A Study of the Cotton Sector of Turkey: Implications for US Cotton Exports

Turkey is the second biggest importer of cotton from the U.S. after China (FAOSTAT). The cotton production in Turkey is relatively meager, in 2012 an estimated 420,000 hectares were expected to yield around 2.9 million bales. Investment in irrigation and infrastructure, particularly to build dams and irrigation channels in the Southeastern Anatolian region are expected to lead to significant increases in cotton acreage. However domestic production is expected to be affected by insect pests such as budworm and bollworm which are a problem for cotton producers, particularly in the Aegean and Cukurova regions along with government restrictions on aerial pesticide spraying and prohibitions on planting of Bt cotton.

In this background, the objective of this paper is to assess the system of cotton production and marketing in Turkey and to assess the competitiveness of Turkey cotton producers and the potential implications for US cotton exporters. The focus will be on developing an estimate of costs of production with a view towards developing a representative farm model for Turkish cotton production and examine the effects of changes in critical variables on farm level profitability. The paper will analyze the scenario of accession of Turkey into European Union, and thereby the impact of Common Agricultural Policy (CAP) on cotton sector in Turkey. Along with more support payments that the Turkish cotton farmers might be getting, there might be a cut back on some fuel and fertilizer subsidies that they are presently getting.