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How Turkey has built up its competitive textile industry

Turkey has, over the past decade, pushed up its cotton productivity by as much as 52 per cent to 1,370 kg per hectare from about 901 kg per hectare in 1992-93 and has created a a highly modernised textile industry which can effectively compete in the world markets.

While during this period its area under cotton increased from 6.37 lakh hectares to 7.21 lakh hectares, actual production nearly doubled from 5.74 lakh tonnes to 9.88 lakh tonnes, or nearly one million tonnes. Since its own textile industry has also grown apace Turkey’s cotton production is not enough to feed its strong textile industry. Its annual consumption of cotton which was around 6.76 lakh tonnes in 1992-93 reached nearly 12 lakh tonnes in 2002-03. It does export a small quantity of certain varieties of cotton. While its exports in 2002-03 are estimated at 30,000 tonnes, imports during the same year were placed around two tonnes. Turkey has freed both its exports and imports of cotton. Turkey’s textile and clothing industry enjoys quite a few advantage such as skilled labour, continuous modernisation of equipment, domestic cotton supply and proximity to Europe. It can supply textiles and clothing to European markets much more speedily than many other competitors can do. Thus Europe remains its main export market.

It has to be accepted that the Turkish textile industry has been in the process of continuous development for the past two decades. Even when several other countries put off modernisation, Turkey continued to import textile machinery annually worth about US $ 1.3 billion. This shows that its textile and clothing manufacturers have faith in their industry and have continued to build completely modern spinning and weaving capacities. Its current ring yarn capacity is placed at seven lakh tonnes and open-end cotton yarn capacity at 5.20 lakh tonnes. Of course, the modernisation programme slowed down a little in 2001 due to domestic, financial and economic problems, but has again gathered momentum.

Turkey is well aware of the importance of cotton production to its economy. It is ranked the fifth largest cotton producing and consuming country in the world. As many as three lakh farmers with their families are engaged in cotton farming. Annual value of cotton produced in the country is estimated at US $ 1.2 billion. Turkey’s annual exports of textile and clothing are placed around US $ 12 billion. In order to boost productivity of cotton, Turkey has introduced new cotton varieties, opened up new areas for cotton cultivation, and improved cultivation practices.

Turkey’s textile and clothing sectors account for nearly 10 per cent of the country’s GDP and 35 per cent of its export earnings. The sector provides about 2 million jobs.

Initially Turkey tried to push up its cotton production and productivity through price support policies implemented through Agricultural Sales Cooperative Unions (ASCUs). But that did not work. It then took up the Agricultural Reform Implementation Project supported by the World Bank.

Since June 2000, ASCUs are no longer expected to implement any price support measures on behalf of the government. They are required to be independent, financially autonomous and self-supporting organisations dedicated to serving their farmer members by selling and processing crops on their behalf, taking decisions according to market signals.

Turkey has also introduced, since 1999, the Commodities Market Development Project (CMDP). Under this, it is has set up seven commodity exchanges for various crops. It has introduced the warehouse receipt system thus enabling the trading in warehouse receipts in stead of commodity. It has also introduced new standards for various commodities so that trading in warehouse receipts can be extensively practised.

Recently, it has established a futures and options exchange company in Izmir. It will start with futures trading in cotton which will, thereafter, be extended to other crops.

Cotton research is another Turkey’s strong points. Its General Directorate of Cotton Research (GDCR) sets priorities for cotton research and allocates the necessary resources. It has nine cotton research institute under it. Most of the cotton research in the country is carried out by these institutes. Private sector also plays an important role in cotton research. It finance research activities carried out by various universities. Cotton research in Turkey is mostly concentrated on breeding and genetics. Researchers concentrate on developing new varieties suited to different cotton producing regions. Pesticides as well as pest managements are other areas on which researchers devote their attention. Cotton is generally harvested in Turkey by hand picking method, but mechanical harvesting is being tried in certain areas to avoid contamination.

- M D Dewani