TURKISH AGRICULTURAL MACHINERY MARKET

Prof.Dr.Bülent EKER

beker@nku.edu.tr

2008

Turkey is a country with a population of 65 million and has a surface area of 77 million hectare. 1/3 of its area, this means 27 Million hectare, is agricultural area.

44% of the population lives in the country. The yield taken from the unit area is low;

about 2200 kg/ha for wheat and barley and 4000 kg/ ha for maize.

Turkey is one of the few countries of the world which is self-sufficient in food.

At present Turkey is the largest producer and exporter of agricultural products in the Near East and North Africa.

In fact, Turkey has traditionally been described as the world's food storehouse by many analysts.

Such a huge agricultural sector has resulted in a strong agricultural machinery sector in Turkey.

Sector is described as tractors and agricultural machinery according to the classification in European Union. 11,000 employees are employed in the sector and 20% of them work in production of tractors and 80% work in production of agricultural machinery.

On the other hand, 75% of monetary production value for 100 units is produced in tractors and 25% is produced in agricultural machinery.

Nowadays the number of tractors approaches to one million and 85% of it is a medium powered tractor having the power of 35 - 60 Hp.

Seven foundations produce tractors in the country but UZEL and NEW HOLLAND TRAKMAK firms perform the main production.

In tractor production, native contribution portion has reached 80-85% and the imported parts are the parts whose production in the country is not economical.

In tractor sector although there is a capacity of 100,000 pieces/ year, capacity utilization rate decreased to 10-20 % level in the last years.

There are over 1000 manufacturers producing equipment in the country.

They produce about 500 versions of 122 different agricultural machines.

Most of them are small-scale family enterprises employing 1-10 employees.

The capacity utilization rate is about 25% although there is a founded capacity of 1,000,000 pieces/year.

Manufacturers desire to work with a foreign partner. However, this desire is in the form of joint production

and joint marketing. Manufacturers don't have the desire of working as a

distributor of a foreign partner. The reasons are; foreign agricultural machinery have

the prices which are above10 the purchasing power of the farmer and farmers have worries about finding the spare parts in time and / or obtaining them at high prices.

THE CHARACTERISTICS OF THE AGRICULTURALMECHANIZATION IN TURKEY

Turkey has a population of 65 million. Its surface area is 77 million hectare. This population is 17% of the total

population of EU and the surface area is 25% of EU.

Approximately 1/3 of Turkish land, i.e. 27 million ha. is agricultural area.

THE CHARACTERISTICS OF THE AGRICULTURALMECHANIZATION IN TURKEY

The total agricultural area of the countries,which constitute EU, is 149 million ha.

In other words, Turkish agricultural area is 18% of European agricultural area

In Turkey, 44% of the population lives in the country.

This ratio appears as 4% in EU.

Agricultural Statistics Summary

According to the last existed data, the distribution of agricultural land and forest area within the country is; 38.7% is sown area, 44.0% is forest area, 10.2 % is fallow land, 5.4% is fruit orchards – olive groves –vineyards and 1.7% is vegetable gardens.

These proportions have remained same not having any considerable changes for the last 10 years.

GENERAL INFORMATION

Cereals are in the first sequence in agricultural production. Wheat,barley and corn are the main productions of the cereals.

Wheat cultivation occupies 9.4, barley 3.6 and corn 5.55 million ha.

TRACTORS

As considering the present data in Turkey, the results obtained from the numerical examination of agricultural instruments and machines are as follows:

The number of tractors is 941,835. The number of two-wheel tractors and track-

laying tractors is negligible in this number.

Four-wheel tractors constitute the main part of the tractor park.

The number of tractors having 35-50 Hp is 446,541 and having 50 Hp is 383,424 in the number of four-wheel tractors.

However, it is seen that the number of tractors having the power of 50 Hp or more increased according to the evaluation on tractor powers.

THE MANUFACTURERS OF TRACTORS · NEW HOLLAND TRAKMAK MOTOSAN · UZEL · TÜMOSAN · TRAKSAN · T.Z.D.K. · HEMA

Personnel employment status in tractor manufacturing industry

NEW HOLLAND TRAKMAK and UZEL supply the biggest portionof in country tractor demand and the whole exportation.

According to the records of Automotive Manufacturers Association (OSD) NEW HOLLAND TRAKMAK has the capacity of 35,000 tractors/year and UZEL has 30,000 tractors/year.

COMBINE HARVESTER

Combine harvesters have been produced with John Deere licence since 1968 in Turkey.

The factory has a production capacity of 1200 pieces per year

AGRICULTURAL MACHINERY AND EQUIPMENT GENERAL INFORMATION The production of agricultural machinery has

a background of more than 50 years in Turkey. In this period, three generations have grown. The first generation was the ones who deal

with reparation and during this time simple system plough and tractor-trailer production was dominant.

