Turkey’s agriculture sector accounted for 9% of GDP (USD 62bn) in 2013. Despite a decline compared to industrial and service activities, agriculture continues to play a crucial role in Turkish society and generates the bulk of income and employment in rural areas (25% of the working population and over 60% of rural employment). The importance of agriculture in Turkey is even more apparent when the food chain is taken into account.
A study conducted by the World Bank and endorsed by the Turkish Ministry of Agriculture indicates that the financing needs to upgrade 5,000 agri-food companies in animal sectors and sectors of animal origin (red meat, poultry, fish, milk, eggs) range between EUR 1.2bn and EUR 2bn. In this specific context, the project supported by AFD aims to provide financial assistance for the implementation of the policy to upgrade Turkey’s agri-food sector and will focus on bringing small industries in the sector up to health, plant-health and environmental standards.
The credit line allocated by AFD to T.C. Ziraat Bankasi, a State-owned commercial bank and the leader in financing the agriculture sector, aims to finance SME investments in Turkey in the context of the upgrading/restructuring of processing sectors for animal products and products of animal origin.
AFD’s financing conditions will also allow a technical assistance program to be set up which will contribute to :
- Building the capacities of the bank and agri-food SMEs in the field of health, plant-health and environmental standards ;
- Implementing a Corporate Social Responsibility (CSR) policy in the partner bank.
- Emergence of a sector complying with European health, plant-health and environmental standards in Turkey ;
- Skills of Ziraat Bankasi’s teams strengthened in the agricultural processing sector, a sector of operation which until now has been less of a priority in Turkey than the primary production sector, as well as bringing this sector up to environmental and health standards ;
- Promotion of CSR in the banking sector and with SMEs in Turkey ;
- Contribution to the process to strengthen Turkey’s ties with Europe ;
- Assistance to the EU in the support it provides to Turkey for its reform program, in particular via the provision of IPARD funds (the loans allocated from the AFD credit line are compatible and complementary with IPARD funds).
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