Turkey - Fourth and Fifth Livestock Development Projects

. Document of The World Bank FOR OFFICIAL USE ONLY Report No. 9140 PROJECT PERFORMANCE AUDIT REPORT TURKEY FOURTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1586-TU) FIFTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1862-TU) NOVBEMBER 16, 1990 Operations Evaluation Department This document has a restricted distribution and may be used by leipents only la the performance of their officWa duties. Its contents may not otherwise be disclosed wdotWorld Bank authioriztidon. GLOSSARY AI Artificial insemination CTSS Center for Technical Support Services DOA Directorate of Agriculture (provincial) EBK Turkish Meat and Fish Organization ERR Econoric rate of return FAO Food and Agriculture Organization of the United Nations FAOCP World Bank - FAO Cooperative Program FMD Fool and Mouth Disease GDPI General Directorate of Projects and Implementation GNP Gross National Product GOT Government of the Republic of Turkey GPS Grand-parent stock farm KTH KOY-TUR Holding A.S. (a holding company for TKV companies) LDP General Directorate of Livestock Projects M&FRA Ministry of Agriculture, Forestry and Rural Affairs NGO Non-government Organization PCR Project Completion Report PPAR Project Performance Audit Report PS Parent stock farm (for day-old chicken production) RPC Regional Processing Center SAR Staff Appraisal Report of the World Bank TCZB Agricultural Bank of Turkey TKV Development Foundation of Turkey TYT Turkish Wool and Mohair Corporation VBH Village broiler house VGT Village group technician FOR OFFICIAL USE ONLY THE WORLD BANK Washington, D.C. 20433 U.S.A. Office of Director-General Operations Evaluatkon November 16, 1990 MEMORANDUM TO THE EXECUTIVE DIRECTORS AND THE PRESIDENT SUBJECTs Project Performance Audit Report - Turkey Fourth Livestock Development Project (Loan 1586-TU) Fifth Livestock Development Project (Loan 1862-TU) Attached, for information, is a copy of a report entitled "Project Performance Audit Report on Turkey Fourth Livestock Development Project (Loan 1586-TU) and Fifth Livestock Development Project (Loan 1862-TU)", prepared by the Operations Evaluation Department. Attachment This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. FOR OFFICIAL USE ONLY PROJECT PERFORMANCE AUDIT REPORT TURKEY FOURTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1586-TU) FIFTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1862-TU) TABLE OF CONTENTS Paie No. PREFACE . .... ..................................... BASIC DATA SHEETS.... ............... .. ......... .. iii EVALUATION SUMMARY. ......................... o ... ...... vii PROJECT PERFORMANCE AUDIT I. Project Background........ ....... ................. 1 II. Project Design. ............. ............. ........... .. 4 Livestock IV................. .... .0................. 4 Livestock V.................*....................... 5 III. Implementation Experience............. 7 Livestock IV..................... .................. ..... 7 Livestock V........ .... ................ ............ 10 Ruminant Subloans. .............................. 10 Poultry Component .......................... .... 11 Disease Control................ ............... 12 Artificial Insemination....................... 12 Meat Processing. ............................... . 13 Mohair Processing............................... 13 Consultancies and Training......... 13 IV. Project Outcome. . .............. ................................ 14 Farm Development... ... ....... 0 ........... 14 Livestock IV....... .................................... 14 Livestock V ...................................... 0 ....... 17 Smallholder Target Group.... .................... 20 Other Components in Livestock V..................... 21 Animal Health...................... . ............ 21 Artificial Insemination and Breeding............ 21 Processing ........... ....................... ... . 21 Economic Rates of Return............................ 21 V. Issues and Lessons.... ...................... .................... 24 Imported Dairy Cattle... ... ............................ 24 The A.I. Program ........................... ......... 26 Forage Development............ . .. ................... 27 Fattening Subloans ....................... .. ....... 28 Poultry Component Structure............. ......... 29 Institutional Development........... .......... 30 Livestock Strategy ....... ................... 33 Tables ................... . . . . . . . . ...........* 35 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. Pale No. ANNEXES 1. Design of the Poultry Component in Livestock V.......... 57 2. Factors Affecting the Investment Climate in Livestock MAPS IBRD 16766R IBRD 13431R1 IBRD 13432R1 IBRD 14841R1 PROJECT PERFORMANCE AUDIT REPORT TURKEY FOURTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1586-TU) FIFTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1862-TU) PREFACE This is a Project Performance Audit Report (PPAR) on the latter two of a series of five projects through which the Bank and IDA assisted the Government of Turkey (GOT) in development of the livestock sector- Loans 1586-TU and 1862-TU. The former Loan--the Fourth Livestock Development Project--for US$24.0 million was approved on June 2, 1978 and closed on schedule on June 30, 1985; an amount of US$2.13 million was cancelled at final disbursement on February 20, 1986. The Fifth Livestock Development Project for US$51.0 million was approved on June 3, 1980 and closed after a six-month postponement of Closing Date on December 31, 1987; the Loan was fully disbursed with a final disbursement on October 31, 1988. The PPAR is based on the Project Completion Reports (PCRs) of the projects,1/ reports by the project agencies, the Staff Appraisal and Presidaat's Reports, the loan documents, project files, discussions with Bank staff in Washington D.C. and Ankara and with GOT officia's in Turkey, and field observations and farmer interviews in a sample of the project areas during May 1990. The PCRs provide an account and assessment of the projects, although the report on the fourth project is more comprehensive than that of the fifth. The PPAR elaborates on particular aspects of the project design and implementation, especially on the need for major revisions in the project components during implementation and the overall sectoral impact of the projects; this has resulted in the inclusion of significant sectoral description. It also updates and/or includes additional statistical and performance data where these are relevant, and attempts to analyze available data to a greater extent than that undertaken in the PCRs. Following OED procedures, copies of the draft PPAR were sent to GOT on August 28, requesting any response by October 16, 1990. No comments were received by October 23, 1990. 1/ Project Completion Report: Turkey, Fourth Livestock Development Project (Ln. 1586-TU), Report No. 8512, April 4, 1990. Project Completion Report: Turkey, Fifth Livestock Development Project (Ln. 1862-TU), Report No. 8533, April 12, 1990. - iii - PROJECT PERFORMANCE AUDIT REPORT FOURTH LIVESTOCK DEVELOPHENT PROJECT 62AL-LfIU BASIC DATA SHEET A. Key Proleet Data Appraisal Actual or Actual as X Estimate Estimated Actval of Total Project Cost (LY Million) (US$ militon) 83.20 Loan Amount Disbursed (US$ eilion) 24.00 21.87 91.0 Cancelled as of January 20, 1986 - 2.13 Date Physical Components Comaleted June 1985 Dec. 1985 n.a. Proportion then Completed Institutiontl Performance Satisfactory Poor Number of Jobs Created n.a. 750 man-years Financial Rates of Return (%) 23-43 *4-21 Cumulative Disursments (USS milliani EZ2 EM15 EMAL EM.& f1 F= ESM LM a Appraisal Estimate 0.2 2.2 5.6 9.8 15.3 21.3 24.0 24.0 Actual - - - 5.0 6.0 6.S 11.S 21.9 Actual as Percent of Estimate S1.0 39.0 31.0 48.0 91.0 Amunt Cancelled (1/20/86) USS2.13 million Date of Final Osburseenat January 20. 1986 B. Mission Data No. of Mandays Speciality Performance Types of Tre of Missian Mnth/Year Ersans in .Field Reaesanted Ratina Prblem tdentification/ ELALES Ig Preparation Oct 76 4 20 EALE - - Preparation Dec 76 2 10 LE - - Preparation Jan 77 1 14 L . - - Appraisal Oct 77 5 2S LEGFC - - Supervision I Jul78 1 25 L 1 1 - Supervision II Oct 78 1 2 L I 1 - Supervision III (1 May 79 1 17 L 2 3 PM Supervision IV Jul 80 2 S6 L L 3 2 S HT Supervision V May 81 2 54 LL 3 3 TM S Supervision VI Nov 81 2 56 EL 2 2 MT 8 Supervision VII Dec 82 3 54 ALE 3 3 MTB Supervision VtII Aug 83 1 11 A 3 1 M T S Suervision IX Apr 84 2 34 AA 2 1 MT 8 Sjpervision X Oct 84 1 24 A 2 1 MY Supervision XI Jun 85 1 2S A 2 2 MT 8 Supervision XII Feb 86 1 10 A 3 1 M T 8 ZI Includes days spent by supervision missions III Lo Xt on SuPervision of other proects. particularly the Second ara Third Livestock Development prdjects. !olae A a Agriculturist/Agronomist. C = Credit Specialist. E a Economist. F a Financial Analyst. G a Generalist. I a Agroindustries Specialist. L = Livestock Specialist. 1 = Problem Free or Minor Problem. 2 a Moderate Problems. 3 z Major Problems. 1 z taproving, 2 a Stationary. 3 a Deteriorating. B a Financial. Mw Managerial. T z Techntcal. P 2 Politica'. 0 a Other. - iv - C. Other Proiect Data Original Plan Actual First Mention in Files July 1976 July 1976 Negotiations April 1978 April 1978 Board Approval 06/02/78 06/02/78 Loan Agreement 06/05/78 06/05/78 Effectiveness 09/14/78 10/31/78 Closing Date 06/30/85 06/30/85 Borrower Government of the Republic of Turkey Executing Agency General Directorate of Livestock Development Projects/ General Directorate of Projects and Implementation Fiscal Year of Borrower March 1 - February 28 Related Projects 1' Fifth Livestock Development Project Loan Number 1862-TT Loan Amount US$51 million Loan Agreement Date May 13, 1980 Name of Currency (Abbreviation) Turkish Lira (LT) Currency Exchange Rate Appraisal Year Average (1978) US$1.00 = LT 25.25 Intermediary Years Average (1978-1984) US$1.00 - LT 162.16 Completion Year Average (1985) US$1.00 = LT 521.98 1/ The Fifth Livestock Project is not really a follow-on project to the Fourth Project (serving the less developed provinces of the East) but rather the Third Project (covering primarily the more advanced provinces). -v - PROJECT PERFACE AUDIT REPRT FIFTH LIVESTOCK DEVELNENT PROJECT (LOM 1842-TU) BASIC DATA SMET A. KET PAOJECT DATA Appraisal Actual or Estisate Estimated Actual Total Project Cost (USS hillim) 123.0 s/ Total Proect Cost (TL silliam 0,730.0 LoAN Ament (M1 ealiaon) 31.0 31.0 Date of lora Ao0reel 46.03.0 Date ot Loan AQreenal 06.06.80 Date at Loam Effectiveness 10.06.80 1o.22.80 Closing Data 06.30.87 12.31.87 Eco" c Rate of Return 11) 71.11 N/A lastatutona Perferece lived Nueber of lenetaciaries (jobs created) 2,900 fare families N/A plus an additional 2,730 jobs created 1. STAFF INPUT FY79 FTD Fll FM32 F3 FV14 FM3S FV86 FWI3 FY3 Identification/Prep. 23.7 2.0 eMsatse 8.3 Appraisal . 37.3 Servsson 0.4 33.1 11.2 23.4 12.1 15.4 37.1 19.4 11.9 other 0.1 1.3 2.3 0.5 TOTALS - 23.3 69.7 33.1 13.7 23.9 12.8 13.6 37.1 19.4 11.9 C. CINILATIV 01111S3EM FTil FYI8 FY3 FY184 FY83 FYI6 F? FY3 FY39 Appraisal Estimate Us millical 1.0 5.30 12.30 23.30 38.30 48.30 51.00 Actual IUSS maillion) 1.31 4.62 8.30 16.33 32.3 37.32 50.48 51. Actual as I of Estimate -11) 23 33 38 43 67 749 Date of Final Disburseaet October 31, 198 a/ Total actual project cost is not available. - vi - 3. NISSIOR DATA Perforeance Oate ao. of Soscaillations - -ves iMr.IYr.) Persons Peoresmntee it Status /2 Trend 13 of Problems 14 Prealdentaication 7/71 1 L IdeutaticatienlPret 11171 1 L 0,earation 9171*179 Preparation iFAOICPI 2/79*5T9 4, N, AF Supervasiona 1 / 3-4li 4 E. L,N,*N 2 1 P 26/ 5-6181 2 L, L 2 P T 6/91 1 E 2 1 0 4 7/ 10181 1 L 21 4q 57/ 12/81 1 L 2 F, N 6 lon 2 L.A 2 2 F. N 7 5/13 2 A, E O, F 8 10113 1 A 2 2 0,F 9 7/ 4184 2 4, A 2 0, F 10 0/ 6/84 1 A MIA A 4e 11 71 9-10/34 1 A 2 2 N, F 10/ 12 5-6/85 1 E 13 11/83 1 E 14 4-5/86 91 E. AN, AN 2 2 15 7186 1 L 2 1o 9-10/16 1 A L, L 2 17 si7 I MA 2 to 10181 1 E 2 19 11/U8 I E PCR disiaon 4/9 2 E, L E. OTHhR PROJECT DATA Borrower Sovesmet of the Republic of Turkey Executu Agencies Ridastry of Agraculture. Forestry and Rural Affairs, seral 0rectorate for Livestock Develege t (LIPI Senal Directorate of Projects and lelesentatson ISAPI) Ill, Agraicultural ank of Turkey (TCIl1, Turkist oei and ohatir Corporation, and Ileat and Fish Organization 112 Fiscal Year of lorroer arch I - February 28 (at loaa siqaasturel, changes during tepleseation perined to January - OnOMter 31. Mase of Currencyt Turkish Lira ITL) Currency Eachange Rats Appraisal year Average 1979 USS1.00 s LT 31.10 Intervmsseq fears AveraqGe 1910*47 US1.00 a LT 374.46 Cosletion fear Average 1983 US11.00 a LT 1,422.30 1/ E s EconmestFiniacial Analystt L a Livestock Specialists N a Nohast Sactalist AN a Aniaal Health Specaalists AF a Anial Feeding Specialist 21 1 a Probles frooeemlor grobless 2 M Meerate proulessl 3 Major proesids I/ I z lepreang 2 a Stationary; 3 s Deteriorating 4/ Finaciali N a Maagesmets T a Technacal; P a Political; 0 * Other 5I All part*tuee ecept the ocngieast. 61 This aission was limited to supervision of the on-fare coament. 71 Part-tise only, in conjunction vith other supervisory activities. 8/ Partial supervision only. 91 Mid-ters revie eassion. 101 Type of proless and status no loner indicated an suoervason reortenq fares. 11/ Follotag dissolution of LOP to a 1984 reorganazation of the Ministry. 121 Capeouest cancelled. - vii - PROJECT PERFORMANCE AUDIT REPORT TURKEY FOURTH LIVESTOCK DEVELOPMENT PROJECT (OAN 1586-TU) FIFTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1862-TU) EVALUATION SUMMARY Introduction 1. Turkey has one of the largest livestock resources in Europe and the Middle East. It contributes about one third of agricultural GDP and about 6% of GDP. Livestock ownership is widely distributed among the rural population, mostly in mixed agriculture/livestock farming systems in which traditional husbandry practices predominate. 2. The eastern part of the country has a harsher environment in long and cold winters, lower population density, less infrastructure and economic development, a much higher ratio of grazing land to cropped land than elsewhere, and a heavy emphasis on livestock production in traditional mixed farming systems. The central and western areas have a number of more favorable production environments, greater population density and economic development, and varied and sometimes very intensive agricultural production systems. Commercial cow milk production supplyl.Ag pasteurizing plants (and other Processors) is concentrated in the west and parts of the central areas near major consumption centers, as is most of the commercial poultry industry. 