Importance of Agricultural Cooperatives in Agricultural Financing in Turkey

Abstract

It is known fact that the first added value was obtained from the agricultural economy in the history. Accumulation obtained from there was combined with the with steam power and thus created excess supply. Accordingly, excess supply in an economy brought trade activities. The development of commer cial activities resulted in the development of money and financial instruments representing money. In short, advances caused by agriculture on a micro scale made significant contributions to the transformation and development of the macro structure. The microeconomic actors of the countries, which could not achieve this transformation in the past and had structural problems, also did not develop. Especially the failure to establish the necessary structure and institutions for the agricultural sector and its employees negatively affects both the sector and the farmers. In other words, the incomes of farmers who produce agricultural products with low supply elasticity may be negatively affected during the con juncture. While this situation not only negatively affects the farmers them selves but also may cause both supply insufficiency and inflation. Therefore, preventing the problems of the sector are important at both micro and macro level. Hence, the country’s factors of production (land, labor, capital) cannot be left to market conditions. In particular, the decisions to be taken in the agricul tural sector, which can be seen as the cause of food inflation, should not be left to the farmers themselves. This is because agriculture has become more impor tant in Turkey as well as in the world. On the other hand, the negative effects of the problems in the sector such as small family businesses and traditional agricultural practices keeps increasing. Structural problems in Turkey leads to inability of the country to benefit from economies of scale in the agricultural sector and failure of farmers to follow market dynamics and the seasonal movements. Thus, food security and insufficiency problems started to occur in the Turkish economy. The insuffi cient technical infrastructure and cold chain, lack of personnel, insufficient knowledge of producers and consumers summarize the scale of the problems at 90 Resül Yazıcı the individual and institutional level at the agricultural sector. In order to solve these basic problems, the following questions need to be answered: How will it be ensured that the problems of family businesses can be overcome and farmers can turn to more correct products? How will it be possible to make appropriate decisions regarding agriculture and manage risks? This study attempting to find answers to these questions consists of three main sections. In the first section, the problems of the agricultural economy will be discussed in general. The second main section will focus on the impor tance of cooperatives for the solution of these problems and financing in the agricultural economy. In the last main section, suggestions will be developed for the success of cooperatives.