The bitter end of Turkey’s state owned sugar

The bitter end of Turkey’s state owned sugar

With a call for tenders published February 21, the government announced that it would be selling 14 sugar factories belonging to the Turkey Sugar Factory Inc. This is not a new story. In the last seven years the attempted privatization process was interrupted twice; in 2011 by the State Council and 2012 by the High Council for Privatization. However, in November last year President Erdoğan held a confidential meeting with AKP MPs and told them that those factories were a burden to the state and would be sold.

This time the issue has attracted more attention due to allegations that the American food company Cargill, which is the leading figure of starch based sugar (SBS), is behind this recent decision. Cargill published a report in January this year, stating that the situation in Turkey where the most of the sugar production is publicly owned was the worst case scenario option and advised Turkey to privatize. In Cargill’s prediction Turkey would grow faster, the numbers of production, employment and export would raise, and ultimately the government would be able to collect higher revenues from sugar production taxes. The same report indicated that with privatization, the SBS production which is currently limited at a 10% market share in Turkey could be increased to 50%. Currently, the SBS production capacity of Cargill in Turkey is around 260.000 tons due to restrictive quotas. Following the sales, it should reach an expected 700.000 tons increase per year, which eventually will make Cargill owning the half of the market in Turkey.

Many objections were raised against the decision of the government. Some pointed to the fact that this move is a step for clearing the way for SBS production, which will only benefit Cargill. For example, CHP MP Veli Ağbaba argued that the decision of the government was directly linked to the Cargill report and the issue was discussed by President Erdoğan and USA Secretary of State Rex Tillerson, during his recent visit to Turkey; an allegation which was refuted by Cargill. Still, SBS is a highly debated product: Due to the immense amounts of fructose it contains, medical experts relate SBS with many health problems, foremost obesity and related disorders, and other chronic diseases including cancer, cardiac diseases and liver failure.

Opponents of the decision have also pointed out that selling of the factories will have detrimental effects on the situation of not only the workers at the factories but also on the producers of sugar beet. And this would have consequences for others crops as well. Sugar beet can by nature only be cultivated every four years, since it is a product which exploits the soil. Farmers rotate with other crops in the years between, selling the sugar beet for guaranteed prices to the factories. The guaranteed income from the sugar beet helps them to sustain the production of these other crops. 

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Deloris Laigos

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