3. Prior to the approval of the two livestock development projects which are the subject of this audit, the Bank supported the GOT in three -earlier projects. Livestock I and III were aimed largely at milk production in the central and western zones using imported purebred dairy cows; Livestock V follows this focus but also includes a number of additional sectoral interventions. Livestock II was directed at improving the traditional livestock breeding enterprises in the eastern areas, and also included a credit line for livestock fattening in the traditional fattening zones of Turkey; Livestock IV is a successor to this project in concentrating in the east, but also introduces an imported dairy cow component for this area. 4. In all of the livestock projects, which were based on the concept of development through supervised credit, the main implementing agency was the General Directorate of Livestock Development (LDP) which was created to support bank-assisted projects. It provided not only overall project management, coordination and technical assistance to participating farmers, but also prepared farm plans as a condition for credit through the Agricultural Bank of Turkey (TCZB). 5. During implementation of the earlier projects and at the time of appraisal of Livestock IV and V, the GOT pursued policies of heavy intervention, subsidy, protection and controls in agriculture. From 1980, this attitude changed to one which encouraged more self reliance and responsiveness to market conditions. The Bank supported this change in - viii - economic approach in a number of structural and sectoral loans in the early 1980s. Objective. 6. The fourth project (Loan signing 6/78) am.med at improving productivity in the eastern regions through breed i-provement, on-farm fodder production and enhanced management to give higher coefficients per animal and per farm; this component was targeted at 3,200 farmers. A second component was dairy cow subloans to 2,000 farmers who would replace local cattle with about 12,000 imported dairy cattle. 7. The fifth project (Loan signing 6/80) aimed at distributing 7,500 imported cattle in subloans to about 1,150 farmers in 32 central and western provinces, with complementary improvements in infrastructure, forage production and management. It also included a number of other components which included supervised credit for crossbred cattle, merino sheep and angora goat enterprises in the same area, animal health service improvement (surveys, vaccine production and disease control programs), major expansion of artificial breeding in cattle, and processing investments for meat and mohair through national parastatal companies. An innovative component was a supervised credit program for 600 village-based poultry operations and associated processing investments based on a model which had been successfully applied on a pilot basis. Implementation Experience 8. The fourth project suffered start-up delays and subsequent implementation problems due to LDP difficulties in recruiting qualified and experienced staff who were willing to be located in the eastern provinces. The factor which had the most profound effect in the program, however, was the lack of interest by farmers in taking up the imported dairy cow subloans. In 1980 the GOT devalued the Turkish lira (LT) and adopted a policy of maintaining a competitive exchange rate. This resulted in imported cattle being almost twice the value of local purchased cattle in LT terms and greatly reduced the financial viability of milk production based on imported cows. At the same time interest rates were increasing which dampened interest in any longer time subloan commitments. This led to the Bank agreeing to amend the legal documents in July 1983 to permit disbursement on a wider range of farm improvements, on local livestock as well as imported cattle, and also cattle and sheep fattening enterprises (which were largely short-term subloans); the latter had been excluded at the time of appraisal as it was considered that this activity was well established and credit lines already existed through TCZB. The project area was extended a year later (9/84) to cover fattening subloans in part of the area which had been previously included in the third livestock project. 9. The fifth project encountered some institutional problems at start-up but was not affected by this as much as the fourth project. The same phenomenon of decreased interest in imported dairy cow loans occurred so that the legal documents were modified along similar lines to those of the fourth project in July 1983. (The third project, which was also ongoing in 1983, was similarly modified at the same time). The other cattle, merino sheep and angora goat supervised credit targets were eventually reached after an initial period of slow progress. - ix - 10. The poultry component experienced some delays in appointment of the Turkish Development Foundation (TKV) as a local non-profit, non- government organization to provide the technical assistance to the project but eventually made good progress. A number of changes were made in the details aL the original program of integrated bruiler production, input supply, processing and marketing but the basic concept was not modified. The size of individual broiler units was increased from 2,000 to 4,000 birds per cycle to gain some economies of scale, and the parent stock production involved more individual farm producers than originally planned. 11. The animal disease control programs were implemented, albeit with some delays and implementation problems, and an additional investment in the form of support for foot and mouth disease (FMD) vaccine production was added. The major artificial insemination (A.I.) program (29% of project costs in the SAR) suffered from less demand than anticipated, budgetary constraints and low efficiency in many provinces. The mohair processing plant was completed, but the meat processing component was cancelled in view of changed priorities. Results 12. Unfortunately, institutional difficulties and changed responsibilities resulted in poor monitoring of on-farm performance and dispersion of the project institutional memory which prevented an unequivocal assessment of the impact of both projects. Apart from a scarcity of farm data, there were problems of identification of GOT's budgetary contributions to components, especially for the fifth project. Nevertheless, some assessment of impact has been possible based on the data available. 13. Changes in composition of the subloan component for ruminant livestock resulted in substantial modifications to the project outcome compared to the SAR in both the fourth and fifth projects. In Livestock IV only 29% of dairy subloans were achieved, and 6,557 purebred cows were eventually distributed, of which about half were local purebreds, compared to the targeted 12,000 imported cows. Sheep subloans reached less than 40% of the targeted farmers, while cattle improvement subloans reached 70% (the cattle improvement enterprise using crossbred cattle being very suited to the production environment in the project area). The dominant subloan activity was cattle and sheep fattening which absorbed about two thirds of the supervised credit component. 14. In Livestock V, about 42% of the dairy subloan target was met, and 5,136 cows were distributed, of which 76% were local purebreds, compared to a targeted 7,500 imported cows. The merino and and angora goat subcomponents exceeded their subloan targets, as did crossbred cattle improvement. The fattening subcomponent absorbed about 54% of the subloans for ruminant livestock. The poultry subcomponent exceeded its target in the number of financed village broiler houses, but some of the complementary investments needed for the integrated operation were not completed by project closure. Subsequent to the project, TKV has organized additional financing (including IFC equity and loan participation) to complete the investments. - x - 15. A project record of subloan performance by type and size was unavailable for either project. However, the feedback from TCZB and MAFRA officials at the center and in the visited provinces combined with the records which were available suggested the following: (a) from 15% to 35% of dairy cow subloans were in arrears in the various provinces, with the larger subborrowers and the farmers who invested in imported cows in the eastern provinces having the highest delinquency (an unknown percentage had repaid subloans by selling off stock.and it appears that less than 70% of the financed enterprises are still operational); (b) in sheep and cattle improvement enterprises the arrears were about 30%; (c) in merino breeding, about 10% of subborrowers have ceased to operate, with subloan arrears ranging from 20% to 50% in provinces; (d) in angora goat breeding there has been a significant percentage of subborrowers who have abandoned the enterprise and reverted to traditional smallstock production system; (e) subborrowers for fattening have performed reasonably well (as could be expected because of the short term nature and the profitability of the enterprise) with about 85% and 75-80% for cattle and sheep fatteners respectively repaying on schedule; and (f) the poultry subborrowers represented a mixed picture, with those having a regular supply of good quality broiler growing ration and a good market being in a healthy financial state, and those without these characteristics being in serious repayment difficulties (with those units in the eastern area being especially affected). 16. The animal health component in Livestock V had an appreciable impact although the findings of the mastitis survey and studies were not adequately transmitted to field-level staff. The A.I. program fell short of its target, with about 30% of the intended conceptions through artificial breeding being obtained annually. The mohair processing facility was only able to function at about 20% of capacity, largely due to working capital problems which prevented the parastatal owner from competing in the market for raw mohair. 17. The audit considers that an ERR could not be reliably estimated for either project, although the PCR for the fourth project did estimate a 16% ERR based on an assumed model mix. S-stainability 18. There is little doubt that the animal health components of the fifth project will continue to make a contribution to the livestock subsector. The future of the mohair tops plant will likely depend on its privatization and an improvement in the performance of the angora goat/mohair industry in Turkey, both of which are uncertain at this time. The A.I. investment will be sustainable at least in the areas of greater concentration of exotic livestock, but the national program needs to be reviewed so that it is rationalized in economic terms and is able to generate substantial cost recovery to support the recurrent costs of the service. The training components, although less comprehensive than needed, will make a continued contribution. 19. The main consideration in sustainable impact in both projects, however, is on-farm development through -he supervised credit programs. The subloans dealing with breed improvement (dairy, mixed milk/beef with crossbred cows, sheep breeding and angora goat enterprises) can be expected to have a sustainable impact, even if less than was intended in the project - Ki - design. The reduced emphasis given to the production of farm-grown fodder, the mediocre performance levels on a significant proportion of farms and the noted "drop-out" rate in many of the financed enterprises detracts from the potential impact. However, these types of subloans did normally involve substantial "permanent" investment in the form of infrastructure, equipment and improved genetic material, and at least some improvement in the management of the production system in many cases. The investment through the poultry subloans should continue to make a valuable contribution to the broiler industry in Turkey, even though the investments in the eastern zone are liable to have some financial difficulties at least in the near term. However, as the major part of the supervised credit programs was in cattle and sheep fattening subloans, these investments must have the greatest weight in assessing sustainability. 20. The major difference between a fattening enterprise and the livestock breeding activities previously described is that it need not represent a "permanent" investment or shift in production. As long as a farmer has housing for livestock he can engage in fattening a group of animals over about a five month period if he assesses that he can make a significant profit using purchased feeds (concentrates, wet sugar beet pulp, barley and hay/straw) or using a combination of purchased feeds and farm-produced roughage (grazing/hay/straw). The adoption of a fattening cycle does not necessitate a long-term financial or resource commitment to this activity. Although overall statistics in fattening subloans were unavailable, investment in housing and equipment associated with fattening activities was a small part of the fattening subloan portfolio, with most of the subloan resources going to purchase of livestock for fattening and for feed. Investment in "permanent" fodder (alfalfa and sanfoin) was not a significant component of fattening subloans. 