Farmer in Turkey turns down $740,000 offer for outstanding wheat crop, amidst growing urban development surrounding the farmland
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In the face of mounting pressures, the Turkish government has taken steps to bolster the agriculture sector, allocating ₺24 billion ($589 million) for support in 2025. However, the sector has been grappling with several issues, including sharp declines in wheat production due to persistent drought, high inflation raising input costs for farmers, and disruptions in grain trade caused by geopolitical risks.
The most damaging frost in a decade, as described by Agriculture and Forestry Minister Ibrahim Yumakli, caused extensive damage to crop fields across Turkey. This is reflected in the producer price inflation in agriculture, which surged to an annual 50.31% in June, reflecting a widening gap between production costs and market prices.
Over the past 17 years, 12% of agricultural land in Bursa, amounting to 51,000 hectares, has been lost. Dr. Fevzi Cakmak, head of the Bursa branch of the Union of Chambers of Turkish Engineers and Architects, attributes the loss of farmland to rapid industrial growth, high inward migration, widespread zoning, and unlicensed construction.
The contraction of the agriculture sector in the first quarter of 2025, with its share of gross domestic product (GDP) dropping to 2.2%, is in contrast with the national economy, which grew 2% during the same period. Over ₺650 billion of the agricultural loans extended by Ziraat Bank have been done so under subsidized lending schemes to ease farmers' financial burden.
In response to these challenges, the Turkish government has implemented several measures. A strict wheat import ban was enforced during summer 2024 to protect domestic producers, relaxing to a 15% quota from October 2024. This ban, however, negatively affected flour exports and was expected to be eased in 2025 as per requests made by exporters to the Ministry of Agriculture and Forestry.
To counteract inflation and supply chain disruptions, the government has provided subsidies for fertilizers and seeds to support farmers in increasing domestic barley and other grain production. Additionally, government incentives encourage investment in agri-technology, value-added processing, logistics infrastructure such as rail and ports, and digital supply chain tools. These efforts aim to improve resilience amid global climate shocks and food security concerns.
Estimates by the Turkish Statistical Institute (TurkStat) forecast a 5.8% decline in wheat production in 2025, and overall grain output is expected to fall by 4.1% to 37.4 million tons. Despite these struggles, the strategic value of agriculture was recognized during the COVID-19 pandemic, but awareness quickly faded, according to Dr. Cakmak. Even unprocessed food prices, traditionally more stable, remained elevated, dipping only slightly to 25.8% in July. Non-performing loans in the agricultural sector rose 188% to ₺7.3 billion ($296.7 million), underlining deteriorating financial health.
President Recep Tayyip Erdogan announced in July that ₺18.5 billion of the allocated funds will be allocated for rural development through a combination of budgetary and international funding. The government aims to balance protection of domestic agriculture with easing trade restrictions and boosting productivity through subsidies and strategic investment to stabilize and eventually grow its agriculture sector in a challenging environment.
- The Turkish government has allocated ₺24 billion ($589 million) for agricultural support in 2025, aiming to strengthen the sector, despite ongoing challenges such as high inflation and geopolitical risks.
- Inflation in Turkey's agriculture sector saw a record high of 50.31% in June, a reflection of input cost increases due to high inflation and the widening gap between production costs and market prices.
- The contraction of the agriculture sector in the first quarter of 2025 was partially due to the loss of agricultural land in Bursa, estimated at 12% over the past 17 years and amounting to 51,000 hectares.
- On the positive side, the Turkish government has announced plans to allocate ₺18.5 billion of the agricultural funds for rural development, aiming to strike a balance between protecting domestic agriculture and promoting trade.
- As part of the government's efforts to tackle inflation and improve agricultural resilience, subsidies for fertilizers and seeds have been provided to increase domestic barley and grain production, and incentives encourage investment in agri-technology and infrastructure.
