Facilitating Smallholder Farmers’ Market Access
In the OIC Member Countries
85
The role of agribusiness exports
Thus far the discussion has focused on primary agricultural products, but another aspect
of structural change is the emerging importance of agro-industry as an economy grows.
Agricultural goods are a key input for these businesses, and these businesses add value to
those goods in various forms. For highly processed goods, value is added through the
manufacturing process and the addition of other inputs. For fresh fruit and vegetables,
value is added in the form of quality and food safety assurances as well as prompt, reliable
delivery.
As discussed, many goods produced by agribusinesses in Turkey had full access to the EU
market, owing to the very early decision under the Association Agreement to treat
processed agricultural goods as manufactured goods. Other provisions of the Customs
Union facilitated investments between the two economies. In addition, the Cost of Doing
Business Survey ranks Turkey high among OIEC member countries, suggesting a
supportive business environment. (Recall Table 13). eports recent data on FDI
in the food, beverage, and tobacco industries. In 2012, companies outside of Turkey
invested over US$ 2 billion in Turkey’s agribusiness sector. Only Brazil attracted more
investors.
TABLE 17: FOREIGN DIRECT INVESTMENT IN FOOD, BEVERAGE, AND TOBACCO INDUSTRIES,
TURKEY AND SELECTED COUNTRIES
Rank Country
FDI
(US$
millions)
Reporting
year
FDI stock
(US$
millions)
Reporting
year
1 Brazil 5,443 2010 82,162 2010
2 Turkey 2,137 2012 7,759 2011
3 Argentina 991 2011 5,259 2011
4
Russian
Federation
602 2010 6,323 2010
5 Ireland 553 2012 5,563 2012
6 Mexico 470 2012
7 Chile 448 2012 2,960 2012
8 Kazakhstan 288 2012 779 2012
9 Thailand 220 2011 5,928 2012
Source: ITC 2014.
Exports of the kinds of basic agricultural goods that are not included in the Customs Union
have been growing rapidly, as noted
is based on a survey of agribusinesses that export both basic agricultural goods
as well as the processed agricultural goods that are part of the Customs Union. The
number of such firms exporting to MENA has grown along with the volume of exports. A
large portion of those firms export either fresh fruit and vegetables or related processed
goods.