21. There has been a rising trend in institutional short-term lending for fattening through TCZB since 1980; this could reflect (a) an increase in fattening nationally, and/or (b) a situation in which farmers, in using their total resources, considered that the credit accessible to them was best allocated to their fattening operations as short-term borrowings, and the banking institution favored this activity due to its lower risks relative to most other agricultural investments. National statistics (albeit of limited reliability) do not reflect any significant increase in average slaughter weight of animals over the period (which should result from a substantial increase in the fattening activity), and an examination of TCZB portfolio and the Loan contributions in fattening subloans is unable to verify that the two Loans had a significant effect on the TCZB fattening portfolio. Consequently, in view of the potentially "temporary" nature of most of the fattening subloan expenditures, and a questionable contribution by this subcomponent to any increase in national meat production, the sustainability of the project impact is, at least, uncertain. This conclusion also affects the validity of the benefit stream in any attempt to calculate an ERR. Findings and Lessons 22. The project design, implementation and outcome raised a number of issues: (a) The emphasis given to imported dairy cattle in design of both projects appears unwarranted. Although it can be argued that the average genetic production potential of the imported purebreds - xii - should be higher than local purebreds, the supervised credit program for dairy development could have been carried out with local animals (as did occur finally for over 60% of the subloans). The precariousness of relying on a greatly overvalued currency to favor cattle imports should have been realized, and it is possible that a desire to maximize the Loan amount by including imported cattle as a high foreign exchange cost may have influenced the design process. There was even less justification for including imported stock in the fourth project in which the production environment in the eastern region was less conducive to use of high cost, high production animals requiring substantially improved conditions to realize their potential. (b) Implementation of the A.I. program showed that an attempt to provide blanket coverage by a public sector A.I. service is likely to be inefficient and expensive in both investment and recurrent expenditure. The A.I. program in Turkey needs to be reviewed as part of a national livestock development strategy; this should lead to rationalization of the service to areas where it can be efficiently operated and where demand is substantial and cost recovery can be expected. (c) The production of farm-grown fodder was correctly emphasized in the design of both projects as a means to decrease costs of production and increase livestock output. National agricultural statistics indicate that there was some increase in fodder production in the project period, and that most of this was in the eastern and the Black Sea regions. There was less change in the central and western areas where there is greater competition from cash crops. It appears the project designers may have not taken sufficiently into account the ci,cumstances of the common farming systems in the area of the fifth project. The influence of the fourth project on the increased fodder production in the east is difficult to ascertain. There was negligible impact on meadow and common pasture land in the east, and this objective of the fourth project was unrealistic considering the associated technical, social and legal issues which were not addressed in the project. The audit found no evidence to support the contention of the PCR on the fourth project that greater use of concentrates and farm residues had led to reduced pressure on common grazing lands. Overall, provincial officials accepted that there was a lower-thar.-expected impact by the projects on on-farm fodder production. This is undoubtedly due in some part to the deficiencies in the technical assistance by MAFRA in this field, which were compounded in the later stages of the projects by major institutional changes. (d) If the Loan funds served largely as a substitute for TCZB funds in financing livestock fattening (para 21), the bulk of the Loan funds would represent a transfer to thq institutional banking system in the agricultural sector. While this may have been justified, it is quite different from the development objectives of the project and no analysis was made at the time of Loan modification to analyze the need for this type of infusion of funds or its priority in use of external funds. The Bank did show the required flexibility in adjusting to changed circumstances during the project (although it could have anticipated the impact of the 1980 economic changes and - xiii - acted earlier), but there is a suggestion that a concern to attain Loan disbursement may have overridden the appropriate analysis for a modification of this type. (e) The GOT and the Bank should be commended for their support of the innovative village farmer broiler scheme. However, the question can be raised as to the suitability of this type of investment for the intended smallholders. It is capital intensive, responds to economies of larger scale, and the integrated operation requires relatively high levels of management skills to enable the production coefficients needed to compete in a free market. Because of these requirements the potential to reach significant numbers of smallholder families is very limited, and this suggests that a non- profit development organization (such as TKV which provided the guidance and technical assistance in this case) may be better directed to schemes which have a wider impact in the number of families influenced. (f) The abandonment of the project-specific advisory service (LDP) in the MAFRA reorganization in 1984 and its replacement with the "generalist" extension service exacerbated a problem of inadequate assistance to subborrowers. The new system is deficient in livestock services; it can only hope to reach the required level of competence in livestock matters after a prolonged period of training and experience in animal production for field officers, especially subject matter specialists, and the emergence of leadership which emphasizes the important role livestock has in most farming systems. Unfortunately, the relatively poor performance of the training component in Livestock V executed through FAO did not do much to improve the availability of well-trained livestock production specialists, and institutional arrangements for training in any future project will need more attention. The TCZB has begun to take a more active role in preparing its own project proposals which the audit considers a very desirable development. g) General livestock programs defined in 5-year plans are inadequate as a basis for development of this important subsector. Neither of the two projects were designed within a clearly defined livestock development strategy. Had there been a sound strategy this would almost certainly have modified the major imported cattle component in the fourth project and altered some of the sectoral support components in the fifth project. Despite the Bank emphasizing the need for the subsectoral analysis by GOT from mid-1985, and the preparation of a series of technical papers by MAFRA officials and some ..' university consultants in 1986 and 1987, the project ended wit. ut an agreed strategy which could be used as a basis for further Bank support. 23. Overall, despite the problems and issues noted above, both projects have had a positive impact on the livestock subsector of Turkey. The fourth project has contributed to some improvement in the traditional forms of livestock production in the eastern regions in up to 2,270 farms (44% of the SAR target), including about 500 fattening operations, as well as in some development in central Turkey which was 86% stock fattening finance. In the fifth project, if the fattening and the poultry subcomponents are excluded, the total subloans (2,220) were close to the - xiv - SAR target of 2,300; however, there has been a significant farmer drop-out rate in most of these enterprises. The poultry subcomponent made a worthwhile contribution, albeit at a very high cost in technical assistance per participating farmer. Both projects are rated as marginally successful and both certainly achieved very much less than the development target set at appraisal. It would not appear sensible for the Bank to embark on further support in the livestock subsector unless it is part of a clear, agreed livestock development strategy for Turkey in which the lessons from experience in this earlier series of projects is fully taken into account. PROJECT PERFORMANCE AUDIT REPORT TURKEY FOURTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1586-TU) FIFTH LIVESTOCK DEVELOPMENT PROJECT (LOAN 1862-TU) I. PROJECT BACKGROUND 1. Turkey has one of the largest livestock resources in Europe and the Middle East (nearly 13.0 million cattle, over 40.0 million sheep and about 13.0 million goats). Livestock comprises about one third of the gross value of agricultural production which has declined in relative importance from a quarter of GDP in the mid seventies to about 17% of GDP in the late eighties. Animal ownership is widely distributed amongst the rural population, with most families owning small numbers of cattle and smallstock (sheep and/or goats). There is generally a close interdependence of crop and livestock production, with ruminant1 livestock production assuming greater importance in the eastern part of the country where the grazing land-cropped land ratio is much higher than elsewhere. 2. For statistical and analytical purposes, the country is divided into nine agricultural regions (IBRD Map 16766R). Tables 1 to 3 indicate the distribution of cattle, buffaloes, exotic dairy cattle and their crosses, sheep, goats and poultry. These data indicate that the region along the Black Sea coast (region VII) has the highest total cattle numbers, the highest number of exotic dairy breed crosses, and substantial purebred dairy cattle. Here, the Jersey breed (small, efficient, high- butterfat producer) is dominant as the exotic influence, land holdings &Le mostly very small, and the region contributes less to the commercial pasteurized milk market than the central and western regions. The more developed and urbanized central and western regions (I, II and III) have the highest number of purebred exotic dairy cattle, about 2.5 times this number as crossbreds, and the Holstein Friesian and Brown Swiss breeds are the dominant exotics (large, high milk yield and also beef production potential); these zones have the largest concentration of commercial milk supplies to pasteurizing plants. The eastern regions (V, VI and VIII) have very high numbers of local cattle, significant numbers of crossbred dairy cattle (but less in the southeast), and relatively few purebreds; this is consistent with the harsher environment, less infrastructure and urbanization, and relatively greater availability of grazing lands. 3. Sheep numbers, which are mostly native fat-tail breeds, are greatest in the eastern region. Merinos assume some importance in northwest Turkey east of the Marmara Sea where they make up 10% to 13% of the sheep numbers in the provinces, whereas other areas have much less merino influence which is negligible in the east. Goats are most numerous 1 Ruminant livestock comprise cattle, sheep and goats in the context of this report. - 2 - in the southeastern and southwestern areas, whereas Angora goats (producing mohair fiber) are important in the far southeast (10% to 20% of goats) and in the western half of the central Anatolian plateau (40% to 70% of goats in these provinces). The poultry industry for both broiler meat production and eggs is concentrated in the western part of Turkey (regions I to III), and is of least importance in the less-developed eastern provinces (regions V, VI and VIII). 4. Despite the large livestock resource, livestock productivity has not been high relative to neighboring European and Mediterranean countries. From 1963 to 1975 output increased at an estimated 2.5% per annum in accordance with statistics which lack precision, which was only half that targeted in the national development plans in that period. Increases in numbers of ruminant livestock were very small, although the influence of exotic dairy cattle increased in the national cow herd (Table 3) and the number of poultry expanded significantly. External trade in livestock and livestock products was limited in the 1970s, with imports mainly being pedigree stock and exports as mohair and as live sheep and cattle for slaughter. 5. From the early seventies, the GOT livestock sector policies emphasized increased production in order to satisfy rising domestic demand and encourage exports. A desire to reduce income disparities between urban and rural areas, as well as between the western and the less-developed eastern Turkey also encouraged GOT assistance to the livestock sector because of its perceived potential to decrease these disparities through livestock development. This assistance was provided through (a) technical assistance linked to credit to improve the efficiency of production; (b) direct price incentives to increase financial profitability; and (c) expansion of processing and marketing facilities to provide expanded outlets for production and to improve sanitary standards of livestock products. 6. In support of these policies, the Bank assisted GOT with two livestock projects which became effective in 1971 and 1972 respectively, a third livestock project in 1976 and the fourth and fifth livestock development projects which were approved in 1978 and 1980 respectively; the latter two projects are the subject of this audit. 7. The first project introduced 3,300 imported dairy heifers to 159 relatively large-scale farms around the four largest milk-consuming centers in Turkey. It also financed livestock structures and machinery for fodder production as well as technical assistance and training. Technical guidance was provided through the new General Directorate of Livestock Projects (LDP) in the Ministry of Agriculture which also was charged with preparation of farm development plans to be financed under subloans from the Agricultural Bank of Turkey (TCZB); this basic institutional arrangement was used in the design of all of the subsequent livestock projects. 8. The third project covered almost the same area as the first project with two additional provinces and the same development focus. It distributed 10,300 imported heifers to 853 farmers, over half of whom accepted 5 to 10 cows. A substantial devaluation of the Turkish Lira (LT) reduced the demand for imported cattle which resulted in the intended 962 - 3 - of the Loan for disbursement on dairy development being reduced to 76%, and a Loan revision to finance livestock fattening which used 24% of the Loan funds. 9. The second project was also a supervised credit project but did not have a dairy production emphasis. It provided a village development component in the harsher environment of the northeastern provinces in which breeding of sheep and crossbred cattle were supported in integrated farming systems, and a short-term credit line for sheep and cattle fattening in the major fattening areas of Turkey. Both components were judged successful, although the investment was skewed heavily in favor of native sheep breeding and fattening in the village schemes, with little of the intended farm improvements and less than the intended forage development; the cooperative programs to improve community pastures, irrigation management and group purchase of purebred bulls were unsuccessful. The fourth project evolved from this second project, but added a modern dairy development component for the east, while the fifth project followed the third project's focus but expanded the sectoral interventions. 