With the second generation manufacturing gained importance and reparation became factorisation.

Young people who are mostly graduated from university and having foreign languages and computer knowledge form the third generation.

However, in family foundations these young people have no chance to make decisions.

THE MANUFACTURERS OF AGRICULTURALMACHINERY AND EQUIPMENT

Most of the agricultural machinery-manufacturing firms in Turkey are small-scale family foundations.

These are the foundations, which don't have sufficient qualified staff and equipment to perform research,development and application except for some medium-scaled foundations.

Ministry of Agriculture and Rural Affairs collects the data related to agricultural machinery manufacturing firms all over the country every year with an inventory study and publishes these data.

According to this study,122 different agricultural machines are produced.

And the number of firms operating is mentioned as 1,022.

A total of 10,890 employees work in these firms.

In other words,there are approximately 10 employees per firm.

Established capacity, unit production and capacityutilisation rates of the some of the agricultural machinery

IRRIGATION EQUIPMENT

GENERAL INFORMATION The area, which can be irrigated, is 8.5 million

hectares in Turkey. 4 million hectares of this area is irrigated at present. General Directorate of Water Services (DS), General

Directorate of Rural Services (KHGM) and the self-resources of the manufacturers supply the irrigation.

When the Southeast Anatolian Project (GAP) is applied completely,1.7 million hectares will be irrigated, too and the total irrigated area will be over 6 million hectares.

THE MANUFACTURERS OF IRRIGATIONEQUIPMENT

There are 89 firms, which manufacture the pumps and motor-pumps used in agricultural irrigation in our country.

When the distribution of these firms according to the provinces is examined, it is seen that there are 31

firms in Istanbul, 19 firms in Konya, 13 firms in zmir and 7 firms in Ankara.

In other words 70 of 89 firms of the country are in 4 provinces.

ALARKO CARRIER, LAYNE BOWLER, ÖZSOY, TURBOSAN are the leading motor-pump manufacturers among these firms.

CAPACITY IN USE

The 89 firms, which produce pumps and motor-pumps in the country, have the capacity of 987,290 pumps with various powers and capacities.

The weight of the pumping systems, which are produced by these firms, is 4,798 tons.

122 firms manufacture the pipes and their connections used in irrigation.

The present capacity of pipes is 5,292,443 pieces with 18,866,598 metres length and their weight is 660,355 tons

EXPORTING

On the basis of new values compiled by Foreign Trade Ministry, there are 90 agricultural machine exporting firms exporting to 97 countries.

One of the interesting point lies on the fact that those manufacturers also at the same time, generate export of plenty of various machine spare parts and accessories.

Overall export volume will rise up when their volumes are added to the overall export volume.

When the data are examined it will be seen that some of the countries are selected as the target countries for export.

On country base respective order relied on the numbers of exporting firms will be as France, Morocco, Greece, Bulgaria, Syria, USA, Azerbaijan, Egypt, Romania, Sudan. Major markets on tractor based; USA, Italy, Mexico and Republic of S.Africa.

If our country take share in Iraq market most export is likely to be generated to that country. Sector representatives carrying out mutual contacts from many countries including Uzbekistan, Azerbaijan, Zimbabwe declared that we possess high quality agricultural machines but 2-3 times cheaper than their similar European versions.

In the sector until present now domestic market’s potential to meet supply frustrated both manufacturers and the matter of foreign advertisement.

From now on, we should rapidly pay attention to foreign advertisement.

There plenty of new countries and markets convenient for the expansion of our export market.

Two related matters we need to consider carefully are expanding in those markets before the involvement of our Italian, German and Spanish colleagues and preventing unprofitable competitions which can possibly degenerate the image of Turkish Products.

AIMS

Quality is another aim of the sector, together with exports, and it surely supports exports. Many of the agrimachinery manufacturers which have exports to the EU have affixed the CE Mark to their products.

Agricultural machinery manufacturers are aware of the importance of ISO series total quality certificates. Most of the manufacturers are conducting programs for these certificates.

CONCLUSION AND SUGGESTIONS Consequently, pertaining to developments in

recent years, it is very convenient to point out that manufacturing capacity of agricultural machine manufacture is very high and based on suitable developments in quality and standards they are able to compete with the similar machines manufactured in Europe.

Even though by cooperation and mergers held by advanced manufacturers in Turkey and some of the well known manufacturers in western countries high technology made agricultural machines are produced in more convenient economical conditions.

It mustn’t be ignored that importance given to the mentioned industrial sector will provide significant support also for machine industry, primarily for the agricultural machine manufacturing sector.