Coup in Turkey: impact on the organic industry

Turkey is an important supplier of organic products. Many west European organic companies maintain close business relations with Turkey. The attempted coup and its consequences could therefore have far-reaching implications for the organic sector. Manufacturers and the trade should  ensure that they are well prepared.

On 15 July, the Turkish military endeavoured to topple President Recep Tayyip Erdogan. However, the putsch failed and Erdogan is now exploiting the attempted coup to consolidate his power. The political situation in Turkey is unstable and the economy is under pressure.

Important trade partner for the wholefood sector

Turkey is an important trade partner for the organic sector and we find numerous products on the shelves that originate wholly or partly from there. So the industry would do well to observe closely what is going on in Turkey both to ensure supplies and for ethical reasons.

According to the data of the Bundesverband Großhandel, Außenhandel, Dienstleistungen (BGA, German Association for Trade and Exports), Turkey exports food valued at around €14.4bn per year to Germany. ”For Germany and the European Union, Turkey is one of the most important sources of organic products,”, says BGA spokesman André Schwarz. The land area producing organic goods expanded in ten years from 210,000 to almost 900,000 hectares. Production rose from 13,000 to 72,000 tonnes a year.

Especially nuts and dried fruit are in demand

Turkey supplies nuts and dried fruit like raisins, figs and apricots as well as meat, cheese and honey. Fresh foods include apricots, pomegranates and oranges, explains Hilmar Hilger, spokesman for the Bundesverband Naturkost Naturwaren (BNN, German Association for Natural and Organic Foods and Goods): ”Although Italy and Spain play a much bigger role than Turkey in the case of fresh fruit and vegetables.”

Business beyond its borders is vital because the country needs money. Turkey is heavily indebted and is currently importing much more than it is exporting. The inflation rate is 7.6 % instead of the 5 % it would like to see. For rating agencies like Standard & Poor's and Fitch, government bonds are junk bonds or just above. Over the next five years there is a 15.3 % probability of the country running out of money on the basis of the costs of credit default insurance.

After the attempted coup, Erdogan has retaliated in a way that is worrying and creating uncertaintly in the minds of many people, especially in western democracies. He has had tens of thousands arrested,  and scientists have been banned from leaving the country. Human rights organisations like Amnesty International and Human Rights Watch are warning that the situation is becoming critical. There is even talk of introducing the death penalty.

Doing business is more difficult under these circumstances

The president of the Deutsche Industrie- und Handelskammertag (DIHK), Eric Schweitzer, has already warned that the current circumstances in Turkey make it more difficult to do business: ”The prospects are not so good, and an outflow of capital has already begun as a result of the developments we've seen.“ All this could lead to the economic problems in Turkey becoming much worse. The already unstable currency, the lira, has become even more vulnerable, and this makes it more expensive to hedge against currency risks. Schweitzer's demand in order not to jeopardise business relations with Turkey: "It's important they don't attempt to undermine the rule of law in Turkey.“

The situation regarding human rights could indeed impact on companies in the organic industry. Many a customer would think twice about buying products from Turkey if it were to introduce the death penalty. In view of the unclear situation, Amnesty International is unwilling to say anything at the moment about the ethical implications for business. Representatives of the organic industry with business contacts in Turkey are also silent on this matter because they are afraid of creating problems for their business partners with the people in power.

At this point in time, BNN has not observed any consequences for the organic industry. Hilger's recommendation: “In a situation in which there's only supposition about consequences, we think the best approach is to maintain our good and in most cases longstanding trade relations with organic farming in Turkey instead of involving ourselves in speculation. If those customers who are sensitive to the human rights issue decide, on account of the political situation, not to buy products from Turkey, producers and retailers would have to switch to other countries to source their goods. However, sometimes some well founded arguments can help to  change the mood. Retailers would do well to think about it – now.

All photos by Karin Heinze

Video: The Eco Centre Narköy - biodiversity and hospitality

A couple of hours drive to the east of Istanbul, an exemplary organic hotel and an intact world of nature attract citizens,  tourists and volunteers on the organic farm. Hopefully they can continue in this time of turmoil.