10. The series of livestock projects were undertaken in a period which experienced substantial changes in the economic and political direction of Turkey, and these had an influence particularly on the implementation of the fourth and fifth projects. During 1973-76, Turkey's economy experienced a real growth rate of 7.7% per year. This was financed by large short-term borrowings and a heavy drautoown on its foreign reserves. The resulting external debt burden led to an abrupt disruption in growth in mid-1977 and Turkey experienced a sharp deterioration in creditworthiness, severe shortages of imports, disruptions in industrial production and a rise in unemployment. GNP growth steadily declined from 4.3% in 1977 and turned negative in 1979 and 1980, but recovered to an average of 4.4% during 1981- 1985. Domestic inflation, as measured by the wholesale price index, rose from 24% in 1977 to about 100% in 1980 before it declined to an average of 35% during 1981-85. 11. In response to the severe economic crisis, the GOT announced in early 1980 a new strategy aimed at stabilizing the economy, placing greater reliance on market forces than on quantitative controls, and encouraging efficient growth of the private sector. To implement this strategy, the Government initiated wide-ranging reforms involving a number of key policy areas: exchange rate adjustment (large nominal devaluation followed by continual adjustment to maintain a competitive exchange rate); import liberalization (elimination of the quota list, shifting restricted imports to a more liberalized list, reduction in guarantee deposits, simplification of regulations and centralization of import administration); export promotion (payment of indirect tax rebates, export credit, priority access to foreign exchanges for duty-free imports of inputs, relaxation of export price controls and procedural simplifications); public sector reforms (freeing most parastatals from price controls, rationalizing public investment); financial sector policies (deregulation of interest rates, reduction of selective credits, capital market legislation); monetary policies (control of monetary aggregates to curb inflation); and tax reforms (to increase resource mobilization and restructure investment incentives to promote exports). 12. These policy initiatives received Bank assistance through five SALs and agricultural, financial and energy sector adjustment loans, and were supported by the IMF. The structural support for the agricultural sector (which was subsequent to the approval of the livestock Loans) aimed at providing a tiansition from a highly subsidized and protected system to one which was co be more self-reliant and responsive to market conditions. II. PROJECT DESIGN Livestock IV 13. Following discussions with the Bank, LDP prepared a proposal for a fourth livestock project with FAO/CP assistance in 1976-77. This essentially covered 15 provinces of eastern and northeastern Turkey, targeted medium and large farmers for supervised credit (to avoid loan collateral and repayment capacity problems), and included intensive dairying, village development in livestock breeding enterprises, cattle and sheep fattening, milk collection centers and milk processing, meat processing and artificial insemination and other services. 14. The Bank was concerned about the large scale and complexity of the program and did not consider that institutional resources would be adequate to successfully implement the project in the regions concerned. This concern resulted in significant changes being made by the appraisal mission and a final product which was substantially different from the original GOT proposals. 15. The project eventually included the whole of the provinces of Erzurum, Kars, Agri and Mus in the eastern Anatolian area (Livestock II areas were in the former three provinces) and selected counties in seven other eastern provinces (IBRD Maps 13431RI and 13432R). These provinces were in a relatively difficult production environment with a long and harsh winter and were in the group of 17 eastern provinces with the lowest average family income in the country. It was judged, however, that the human and basic production resources had sufficient potential and that infrastructure and services were adequate to develop a viable project based on supervised credit. 16. The objective was to improve livestock productivity in the region through (a) breed improvement, enhanced stock management and feeding (with emphasis on forage resource development) in village sheep and cattle operations leading to an increase in productivity per animal unit and a flock or herd increase of about 25%; and (b) dairy development (similar in concept to that adopted in the first and third livestock projects in the central and western areas of Turkey) in which 12,000 imported Brown Swiss cattle would replace indigenous cattle. Credit and technical assistance were to be used to attain these objectives (through TCZB and LDP, as well as the General Directorate of Veterinary Services). The Loan also provided for staff and farmer training and studies of the milk industry (procurement, processing and marketing) and a series of consultant studies on livestock production and management. About 65% of the village sheep operations were expected to be with small farmers, as were about 40% of the - 5 - dairy projects. Previous livestock projects had not reached small farmers2 in a significant way. 17. During negotiations, the only serious issue raised was the onlending rate to farmers by TCZB, as the Loan Committee had recommended that the real interest rates be made positive. It was eventually agreed that a negative real interest rate (11%, compared to the "positive" 15% rate at the time) would be accepted but that the interest rate policy would continue to be kept under review. This was on the grounds that a large part of the funds were targeted at smallholders in the poorer regions of Turkey. GOT had demonstrated willingness to have positive real interest rates for industry and agroindustry (18% at the time), and the proposed rate was acceptable to the IMF. An issue of reduced loan collateral being required for smallholders had been previously resolved by TCZB agreeing to chattel mortgage and a cosigner guarantee in the absence of titled land. 18. A number of notable assumptions and decisions were made in the final design of the fourth project. The fir : was the assumption that intensive milk production systems using imported cattle of high genetic potential should be encouraged in the production and socioeconomic environment of eastern Anatolia, and that stock of high dairy merit were not available locally (SAR para 2.10). The second was the contention that increased forage production would be adopted in farming systems not only through forage crops cn traditionally fallow lands but also through substitution of grain crop areas, and that the productivity of natural grasslands would be improved (largely by use of superphosphate fertilizer to benefit the annual legume component of the pasture); on-farm production of feedstuffs was to be a central feature of the project (SAR para 2.12). The third was to continue with the institutional arrangement in which the LDP would not only provide technical assistance to the subborrowers, but would also prepare the farm development plans on which the TCZB would process subloans; in other words, the need to develop the capability in agricultural subloan preparation and assessment by TCZB technical staff was apparently not considered. The fourth was the decision to exclude fattening of sheep and cattle as the Bank cons3.dered that this was already accepted as a viable proposition and funds were available in the banking system to support this activity. Livestock V 19. The LDP of GOT prepared the fifth project, assisted by two Bank missions and FAO/CP. It was presented to the Bank in October 1979 and was included in GOT's Fourth Five-year Plan. 20. The project sought to consolidate and expand the progress made in the third project in that it covered 32 provinces in much of the same geographical area (IBRD Map 14841R1) and was heavily weighted to milk production based on imported dairy stock. It also, however, had other components designed to develop various aspects .f Turkey's substantial 2 A smallholder was defined in the project leral agreeme .s a farmer whose pre-development family income was l'ess chan LT 3b,000 (which was equivalent to US$1,818 at the time) wi*th at least 75% of this amount being derived from the farm. - 6 - livestock resource: (a) medium- and long-term supervised credit for on-farm development and genetic improvement in cattle and sheep enterprises; 'I-) supervised credit and intense technical assistance for poultry pro4action; (c) livestock disease control interventions to mitigate the disease effects on human and animal health; (d) a large expansion of the facilities and operations of the artificial insemination (A.I.) program for cattle; (e) investment in meat processing facilities owned by the parastatal Meat and Fish Organization (EBK) in the central- east and east regions, and in refrigerated rail transport; and (f) construction of a mohair processing plant owned by the parastatal Turkish Wool and Mohair Corporation (TYT) for export of high-value mohair tops.3 21. In its broader sectoral interventions, the project had some of the characteristics of the proposal originally prepared by GOT as a basis for the fourth livestock project which had been subsequently scaled down by the Bank on the grounds of inadequacy of institutional resources at that time; the fourth project proposal, however, had been directed at the eastern half of Turkey which is generally less developed than the area included in the fifth project. 22. The SAR states that about half of the projected 2,300 subloans for ruminant livestock enterprises would be to small farmers (SAR para. 2.06), as would all of the projected 600 village poultry subloans. A new Agricultural Credit Law on April 17, 1979 formalized most of credit arrangements agreed in earlier projects and defined a small farmer as one with a net annual predevelopment family income which did not exceed the national minimum wage (LT 64,800 in April '79, equivalent to US$1,376 at the time) . This figure is not dissimilar to that used for the fourth project (US$1,820 equivalent). However, there was no conditionality imposed on disbursements which obligated allocation of a particular percentage of subloans to small farmers. 23. The institutional arrangements for subloan processing were generally the same as that used in previous livestock projects. The poultry component, however, had a number of innovations. It was a vertically integrated concept of broiler prvduction, servicing, processing and marketing based cmi an existing integrated pilot project at Tarsus in Icel province. The pilot project had been promoted, organized and serviced by a local non-government organization (NGO) Lalled the Turkish Development Foundation (TKV) working with village farmers; the scheme included farmer ownership and control of the related processing units. The poultry component in the fifth project essentially followed the Tarsus model, and included a Center for Technical Support Services (CTSS) which would initially support the farmers in production, managemnt and organizational aspects with the assistance of an experienced consulting firm. The CTSS would prepare the farm development plan for the poultry enterprises as a basis for the TCZB subloans, in lieu of LDP which assisted with the subloans concerning ruminant livestock. In view of the innovativenass of the institutional arrangements for the poultry component this is described further in Annex 1. 3 An apicultural component for rural families was also prepared but was dropped at appraisal due to the outbreak of a parasitic disease lethal to bees. - 7 - III. IMPLEMENTATION EXPERIENCE Livestock IV 24. The project experienced a delayed project start-up and remained behind appraisal targets throughout its implementation which was reflected in slow Loan disbursements (Basic Data Sheet-Cumulative Disbursements). Key problems were the inability of LDP to attract and retain qualified and experienced technical staff to execute its role as the prime motivator in the project, and budgetary constraints. 25. The project area in eastern Turkey was generally unattractive to most professionals who favored the climate, facilities and services of the western, central and southern zones. This led to very slow transfer and recruitment of staff for the project in LDP, the appointment of many fresh university graduates, high staff turnover, and an excessive proportion of staff at headquarters. The activities of operating staff were inhibited by a very low fuel transport allowance and gross inefficiencies in the obligatory procurement of spare parts through the GOT supply agency. A system of fixed-term contracts carrying substantially higher salaries was introduced during the project and provided some but inadequate recruitment relief. At the Bank's suggestion, a special fund was set up with financing from the interest payments of subborrowers under the project in order to provide a source of off-budget higher allowances for staff in arduous areas; this fund, although established, was not activated due to Treasury's objection to its inconsistency with GOT policies on equitable benefits for all civil servants irrespective of location.4 26. The outcome of staffing and operational support constraints led to not only a slow rate of project implementation but also to a reduced quality in the services offered to farmers as well as managerial and procurement problems within LDP. Progress and performance were further hindered by inadequate veterinary health services in the project area. The Bank forcefully raised these issues in a letter to the Ministries of Agriculture and Finance and the State Planning Organization in late 1980; this resulted in a significant and quick improvement in budgetary support, but the other issues were not satisfactorily resolved. 27. The institutional deficiencies continued to constrain the size of the program and resulted in suboptimal follow-up and technical supervision of loan implementation after approval; supervision missions particularly commented on the lack of attention to the key on-farm forage development program. However, the exogenous factor of a major change in official exchange rate policy had a more serious influence on the way the project developed. 