Minister of Agriculture, Mehdi Eker's comments on

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E.O. 12958: N/A
TAGS: ETRD EAGR PGOV PREL GR TU
SUBJECT: Minister of Agriculture, Mehdi Eker's comments on
Turkey's new agriculture policy and on the WTO rice case

Sensitive but Unclassified. Not for Internet Distribution.


1. (SBU) Summary. In a December 22 meeting, Minister of
Agriculture Mehdi Eker gave the Ambassador a general
overview of the new Turkish agriculture policy and commented
on the Turkish rice situation, in light of the current WTO
case. Both sides agreed that the best manner to resolve the
rice issue is through negotiations. End Summary.

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Minister's description of the new Turkish Agriculture Policy
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2. (SBU) Minister Eker informed the Ambassador that the GOT
has developed a national "Agriculture Strategy Plan," which
will become the new Agriculture Law in early 2006. The
purpose of establishing this new law is to set in place a
long-term agriculture policy for the country that is
independent of changes in government and populist
preferences. The intent of this law is to improve
agriculture productivity, the biggest problem in Turkish
agriculture due to the small size of Turkish farms. One way
the GOT will address this issue is to concentrate on land
consolidation and the establishment of large commercial
farms.


3. (SBU) As described by the Minister, the new Agriculture
law will move away from traditional Turkish price and import
support policies and move toward direct income payments,
deficiency payments, and policies that protect the
environment. It will also focus on research and rural
development projects, mainly in Southeast Turkey.

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Minister's Comments on Rice
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4. (SBU) Minister Eker stated that Turkey needs 560,000 MT
of rice annually to meet its domestic consumption demand.
He said that Turkey produces half or slightly more than half
of that and imports the rest. He calculated that 560,000
tons of milled rice is equivalent to 900,000 tons of paddy
rice. According to Turkish statistics, Turkey imported 98.9
percent of its needs from the United States between January
and September 2005.


5. (SBU) COMMENT: U.S. export statistics from 2005 will not
reflect the Turkish data that the Ministry quoted. In order
to circumvent the Turkish import regime and secure the best
prices, Turkish traders imported the rice from the United
States in 2004 and kept it in bonded warehouses until they
were allowed to bring it into the country officially with
import licenses in 2005.


6. (SBU) The Minister mentioned that there are 25,000 rice
producers in the country, all with very small production
areas and because of the small size of the lands, production
costs are high and they need assistance. He also pointed
out that the GOT reduced the import duty for paddy rice this
year from 34 percent to 20 percent.


7. (U) Ambassador expressed appreciation for the
Minister's comments. He said that we believe Turkey's
domestic purchase requirement and practice of denying import
licenses are unfair and violate the country's WTO
obligations. We are prepared to see the case through to a
conclusion, but would welcome a negotiated settlement
consistent with Turkey's obligations. He offered no comment
on Eker's remarks regarding paddy rice or the reported
suggestion that a deal on paddy rice might be sufficient to
resolve the matter. Ambassador added that if the case
proceeds, he would downplay it as a conflict between the
United States and Turkey, and note that we believe Turkey's
market protection practices violate its WTO commitments, and
highlight the WTO's role in adjudicating differences among
members. Eker agreed that it would be preferable to handle
this issue through negotiations. Ambassador Wilson proposed
the upcoming TIFA meetings as an early bilateral forum for
more discussion on this issue.

WILSON