Turkish farmers fear foreclosure as loan deferment period expires

As Turkey’s agriculture sector has 130 billion liras in loans, farmers have begun to hide tractors and other farming equipment in anticipation of foreclosures, following the end of the suspension of debt enforcement.

Friday April 02 2021 11:19 am

K. Murat Yıldız / Duvar English

Following the outbreak of the COVID-19 pandemic, traditional small and medium-size farms around Turkey were hit hard. From tea producers in the Black Sea city of Rize to cotton producers in the Southeast province of Şanlıurfa, many owed money to banks, especially the state farming bank Ziraat Bank and other institutions. As time passed, farm foreclosures by banks begun due to unpaid loans and credits.

130 billion lira in farmers debt

According to the Banking Regulation and Supervision Agency’s (BDDK) official data, farmers owed over 130 billion Turkish liras to banks as non-performing loans amounting to at least 5 billion liras as of December 2020.

In December 2020, the Agriculture and Forestry Minister Bekir Pakdemirli and the Agricultural Credit Cooperatives of Turkey (TTKK) announced that all foreclosures and debt enforcement proceedings against farmers will be postponed until March 31, 2021.

“As the Agricultural Credit Cooperatives, in order to reduce the negative effects of the COVID-19 pandemic on the agricultural sector, all foreclosure transactions and enforcement proceedings carried out for the collection of our institution's loan receivables will be stopped until 31.03.2021,” the statement read.

Moreover, the government promised farmers that their credit and loan-related problems would be solved before that date. However, no steps have been taken in that direction as of now, and farmers have started to fear that foreclosures and debt enforcements proceedings will continue. Anonymous sources told Duvar English that many farmers have started to hide their tractors and valuable equipment, fearing foreclosures.

Farmers struggle to pay their debts

“Farmers couldn’t pay their credits and loans in 2018 and 2019 because of high-interest rates. On top of that, in 2020 came the pandemic. As a result, the state farming bank Ziraat restructured farmers' loans and the TTKK, after the outcry of farmers, postponed foreclosures until March 31,” main opposition Republican People’s Party (CHP) deputy and Parliamentary Agriculture Commission member Ayhan Barut told Duvar English.

“At the end of 2020, the ruling party passed a law restructuring tax and credit debts, yet, despite promises, farmers were not included in that law. After a strong reaction from farmers, the minister announced the postponement of foreclosures until the end of March and promised that problems would be solved by then. Nothing has happened and now farmers are afraid,” Barut added.

The CHP asked the government not to take any interest from farmers on their existing loans and postpone payments for 5 years. All those calls went unanswered.

Promises not kept

“Today is March 31 and no legislation on the issue has been presented to parliament. Recently they restructured the debts of 173 pro-government companies worth 35 billion liras. Yet, they didn’t restructure the 8.5 billion lira debt of farmers to the TTKK, despite their promises,” Barut stated

Regarding how the farmers are feeling now that the deadline has passed, Barut concluded saying, “They are worried and waiting anxiously for developments. There is no public statement about the issue. Even if they would prepare and present a new law on this matter, it would take weeks if not months to bring it to the parliament floor.”

The government doesn’t abide by its own laws

“It was obvious that they wouldn’t fulfill their promises to farmers if you look at the ruling Justice and Development Party’s (AKP) track record. Farmers’ debt was around 5 billion liras when they came to power, now it is 130 billion liras. They announced support packages, but farmers have always been neglected,” Peoples’ Democratic Party (HDP) Mersin deputy and Parliamentary Agriculture Commission member Rıdvan Turan told Duvar English.

“According to an AKP-made law, 1 percent of the GDP has to be used to support farmers and agricultural production. They have never met this number. More than 20 billion liras in this year’s state budget supposedly has been allocated for this, but we know that won’t be the case.”

Another heavy blow to farmers: Fertilizer Prices

Meanwhile, as Turkey is facing one of its worse periods in its history in terms of food inflation and shortages of a large number of agricultural products, farmers who have been struggling to survive even before the COVID-19 pandemic have now been hit by a radical increase in fertilizer prices.

Experts point out that the cost of fertilizer has skyrocketed and increased as much as 90 percent.

Farmers were also hit severely by hikes in energy, seed, pesticide, transportation and gas prices related to the depreciation of the Turkish lira against the dollar and the global effects of the COVID-19 pandemic.

“The government made a 10 percent reduction in fertilizer prices, which has increased over 100 percent in the past year. What they are doing is putting a band-aid on a terminally ill cancer patient,” HDP deputy Turan concluded.