28. In 1981 and 1982 supervision missions noted that investment in imported dairy heifers was becoming much less attractive, especially in the project areas, and that demand was very low for dairy loans which included 4 This policy, however, had been breached by other organizations/projects in paying higher benefits to employees. - 8 - financing for only imported cattle.5 Due to a large devaluation of the LT and a policy to maintain competitive exchange rates,6 it became possible to procure purebred cattle locally Zor 50% to 60% of the price in LT of imported cattle. In addition, the time lapse between when a plan was made and when imported cattle were actually paid for meant that a farmer could not predict his eventual LT debt as he carried the exchange risk up to the time of payment to the supplier. This was combined with average milk yields which were lower than anticipated under most management conditions in the project area, a temporary but drastic drop in real terms of the price of milk offered by the Milk Industries Organization (TSEK)7 in April 1981, and a high dependence on purchased concentrate feed for production (due to fodder production being generally less than anticipated). These conditions made high input/high output milk production from imported cows financially unviable for most farmers. Interest rates on subloans also increased (to 24% p.a. in October 1980) which, although still negative in real terms, had a negative impact on subloan demand. The existence of a TCZB credit line applicable only to imported cows also limited the local market value the farmer would receive for progeny of the cows subject to the dairy subloans. 29. By November 1982, only 3,134 cattle of the total project target of 12,000 had been imported, and 276 of the targeted 2,000 dairy subloans were operational (Table 5). Many applicants had withdrawn their interest after subloan project approval by LDP and TCZB. Cattle and sheep breed improvement subloans (which yielded little Loan disbursements because they involved non-reimbursable locally bred livestock and housing investments) had fared somewhat better, reaching about 30% of the appraisal target in subloans (Table 5). However, the very high demand for sheep improvement subloans experienced in Livestock II was not evident (para 9). Meat prices were attractive, due to increased demand partly associated with the impact of the more balanced exchange rate policy on live animal export to the Middle East, but this incentive was tempered with a reluctance by farmers to take on long-term subloan commitments for investments with longer maturity, and an apparently increasing subloan interest rate regime. 30. While long-term subloan demand was waning, the credit demand for fattening of sheep and cattle was high because of significant profitability and a more "controllable" subloan commitment of one year, in which period a turnover of two batches of fattening animals was usually possible.8 Fattening of animals was a traditional enterprise in Turkey, although less 5 Imported cattle alone were to assume 52% of Loan funds; local purebreds were not eligible for Loan reimbursement. 6 The exchange rate averaged LT25.25 to the US$ in 1978, the year of appraisal, was LT76.08 in 1980 and reached LT168.39 in December 1982. 7 Although TSE was not a substantial participant in the total market, it did have important roles in milk trade surplus to local requirements and as a base-price mechanism in the trade. 8 It should be noted that fattening of male progeny in the imported dairy cow program was an important component in these enterprises, but the income benefits were delayed. - 9 - so in the eastern regions which were dominantly breeding and growing zones. Annex 2 further elaborates on the factors affecting the investment climate for the different types of enterprises. 3i. Under the foregoing circumstances, Bank staff recommended major changes in the Loan documents which were reflected in Loan and Project Agreement revisions in July 1983. This permitted Loan financing of locally bred livestock for dairying, breeding or fattening at 45% of expenditure based on a revised estimate of the total foreign exchange content of the project, and a broader coverage of approved subloans which included farm buildings. Reallocations were also made to reflect the anticipated demand for fattening subloans and a possible increase in demand for local dairy breeding stock (Table 6).9 32. In September 1984, a further revision was made which permitted up to US$6.0 million of the Loan to be used in an additional project area for livestock fattening, and also for longer term livestock improvement subloans in the case of small farmers. Livestock III, which had also been revised in July 1983 to allow Loan disbursement on fattening subloans, had been closed March 31, 1984. Livestock V, which also benefited from the same fattening amendment (para 35) was being used to meet the demand for fattening eredit in those provinces which were common with Livestock III, but there was still considerable demand for this type of lending in the provinces of Livestock III which were not in the Livestock V project area; the September 1984 amendment of Livestock IV permitted the inclusion of the anticipated 3ubloans in these areas under this project. It was judged that ample Loan ft;nds would be available without detriment to the program in the original pt.ject area as US$17.0 million of the US$24.0 million remained undisburned !n August 1984. 33. By Jiae 1985 (the Loan Closing Date), US$12.5 million (52% of the Loan) remaintd undisbursed despite the previous Loan revisions. This was largely due to a reorganization of the Ministry of Agricultur- (MAFRA) in June 1984 in which the LDP was disbanded and project responsibility was shared by a coordinator at headquarters with independent staff in the provincial directorates. This led to a breakdown in project services in the late 1984-1985 period of adjustment. The regular lending program for livestock fattening by TCZB continued, but MAFRA had not reviewed these subloans as required for Loan reimbursement. Consequently, the Bank informed GOT on December 19, 1985, that it would reimburse for expcnditures under the TCZB subloans if MAFRA confirmed before December 31, 1985 that each subloan had its approval.10 This was done and a further US$9.65 million was disbursed, leaving US$2.13 million to be cancelled on January 20, 1986 at account closure (Table 6 and Basic Data Sheet). 9 The Bank, therefore, did eventually respond to the modified investment climate created by the policy changes initiated in 1980. A more comprehensive and integrated approach by the Bank to its project and program interventions, however, could have led to an earlier review and adjustment of the ongoing Loans, as the impact of the policy chazges should have been predictable. 10 The applications for reimbursement by TCZB were already at Bank headquarters, but without the required MAFRA approval. - 10 - Livestock V 34. The project suffered a slow start-up after becoming effective in June 1980. This was significantly related to a change in government in September 1980 under which most senior officials pertaining to the project were replaced. A virtual embargo on recruitment further hampered progress and led to the secondment of staff from other directorates general of MAFRA in the nine project provinces which did not already have LDP units. This had implications on the quality and quantity of service by LDP for subloan applicants. There were also delays in recruiting some of the consultant support for various clmponents. 35. Ruminant Subloans. LDP started to prepare some subloans in 1981 but overall progress was slow in all categories. Of particular importance was the poor demand for imported dairy cow subloans for the same basic financial viability reasons previously enunciated for the fourth project (para 28), even though the farms located in the area of the project were less constrained by environmental and market access constraints than those in the fourth project. By March 1983, only 132 of the total appraisal target of 1150 imported dairy cow subloan had been approved, and by June 1983 only US$4.62 million of the US$51.0 million loan had been disbursed. Consequently, the Bank agreed to revise the Loan Agreement for this project at the same time as the Agreements on the on-going third and fourth projects to reflect this decrease in demand for imported dairy cattle. The July 1983 revision was similar for all three projects (para 31) in extending the reimbursable items in subloans, including subloans for fattening stock and accepting local purebred cattle in the dairy investments. This did have some impact on the dairy subloans; by March 1983, only 893 cattle had been imported, while at project closure 5,136 purebred cattle were distributed, of which 3912 were local purebred animals. The final dairy subloans were about half of that intended at appraisal (Table 7), with about three quarters being based on local purebreds and a similar proportion as 5-cow subloans. 36. The project figures for subprojects and subloans of various types as recorded by supervision missions, LDP and TCZB did not always correspond. This was partly due to a 1984 reorganization in MAFRA which disbanded the LDP unit (para 33) and also to reorganization within TCZB. A further complication was the number of subborrowers who withdrew their applications (especially for the imported dairy cows) before drawdown or who prematurely sold up their enterprise and paid back (or defaulted on) their subloans. Nevertheless, the records show that after a slow start the crossbred cattle breeding, merino breeding and angora goat breeding subloans eventually exceeded the appraisal targets (Tables 7); the angora goat program was achieved despite early difficulties in supply of breeding stock from MAFRA farms. 37. After the short-term fattening was permitted, this dominated the dairy cattle and other ruminant subloan portfolio and eventually absorbed 54% of the Loan amount disbursed for supervised credit (Table 8), largely at the expense of the intended imported dairy cow subloans. Fattening included a total of 11,093 subloans according to TCZB records, amounting to LT37,700 million which was reimbursed at 45% under the Loan (TS$11.2 million). As reimbursement was to be for incremental short-term lending, this implies that 11,093 farmers undertook fattening subloans through the - 11 - project for the first time in the period 1984-1987, and that an unknown number of these continued with annual subloans for fattening stock after the initial subloans. 38. Poultry Component. Although neither the SAR nor the legal documents specified that TKV would be the consultant to support the poultry component through the CTSS, TKV was an obvious choice as it was the NGO responsible for the pilot scheme in Tarsus and helped LDP in the preparation of this component. However, there was resistance within sections of MAFRA to the employment of TKV in this capacity, and the new Minister of MAFRA delayed approval of the contract until October 1981. The first village broiler houses (VBH) were established in 1982, reached 342 by end-1984 and 1055 by end-1987 according to TKV (Table 7).11 39. A number of changes were made to facilitate implementation: (a) the size of the individual VBHs was increased form 2,000 to 4,000 birds per cycle which permitted an improved economy of scale both in overhead services and in utilization of family labor; (b) TKV directly participated in the shareholding of RPCs and the parent stock corporations (with the intention to subsequently sell these shares to the farmers) to provide adequate paid-up capital for borrowing; (c) TCZB reduced the equity requirement for subloans to corporations from the regular 40% to 10% for the RPCs (but required a TKV guarantee as collateral in the event of default); (d) instead of 9 parent stock farms, 107 farmer units (each with 1,400 parent stock) were established supplying eggs to hatcheries in three hatchery companies; and (e) MAFRA invested directly in the construction of the single grandparent stock farm (rather than it being financed by TCZB with RPC ownership) and leased it to the company with shareholding by MAFRA's parastatal enterprise arm, a British poultry firm, TKV, KTH,12 and the producer corporations. 40. Although the establishment of VBHs exceeded the appraisal target, the program for RPCs was delayed due to initial equity issues and subloan processing problems. At project closure (and still in May, 1990) four of the 12 RPCs had not received loans from TCZB for construction and working capital to complement the loans already received through Treasury and used for equipment purchase. This was largely associated with the RPCs and TKV insisting that the working capital subloan be included in the term subloan (at a lower interest rate) rather than to carry the higher interest rate of short-term annual working capital loans. The single marketing company (KOY-TUR) was established as planned, and an overall holding company (KOY-TUR Holding A.S. - KTH) was formed. 41. At appraisal it was envisaged that the fifth livestock project would finance the first six years of a ten-year program of poultry development on the Tarsus model. At project closure, the following items required to complete the first phase were wanting: 11 The TCZB records supplied to the PCR mission indicated final figures more than 30% below this, but the audit mission ias unable to obtain more up-to-date figures from TCZB and the TKV recording syster. is detailed and comprehensive. 12 KTH is the holding company for TKV and associated companies. - 12 - (a) completion of the RPC investments;13 (b) two additional hatcheries; (c) expansion in the refrigerated transport and cold storage for the marketing company; (d) the pre-mix feed production unit and expansion of the truck fleet for bulk feed transport from the feed mills, and (e) expansion of grandparent stock production to meet parent stock requirements. KTH has recently (June '90) negotiated equity and loan participation by the International Finance Corporation (IFC) to continue with the program. It has also applied to a Dutch development finance foundation for a soft loan to allow TKV to insert temporary equity into the RPCs in the three eastern provinces already in the scheme which face greater financial difficulties than elsewhere (paras 63 and 64). 42. Disease Control. The disease control programs were restrict--a to mastitis (a bacterial inflammation of the mammary gland) in dairy cows, brucellosis (an abortion-causing bacteria) in cattle, sheep and goats, and theileriosis (a blood-borne protozoan disease transmitted by ticks). The programs were to include a baseline survey to be followed by four to five year health control programs in the 16 central and south-central provinces. 43. All three programs were implemented, although they were delayed and incurred a number of operational difficulties. Implementation was complicated by the creation of a new general directorate for animal disease control soon after appraisal (1980) and by the more radical reorganization of the MAFRA in 1984 (paras 33 and 100). Although GOT had rejected the inclusion of Foot and Mouth Lisease (FMD) in the project at appraisal,14 in late 1982 it requested the Bank to include financing of FMD vaccine production at the FMD Institute in Ankara in view of the economic importance of this disease. This was approved in 1983 but the supply of imported drugs and equipment were grossly delayed by local bureaucratic inefficiencies. 