses.Reuters