Impact of Globalization on Türkiye's Agricultural Trade

The scarcity of natural resources continues to grow as a critical global issue, exacerbating inequality and food insecurity across regions. In 2023, an estimated 828 million people suffered from hunger, while almost 30% of the global population endured some form of food insecurity when malnutrition is included (FAO & WHO, 2023). These alarming figures reflect not only resource shortages but also deep structural imbalances in the global food system. Unequal access to water, land, and agricultural inputs disproportionately affect populations in developing and least-developed countries, where rising temperatures, erratic rainfall, and soil degradation have reduced crop productivity and undermined food sovereignty.

To level the playing field, the World Trade Organization (WTO) introduced trade reforms through the Uruguay Round Agreement on Agriculture (1994), which called for phased reductions in agricultural subsidies. Developed countries were required to reduce subsidies within five years, developing countries within ten, and least developed countries within fifteen. The goal was to reduce trade-distorting support and allow developing economies fairer access to global markets. However, the agreement’s impact has been limited. Major agricultural exporters like the United States and the European Union continue to provide an estimated $600 billion annually in subsidies, using mechanisms like direct payments, insurance schemes, and export incentives that circumvent WTO rules (OECD, 2023).

These persistent subsidies allow developed countries to flood global markets with artificially cheap food, undermining farmers in poorer nations and perpetuating cycles of dependency. As a result, many developing countries are unable to compete, invest in sustainable agriculture, or protect their own food security. The global imbalance in agricultural trade and support systems not only distorts markets but also exacerbates poverty, rural underdevelopment, and ecological strain. Addressing this inequity requires renewed international commitment to transparent trade, fair subsidy reforms, and sustainable investment in food systems for all.

Türkiye’s Agricultural Dilemma in a Globalized Economy

Türkiye, recognized as one of the top ten global agricultural producers, is grappling with significant structural challenges in adapting to the competitive pressures of a globalized economy, particularly under the regulatory frameworks of the World Trade Organization (WTO). A central issue lies in Türkiye’s subsidy structure, where most of the its agricultural support mechanisms are categorized under the WTO’s "Red Box", defined as trade-distorting subsidies. In contrast, the European Union (EU) effectively utilizes "Green Box" supports, which include non-trade-distorting assistance such as environmental programs and rural development funding. This disparity places Türkiye at a competitive disadvantage in global markets where WTO compliance is increasingly critical (WTO, 2023).

Productivity gaps further underscore Türkiye’s agricultural dilemma. In the livestock sector, the average number of animals per farm is only 3.9 in Türkiye, compared to 38.7 in the EU (TÜİK, 2023). Similarly, milk yields are significantly lower, 2,000 kg per cow annually in Türkiye versus 5,500 kg in the EU (Eurostat, 2023). Meat production also lags, with average carcass weights of 170 kg in Türkiye compared to 281 kg in the EU (TÜİK, 2023). These figures reveal inefficiencies that hinder Türkiye’s competitiveness and economic returns in international trade.

Additionally, trade imbalances persist despite the sector's export potential. Agriculture comprises about 11% of Türkiye’s total exports, yet the country is highly reliant on imports for value-added and processed agricultural goods, with 90% sourced from the EU (TIM, 2023). This dependence on imported agro-products not only undermines domestic food processing industries but also widens the trade deficit. Addressing these structural shortcomings requires reforming Türkiye’s subsidy system, investing in productivity-enhancing technologies, and supporting local agro-industrial capacity to ensure competitiveness and sustainability in the global agricultural market.

Global Agricultural Trade Trends

The global agricultural trade landscape has experienced notable changes over the past few decades. Between 1985 and 2004, the value of agro-exports surged dramatically, increasing from $123 billion to $393 billion. However, despite this impressive growth in the absolute value of agricultural exports, their share of global trade decreased from 12% to 7%, highlighting the growing diversification of global trade beyond agriculture (World Bank, 2023). A closer look at the distribution of these exports reveals a concentration in the hands of a few nations. In fact, just 20 countries account for a staggering 73% of global agricultural exports, demonstrating the dominance of key players in the agricultural export market (WTO, 2023). One significant trend within this shift is the growing importance of processed foods. Processed food exports have been growing at an annual rate of 8.5%, underscoring the increasing focus on value-added agricultural products as opposed to raw commodities. This growth is indicative of a broader value chain disparity, where countries that can process agricultural products add more value and capture higher returns compared to those that only export raw materials (ITC, 2023). These trends suggest that to stay competitive in the global market, countries must increasingly focus on both expanding their export base and enhancing the value added to their agricultural products. As demand for processed foods rises and agricultural markets become more concentrated, nations that can innovate and improve their production processes will be best positioned to succeed in the evolving global agricultural trade environment. However, this growth is not without challenges, as it also requires significant shifts in policy, infrastructure, and production methods to support a sustainable and competitive agricultural sector that can meet the changing demands of the global market.

Conclusion

Globalization has redefined the landscape of agricultural trade, creating both opportunities and obstacles for countries like Türkiye. While global market integration has encouraged export growth and innovation, it has also exposed deep disparities in subsidy structures, productivity levels, and value chain competitiveness. Türkiye’s reliance on trade-distorting subsidies, low farm-level efficiency, and dependence on imported processed foods leaves it vulnerable in a system dominated by well-subsidized and technologically advanced economies.

The WTO's reforms have not fully addressed these global imbalances, as developed nations continue to use loopholes to maintain their dominance, undermining the competitiveness of developing economies. Moreover, global trade is increasingly driven by processed and value-added products, where Türkiye lags due to insufficient investment in agri-processing infrastructure and policy support. To remain competitive, Türkiye must realign its agricultural strategy through structural reforms, including transitioning toward “Green Box” compliant subsidies, improving productivity through technology adoption, and supporting domestic agri-business value chains. These changes must also address environmental sustainability and social equity to ensure long-term resilience. The pathway forward lies in crafting policies that not only respond to global trade rules but also enhance national food security, rural livelihoods, and ecological balance. Only through such a comprehensive and forward-looking approach can Türkiye thrive in the increasingly complex and competitive global agricultural economy.

References: FAO; WTO; TÜİK; OECD; EC; WHO; TIM; ITC

Please note that the views expressed in this article are of the author and do not necessarily reflect the views or policies of any organization.

The writer is affiliated with the Department of Agricultural Economics, Selcuk University, Konya-Türkiye and can be reached at mdirek@selcuk.edu.tr

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