44. Artificial Insemination. This component was a major component and was projected to be 29% of total project costs. It covered 20 provinces in central and western Turkey containing about 4.0 million cattle, and included the importation of three proven Holstein-Friesian sires and frozen semen, improvement in semen production centers and an expansion in the A.I. program from 80,000 to nearly 800,000 cows annually at project completion in the 20 provinces. In addition, 2000 purebred dairy heifers were to be imported to expand the herds at the MAFRA breeding stations, as were 170 mares and 30 stallions of the Haflinger breed. 45. The component experienced some start-up delays and achieved about 314,000 inseminations in 1988 in the 20 provinces; at a 65% non-return rate, this would mean about 204,000 cows were impregnated through A.I. This 13 Five feed mills and two processing plants were in various stages of construction. 14 This was most likely due to a concern that a program for FMD might convey the impression internationally that a serious problem existed and therefore impede potential exports of livestock and meat. - 13 - was associated with lesser demand than anticipated and budgetary constraints. The service was inefficient in some provinces, with one (SIVAS) achieving only 33 inseminations per month in 1988 per inseminating team which consisted of an inseminator plus vehicle and driver. Eight of the provinces achieved less than 80 inseminations per team per month and the overall average was 99 inseminations per team per month with 2,000 to 4,000 km. travel in the main inseminating months.15 The A.I. service is provided free of charge to farmers, and a requirement of GOT to submit a scheme by 12/31/81 for recovery of A.I. operating costs exclusive of salaries was postponed twice and was not submitted by Loan closure. MAFRA estimated the costs excluding salaries in 1988 at LT4,100 to LT10,100 per insemination (not per calf produced) in various provinces (equivalent to US$2.60 and US$6.33 respectively). 46. The import of frozen semen was reduced due to procurement problems. Only 1,200 of the 2,000 heifers and only 72 of the 170 Haflinger draft horses were imported, as further procurement was considered unnecessary after resource transfers in the 1984 reorganization of MAFRA. 47. Meat Processing. The Subsidiary Loan Agreement with the Meat and Fish Organization (EBK) was signed in May '81. However, after an internal review which resulted in EBK modifying the program agreed at appraisal, EBK in 1982 decided not to draw down the funds for processing and refrigerated transport but to use alternative sources for a reduced program. Since 1981 the private sector had been allowed to establish integrated meat slaughter and processing operations and six have been set up. However, EBK still has about 32% of the installed slaughter capacity excluding village butchering. 48. Mohair Processing. The Turkish Wool and Mohair Corporation (TYT) received technical assistance from a specialist institute in Britain and completed the construction and equipping of the mohair processing plant in Afyon province. It has a capacity to process in three shifts 1,000 tons per year of greasy mohair yielding about 670 tons of combed tops suitable for export. However, the plant was used only to about 20% of capacity. Although over 20% of savings were made on the investment cost, the Bank refused a request to use the savings on spinning and dyeing equipment for yarn and dyed tops; this was on the grounds that the existing facility should first be brought to an efficient utilization which would mean overcoming working capital and marketing difficulties. 49. Consultancies and Training. Consultancies were engaged for the poultry component, vaccine production, the mastitis program, mohair processing, breed improvement and herd recording and general support to LDP. Although most of these consulants engaged in local training to some extent, training was not a prominent component of the project. Of the US$1.0 million allocated for overseas training, US$842,000 was used largely in courses of three to nine months in which disease control topics were dominant. FAO was used as a contractor to organize overseas training, but 15 This compares with a figure of 195 to 200 per month per inseminator in the late 1970s in Kenya (and 350 per month in the more densely populated central province), 360 per month in the British Milk Marketing Board scheme in 240 farm visits and about 3000 km travel, and 250-300 inseminations per month in 200 farm visits and 3,500 km travel in dairying areas of Queensland, Australia. - 14 - there were gross delays in selecting and processing candidates and courses; Loan funds were fully utilized before all the intended candidates were organized into overseas courses. Short local training courses of four to 15 days duration for staff and farmers were also held in livestock production and disease aspects. However, training was inadequate overall, especially when the major 1984 reorganization of MAFRA is taken into account. IV. PROJECT OUTCOMS Farm Development 50. The outcome of the major farm development components in both projects can only be approximately gauged through the number of types of subloans and impressions of progress being made in the enterprises. With the exception of the poultry component in the fifth project, there was no reliable monitoring of progress through farm sampling, and TCZB records were not adequate to enable an analysis of arrears by type and size of subloans.16 However, overall project records, observations by supervision missions and the audit, and access to detailed but piecemeal data in provincial offices does permit a reasonable assessment of project impact. 51. Livestock IV. The number of dairy subloans reached only 29% of the SAR estimate and 22% of the target in the original project area. Imported cattle comprised about 50% of the cows in the subloans.17 Four of the eastern provinces absorbed 83% of the dairy subloans in the original area and an estimated 86% of cows (4920). These same provinces had about 42,200 purebred dairy cattle (MAFRA estimate) in 1988, so that the project added about 12% to the exotic milk breed population in these provinces. However, there were 296,000 crossbred dairy cattle in these provinces at the same time, which is a factor of seven times the purebreds, compared the national ratio of 3.4 (Table 1). 52. The high proportion of crossbreds reflects the production system which has developed in the eastern provinces for cow milk production: Commercial milk producers tend to have herds of five to eight crossbred 16 TCZB reported that overall repayment arrears on subloans in the Livestock III, IV and V accounts was 50%, 45%, 40%, 30% and 60% in the years 1985 to 1989 respectively. 17 Numbers of dairy cattle in subloans: Imported Local* Total Livestock I 3,506 - 3,506 Livestock III 10,317 - 10,317 Livestock IV 3,257 + 3,300 6,557 Livestock V 1,224 + 3,912 5,136 18,304 7,212 25,516 *After 7/83 - 15 - cattle in mixed farm situations, graze cows daily on accessible meadow pasture with other stock in spring - early summer and also feed irrigated alfalfa hay, concentrate, barley and wet sugar beet pulp (where this is accessible); they are located in areas with reasonable infrastructure and with irrigation, and sell to private milk processors (mandiras) or their collection agents, or to TSEK ihrough the limited number of collection centers with cooling facilities; buildings are rudimentary and the amount of concentrate fed is varied in accordance with assessed profitability of additional feeding; after consumption by calves, production for household consumption and sale varies around 1.200 litres per cow per lactation; vaccines for the basic bacterial diseases are given (clostridia) and mastitis is treated as it occurs but no prophylactic measures are taken. Overall, although improvements can be made in feeding and health management, the system appears compatible with the physical, economic and social environment. Farmers' interest in this type of production was reflected in the number of subloans for "beef cattle improvement" (which included such enterprises) which exceeded all other categories relative to subloan targets before fattening subloans were permitted in July 1983 (Table 5). 53. In addition to the crossbred/mixed farm enterprises engaged in milk production, there are more specialized peri-urban milk producers in the original project area who largely sell directly to urban consumers18 and have largely purebred herds with higher levels of concentrate feeding and high production levels per cow; this is a logical development determined by location/market economics but has obvious limitations for expansion. 54. Details of subindividual loans were not obtained in Erzurum, but the TCZB provincial office indicated that about 65% of the dairy cow subborrowers had paid off their subloans or were on schedule whereas the rest were classed as "problem" loans. However, TCZB and the Directorate of Agriculture (DOA) also indicated that a significant percentage of these repayments was enabled by selling off the purebred cows which had appreciated in value with inflation. This implies that a good percentage of the cows would have gravitated to enterprises which could use the genetic resource profitably. Overall, however, the project design to establish 2,000 relatively specialized dairy farms based on purebred and, even more questionably, imported purebred dairy cattle in the circumstances of eastern Anatolia does not appear to have been sound. The relatively poor outcome in numbers of subloans and persistence in specialized dairy programs seems to verify this contention. There is a place for specialized dairy production, but this would hardly justify the dedication of resources 18 TSEK has closed down five pasteurized milk plants in the eastern zone, and the 30 ton/day plant at Erzurum (the biggest centre in the project area) has a peak intake c! 2.5 tons/day in early summer and about 1.0 ton/day in winter. - 16 - envisaged under the project.19 55. The sheep improvement subloan number eventually reached 37% of target in the original project area. This reflected farmer interest in expanding their involvement in this traditional activity, while at the same time being concerned about undertaking longer term borrowing in circumstances of a less favorable (but still negative in real terms) interest rate regime. In Erzurum, the TCZB indicated that about 70% of subborrowers were making repayments, and TCZB and DOA also estimated that 80% of the enterprises were still operational. In nearly all cases, subloans did result in the construction of improved winter housing for sheep and in some cases equipment, especially as mowers, was purchased. However, the general impression of local officials was that little change has occurred in the feeding or management system for sheep production (milk, meat and wool), and that there was little change in the home-grown forage provision through the Loan. Negligible improvement occurred in meadow or pasture lands. DOA did report that the follow-up after subloan processing was weak so that not only was technical advice deficient, but often the subborrower diverted the subloan funds to other uses; abuses occurred such as two farmers selling their breeding sheep to each other with TCZB financing, and such instances of indebtedness without an adequate resulting increase in the income-earning resource have undoubtedly contributed to the default rate. 56. The sheep and cattle fattening component was the largest in the project, consumed about US$12.7 million of the Loan (Table 6), and comprised about two thirds of the supervised credit componenc. Although some medium-term lending for livestock housing and a little equipment was associated with the fattening program, well over 80% was short-term lending for livestock and feed supplies. Fattening of both sheep and cattle was generally profitable during the project period based on the traditional feeding system of home-produced roughage (mostly cereal straw), wet sugar- beet pulp, purchased concentrates and grain (mainly barley).20 (Irrigated alfalfa, and vetch or sanfoin tend not to be used as extensively as a feed base for fattening as they are for cow milk production.) About 500 farmers benefited financially under the Loan in the project area, and over 1,300 farmers in the areas of the third livestock project. However, here again, local officials maintained that the system used was traditional and there was negligible innovation. In view of the existence of TCZB credit lines 19 The audit considers that the argument to promote specialized milk producers in the east to supply clean cooled milk to pasteurizing plants for human health considerations regardless of economic cost does not have much validity. By tradition, all milk is boiled before human use, and less than 20% is consumed nationally as drinking milk with the rest being processed. It is possible that toxins produced by bacteria (such as some staphlococci) may be heat-stable and survive boiling (or pasteurization), and even some thermoduric bacteria themselves may survive heat treatment. However, to a very great extent, the contamination risks are overcome by boiling. 20 In the fattening cycle which occurred in spring summer, use was often made of private and public pasture grazing before feeding in enclosures; the other fattening cycle later in the year was generally all enclosed. - 17 - for fattening without the project, and the very small effect in permanent production improvements, the sustainability of a real impact of this fattening component can be questioned and is subsequently addressed as an issue in this report (paras 76-79). 57. Livestock V. In general, the project area for the fifth project was more favored in production conditions, infrastructure and market outlets for cow milk production subloans than the eastern areas in the fourth project. Although only 65% of the targeted number of dairy farms were developed, the overall positive impact on cooperating farmers who persisted through the vagaries of varying input/output price ratios and increasing interest rates appears to be sustainable. 58. In Konya province, which is fairly typical of conditions in the main part of the project area, TCZB reported that 84% of dairy subloans were on schedule. There is very little meadow and free range available in these areas (compared to the eastern region), and roughage must be grown or purchased as a specific green or hay crop, or produced or purchased as a straw/hay byproduct. Most dairy farms have irrigated alfalfa to contribute to animal feed rations, or oats or vetch. The basis for milk production, however, is still purchased concentrates, sugar beet pulp and grain. TCZB and DOA in Konya reported that the main reasons for dairy farm failure were lack of adequate roughage produced on the farm and inadequate attention to marketing aspects. 59. In 1988 there were about 285,000 purebred exotic dairy cattle in the 17 provinces included in this component (MAFRA data); this compares with a total project distribution of 1,224 imported purebreds and 3,912 local purebreds, many of the latter likely being transfers within the same general region. Consequently, the impact on the improved genetic pool in the area has not been very substantial, and the need for imports of live cattle can be questioned in view of the existing number of purebreds and the expansion of the A.I. program in this area. 60. The merino breeding subloan numbers exceeded the target (Table 7). Although details of the repayments on all subloans of this type were unavailable, the TCZB Konya provincial figures indicated that about 50% were "problem" loans; 28% of the clients had gone out of merinos, and lack of sufficient premium for the merino wool and progeny was cited as being the main reason for farmers to revert to local karaman sheep. In these subloans a higher yield and unit value of wool and higher on-farm forage production were expected to largely carry the investment costs in livestock housing, merino stock and any equipment involved. As forage production in general did not get the intended emphasis and unit product price was not as high as expected, these factors would have contributed to the high delinquency rate in Konya. However, in the subcomponent as a whole, project records indicate that only about 10% of subborrowers had abandoned the merino enterprise (Table 7), so that performance in other areas was apparently better than in Konya; this could be expected as merinos assume more importance in the provinces to the northwest of Konya (para 3). 61. Performance of the angora goat subloans was not available, but records indicated that about 35% of subborrowers had abandoned the enterprise by 1989 (Table 7). The angora goat mohair industry in Turkey continues to be in difficulty because of inefficient production of mohair which must compete in the market with imported mohair products. Although - 18 - accurate animal inventory statistics are not up-to-date, it appears that there has been a decline in angora goat numbers over the last 20 years and current production is relatively stagnant based on a total population of about 1.9 million. As technical assistance to farmers under the project was less than anticipated, it would be difficult to assume that the program under the project (which distributed 5,300 angora goats) has had a significant impact on the industry. 62. The fattening subloans absorbed about 54% of the Loan disbursement on supervised credit for ruminant livestock (para 37). In general, as for the fourth project, fattening of both cattle and sheep during the project period was financially viable as is evidenced by over 11,000 subloans. Repayment details for the subcomponent were not available, but individual provincial records indicated good credit recovery, with cattle fattening being slightly better than sheep fattening (at about 85% and 75% to 80% respectively); delinquencies appeared to be mostly related to recent drought years in which the production of cereal straw (which usually formed the major part of the roughage diet) was lower and its purchasing price increased drastically. The outcome of this subcomponent is clouded by the issue of real incremental and sustainable benefit as for the fourth project (para 56). 63. The poultry development component, after start-up delays, exceeded the targeted number of VBH subloans but not all of the supporting investments for integrated operations were completed (para 40). With the exception of the VBHs in the three eastern Anatolian sites (Erzurum, Erzincan and Diyarbarkir) and those in the Yozgat province (IBRD Map 14841R1), the remaining eight groups of VBHs continue to operate with satisfactory gross margin (Table 9). The average feed conversion to liveweight ratio has improved for the whole operation from 2.47 in 1985 to 2.22 in 1989 (Table 10), with the four poorer performing groups ranging from 2.29 to 2.46 in 1989 (Table 9).21 Feed makes up about 73% of the variable production coFas, which is similar to intensive broiler industries in most countries. The arm-gate live broiler price/feed price per kg. ratio was 3.3 in 1989 and uras 3.15 in the first three months of 1990, but was about 4.3 from 1986 to 1988 when GOT subsidized concentrate feed prices.22 21 Integrated commercial broiler operations usually have to obtain a 2.0 feed conversion ratio to compete in an open market in developed countries. 22 The same broiler/feed price ratio averages in the USA for the years 1982 to 1989 were 2.56, 2.83, 2.90, 3.48, 3.47, 3.14, 3.13 and 3.55 respectively. There was only a 2.9% increase in production in the USA in 1983 following the poor price ratio (2.56) in 1982, which was followed by 4.5% to 5.1% annual increases when the ratio reached 2.9; the largest annual production increase (8.6%) occurred in 1987 following two years of favorable price ratios (3.48 and 3.47); the subsequent lower price ratios of 3.14 and 3.13 have still managed to elicit an expansion at 3.9% and 7.7% in 1988 and 1989 respectively. Consequently, the price structure in Turkey has beeir at least as favorable to producers and usually better than that in the USA. Recent farm-gate broiler prices have been about 30% higher in US$ terms in Turkey than in the USA. - 19 - 64. The RPC at Erzurum, which was servicing Erzurum and Erzincan VBHs, temporarily ceased operations in August 1989 because the operation became unviable, so that the VBHs (70) were not being used at the time of the audit. Erzurum was one of the RPCs which had trouble organizing the LT subloan for its investments (para 40) and the feed mill was still under construction. The main problem was the very poor quality feed available from the local parastatal feed mill which led to poor conversion into meat.23 This inefficiency could not be overcome by increasing the local market selling price because of the need to keep poultry prices significantly below red meat prices (especially in this eastern part of Turkey where white meat consumption is reportedly significantly less than elsewhere in the country), and because frozen chicken could be transported in from elsewhere at competitive prices. The marketing constraints had become evident in the second year of operation so that the broiler cycles had been reduced from five to three per year before closure was forced; the RPC had been marketing fresh (non-frozen) carcases to save costs and compete with frozen imports into the four provinces in which it was marketing. The farmers with VBHs were reportedly able to meet their TCZB subloan repayments (through the RPC) until closure. The RPC management expects that most of the VBHs will be reactivated when their feed mill is completed at end-1990.24 65. The poor performance of the Yozgat VBHs was not analyzed in detail, but Diyarbarkir suffered from the same poor feed quality/feed conversion phenomenon (Table 9) and its location in the east. Yozgat had higher-than-average feed price and poorer than average feed conversion and the RPC was one of those which has had difficulty in getting finance to complete RPC investments. 66. The subloans must now be in arrears for VBHs in the four problematical provinces. However, the exact situation regarding the remaining operational units is not clear. Statements by TKV indicate that repayments were generally being made on schedule for the functional VBHs (through RPC deductions from financial returns). However, the TCZB in Konya province indicated that only 45% of repayments were on schedule for the 89 poultry subprojects; the operational performance of the Konya VBHs was among the lowest of the "successful" schemes (Table 9), which could explain this high delinquency figure. An overall performance rating of subloans in this component was not available in TCZB Ankara. 67. As previously indicated, some of the RPC investments, which are an essential part of the integrated production/processing/marketing system, have still not been completed (para 40). However, of the 12 RPCs in the project, in 1987 two had a net profit after allowing for subloan repayment and depreciation, five had a positive balance after financing costs but before allowing for depreciation, while seven had an operating profit before allowing for financing and depreciation (Table 11); the other five 23 A survey by a local university in 1988 of all units in the two provinces (project and otherwise) indicated an average feed conversion ratio of 2.58, with 62% of units getting between 2.5 and 3.0. 24 TKV is also investing in a central testing laboratory to enable reliable testing of poultry feed rations. - 20 - did not have an operating profit.25 TKV was negotiating with TCZB concerning penalty rates for repayment arrears at the time of the audit and has negotiated equity/loan participation by IFC (para 41) to continue the program; it believes that it can make a technical and financial success of the integrated poultry operation. 68. KOY-TUR Holding A.S. as (KTH), which was established in 1985, is a holding company of 23 agroindustry subsidiaries of TKV of which 18 are poultry-oriented and mostly related to the developments under the fifth project.26 KTH has approximately 17% of the poultry market share, with the nearest competitor commanding an estimated 7% of the market. Consequently, this component has had a substantial impact in the national poultry production system. Issues relating to geographical location of the schemes, their sustainability and the role of an NGO in this development are discussed in the next section of this report. 69. It should be noted that many of the farmers with VBHs which are having serious problems have complained to MAFRA about their situation, directing the blame for their predicament at TKV. MAFRA has reacted by asking a response of TKV which is conveyed to the farmers concerned, _.ad many MAFRA officials are critical of TKV. Nowever, the audit concluded that there was little in-depth dialogue between MAFRA and TKV concerning the financial and operational problems of this component. The TKV contract was extended under the Loan to end-1987, but TKV has continued its technical and management services since then without direct payment due to its financial and development commitment to the subproject. 70. Smallholder Target Group. The fourth project was to be directed at smallholder farmers in the case of 65% of the sheep production and 41% of the dairy subloans, amounting to 50%,of total subloans. Due to the Loan revisions the final allocation to smallholders in these groups is not easily identified. However, at least 24% of distributed Loan funds went to smallholders based on TCZB criteria, which would imply that less than this proportion of subloans were made to smallholders, as their average subloan size would usually be smaller than that of larger farmers. The fifth project projected that all the poultry and half of the ruminant livestock subborrowers would be smallholders. Available records did not permit a dissection of subborrower size for either of these subloan types. However, from mission observation and responses of project officials it appear that a large proportion of the VBH clients were not smallholdors, although all were village resident farmers;27 TKV officials indicated that this was due to the innovative and relatively capital-intensive nature of the program 25 These include the four pertaining to the problematical groups of VBHs, and the fifth is at Bolu which represents an integrated private scheme started in the late seventies which went bankrupt and was absorbed into the TKV project in December 1988. 26 Most of the remaining companies are in the dairy sector, but also in bee/honey production and a mink production facility. The single marketing company, TUR, markets the broiler production under one brand name Koy TUR - throughout Turkey. 27 A VBH investment is equivalent to about US$15,000. - 21 - which precluded most really small farmers. Overall, for both projects, it could be concluded that there was not a major impact on the smaller or poorer farmers in village communities, but that the supervised credit component did reach farmers resident in villages. Other Components in Livestock V 71. Animal Health. Although the disease control elements of the project were limited they did make important contributions in vaccine production for brucellosis, theilerosis and local FMD strains. The mastitis surveys provided geatc, . t -e incidence and characteristics of this disease in dairy cattle, including identification of staphlococci bacteria as the predominant causal organism which had resistance to most of the antibiotics available in Turkey at that time - 1984; supervision missions, however, expressed concern about the lack of knowledge by the field technicians and farmers concerning mastitis, especially with respect to the effects of a subclinical condition. 72. Artificial Insemination and Breeding. The project undcubtedly contributed to a substantial expansion of the A.I. service in Turkey in the important commercial milk producing areas. However, the very low performance being obtained by some insemination teams at the end of the project (para 45) strongly suggests that the whole scheme should be carefully reviewed to ascertain in which areas it is economically justified to make available a public sector A.I. service. Private sector A.I services have commenced and these should be further encouraged, while at least non-salary costs of a public A.I. service should be fully recovered. 73. Processing. The very low throughput of the TYT mohair plant indicates that benefits to date from this investment have been low (para 48). The plant has had to compete with private buyers for the greasy mohair, and also the Mohair Cooperative Association which is supported by GOT through the Ministry of Trade and Industry. Private processors also process tops and yarn. Cash flow and working capital problems have persisted since the plant opened in 1985, and it is likely that it will be privatized in the near future in line with the GOT's general policy on privatization; this should help the operational efficiency of the plant. Economic Rates of Return. 74. The PCR for the fourth project was unable to collate reliable data to provide an estimate of project costs, which reflects the breakdown in project identity which occurred with the institutional reorganization of 1984 (paras 33 and 99-101). It did, however, construct a farm model for each major type of subloan based on standard MAFRA data and estimated that financial returns and farm income were satisfactory, even though less than SAR estimates, for all except the larger imported dairy cow enterprises under the model assumptions. It then projected total production and concluded that milk was substantially lower but meat production was much higher than SAR estimates because of the eventual model mix which changed to a fattening emphasis. Despite the absence of figures representing total project costs, a brave interpretation of the subloan numbers into the same models yielded a 16% ERR for this livestock farm development project as a whole. - 22 - 75. The PCR for the fifth project d1d not attempt to construct farm models due to the lack of figures for total project costs and real data on farms (including farmer contributions and performance of the enterprises), but instead presented indicative models (again based on MAFRA data) for a 5-imported cow dairy farm and for cattle fattening (as the major subloan enterprises) and concluded that there were financially viable under the assumptions used. It consequently could not project an ERR for the supervised credit (53% of the Loan), and did not attempt to quantify an ERR for the other components as available information on GOT contributions was inadequate for reliable calculations. However, the A.I. and animal health benefits would be very much less than the 111% projected in the SAR which made generous assumptions on the production impact of insemination: in practice, an increase of 86% in A.I. teams (and, assumedly, costs) reached only about 26% of the assumed number of cows that wold be inseminated; allocating these percentages to the original component benefit and cost flows would give a negative ERR.28 The cancellation of the meat processing component (71.5% ERR in the SAR), and the very low utilization of the mohair plant (36% ERR in the SAR) would not have much negative impact overall as they each represented only 3% of the programmed investments. 76. In both projects, the final ERR depends largely on the impact of the supervised credit programs. Because well over half of this component was used for fattening enterprises, the sustainable economic impact of this type of lending must weigh heavily in the assessment. In this subcomponent, there was little "permanent" investment such as in production infrastructure, long-term fodder crop establishment or improvement in genetic potential which would or should continue to yield incremental returns. Undoubtedly, incremental carcase weight was attained on the sheep and cattle fattened under the program, and this resulted in financial benefits for the operators and their margin in economic values was also attractive. However, the question must be asked if the project resulted in livestock fattening which would not have occurred without the project. In other words, did the credit line under the projects permit an expansion of the national fattening program? 77. Such an impact could be measured if a change in the average carcase weight of slaughtered animals could be related to the project. No attempt was made in the PCRs to assess this. The audit examined available national data and arrived at the figures indicated in Table 12. The data are not stalwart or detailed enough to arrive at firm conclusions. However, in the case of sheep there does not appear to be any significant upward trend in slaughter weights since the project became heavily involved in fattening loans in 1984. In the same period, the number slaughtered has declined, which negates the possibility of the project providing more resources to maintain a slaughter weight for an increasing number of slaughtered animals. For cattle, there was a slight declining trend in 28 The targeted annual number of cows to be subjected to A.I. was 800,000; the actual number of cows would have been about 209,000 assuming about 1.5 inseminations per cow (para 45). As A.I. made up only 81% of the investment in this component (A.I. plus animal health) in the SAR calculations, the ERR would be higher than indicated in this simplistic derivation assuming the returns on health investments were highly positive. - 23 - slaughter weight with an especially low figure in 1986 which was associated with an abnormally high slaughter number, possibly due to widespread drought effects. Consequently, there is no evidence from national statistics which indicates that there has been a widespread increase in fattening enterprises yielding higher average weights (which may or may not have been associated with the project if it had occurred).29 78. Another possible measure of impact would be a quantified contribution by the Loans to a sustained increase in the fattening portfolio of TCZB. Table 13 indicates that there has been a rising trend in institutional short-term lending for fattening through TCZB since 1980 in the number of subloans, in the size of the portfolio in real terms and in the size of individual loans in real terms. This represents an increase in the volume of institutional lending for fattening, and cannot unequivocally be linked to an increase in the scale of fattening nationally. It does, however, strongly suggest that there has been more interest in fattening, probably reflecting a recognition that it was one of the lowest risk enterprises in livestock for farmers in the 1980s. 79. Tables 14 and 15 demonstrate the contribution of the Loans to the total TCZB fattening portfolio. There was a substantial 44% increase in the portfolio in real value terms in 1985, which was the year of greatest contribution by the two projects to the portfolio (21.5%), but the actual number of subloans declined in that year. There is not any clear picture from these figures which can verify the influence of the Loans on the total volume of lending for fattening. Over US$9.0 million of the Livestock IV Loan funds were used just before Loan account closure at end-1985 to retroactively finance fattening subloans made by TCZB in late 1984 and 1985, after MAFRA gave its ex-post approval of these subloans (para 33); this suggests that the Loans were used to a significant degree to substitute for TCZB's regular fattening subloan resources. 80. One possible argument in favor of -.pporting fattening in the original area of the fourth project is that it could promote fattening in the eastern zone which traditionally is a breeding and growing areas with most animals being fattened in the central and western zones closer to 29 The average carcase weight figures for cattle going through EBK represent a higher weight class of animal and a substantial portion of feedlot animals. These figures show no increasing trend during the 1984 to 1987 period of the projects, but there is a substantial increase in 1988. This was almost certainly due to a new EBK bonus system introduced for carcase quality and dressing percentage amounting to 3% or more. Such a bonus has an extended financial effect as it applies to not only the weight increase during fattening but also appreciates the value of the original carcase weight purchased for fattening. Hot Carcase Weight (Kg.) Year 1980 81 82 83 84 85 86 87 88 89 90 161 177 162 160 158 152 150 152 180 171 178 - 24 - final meat market. Although fattening in the eastern surplus areas before transfer to the west would provide added value to the product in this poorer region, there would not be any technical efficiency advantage as the cost of transporting a fattened animal to market areas would represent a higher final unit cost than transporting store animals; the only possible balancing factor could be a higher economic weight being given to the value of production in the eastern zone on regional income distribution grounds. 81. The foregoing indicates that for the fattening enterprises there was negligible improvement in the production systems through the projects, minimal incremental permanent investment, no verifiable direct connection between the Loan inputs and an expansion in fattening, and a likelihood that farmers (and others) will get in and out of fattening as profitability varies (because of the absence of an economic commitment asscciated with a substantial long-term investment in such an activity). Although an ERR could be calculated for the fattening enterprise in a one-year period, there is no guarantee of continued fattening under the circumstances described above. In the absence of a "permanent" investment, the investment funds are fungible after the short-term fattening subloan has been completed; subsequent use of funds is unknown. Consequently it is not appropriate to consider an ERR for the funds used in the fattening component and, therefore, for the projects as a whole because of the dominance of the fattening component. 82. The audit considers the overall development impact to be marginal and well below appraisal expectations. V. ISSUES AND LESSONS 83. A number of issues are raised in considering the design, implementation and outcome of the two projects. These include: (a) the emphasis given to imported dairy stock, and the logic of the purebred dairy cow program in the east, (b) the objectives of the A.I program, (c) the role of forage development in the projects, (d) the major revision of the Loans to finance short-term fattening, (d) the appropriateness of the poultry development concept, and (e) institutional development aspects of the projects. A number of these issues are affected by what the audit perceives as the lack of well-analyzed and clear, single livestock subsector development strategy.30 84. Imported Dairy Cattle. The importation of purebred dairy cattle was a major component in the first, third, fourth and fifth livestock projects. The rationale stated in the SARs for this program was "to form the nucleus stock for genetic upgrading through breeding." The assumption was that herd management, feeding and animal health practices which are needed to capitalize on this genetic potential would be also introduced 30 The audit on the third livestock project raised the following major issues: (a) the impact of the structural adjustment process, especially on cow imports, milk price and increased profitability of meat production; (b) the overestimation by the region of the economic benefits of the project; and (c) a suggested role for NGOs to provide an integrated approach in the dairy/sheep activities for smallholders and landless rural families. - 25 - under the projects. Apart from the Bank-supported projects, the GOT sponsored a major purebred cattle importation of over 50,000 head in 1987 to 1990 (Holstein - Friesian, Brown Swiss and Summental breeds) from Europe (mostly Germany) and the USA, which benefited from exporting country subsidies. These cattle have been distributed under a special credit program through TCZB (3 to 20 head) with a LT 150,000 GOT subsidy per cow in which the subborrower is expected to have adequate housing and feed resources to properly manage the imported cattle. The total cattle population and purebred and crossbred exotic dairy cattle numbers in Turkey from 1968 to 1988 are indicated in Table 4, and the relative contribution of the project imports to purebred totals are as follows: Total Dairy Purebred Dairy Cattle GOT 1987 - 1990 Purebreds Project Imports Program Imports I and III IV V 1968 26,700 1973 82,350 1978 270,400 13,823 1979-84 3,257* 1,225* 1983 655,000 1987-90 50,000 1988 1,048,350 * SAR targets were 12,500 and 7,500 for Livestock IV and V respectively. 85. When compared with the number of purebred cattle existing and reproducing in Turkey, the cattle imports under the Bank projects have not been very significant. Even if the SAR targets for Livestock IV and V _t 20,000 head had been imported, this would have represented only 3% of the total purebreds in 1983, and would be equivalent to only 5% of the reported natural increase in purebreds in tha 1983 to 1988 period. Although it can be argued that the average genetic production potential of the imported purebreds should be higher than the local purebreds if the procurement process was ideal, the audit considers that the supervised credit program could have been carried out without cattle imports (as did occur eventually for over 60% of the dairy subloans in the two projects), and without a significant negative impact on the milk output by subborrowers. This suggests that the appraisal mission may have erred in its judgement on the need for imported cattle, or that it was influenced by a need to have a high foreign exchange element in the project to justify a targeted Bank loan size within a policy which permitted lending only to cover the foreign exchange component of a project. It is true that at the time of appraisal cattle could have been imported with no financial detriment to the subborrowers (apart from any increased risk in receiving unadapted exotic animals) because of the inflated exchange rate. However, the Bank was already in a dialogue with the GOT in the late 1970s in which they were promoting major corrections in the exchange rate policy, which eventuated in 1980 and brought the domestic price of imported cattle up to their real value of almost double that of the local purebreds; this was to the detriment of subborrowers in the form of an excessive debt with imported cattle. - 26 - 86. In the case of the fourth project, the extent to which high input/high output intensive milk production should have been encouraged in its targeted production environment is questionable (paras 51-54); certainly, the plan to introduce 12,500 unadapted, imported dairy animals can hardly be justified under the production, management, service and infrastructural support circumstances of the eastern regions. Formulation of the fourth project within a logical national livestock development strategy would very likely have led to this component being smaller in scale for local dairy purebreds and an expansion of crossbred enterprises (as tended to eventuate in the project). 87. The A.I. Program. The issues here are the circumstances under which GOT should attempt to provide a public sector insemination service and to what extent should costs be recovered from the end-users, both of which are policy questions which should be addressed within a livestock development strategy. The target inseminations of 800,000 annually in the fifth project were very ambitious and represented close to a maximum possible figure under ideal conditions.31 This reflects MAFRA's policy of expanding A.I. to provide the service throughout the country. 88. It is desirable to have a situation in which milk (and beef) production is not limited by genetic potential. An A.I. service can contribute to the general improvement in purebred cattle and substantial improvement in crossbred cattle, especially if progeny tested bull semen is used, as the distributed semen should have a genetic potential for at least 6 tons of milk per lactation. However, for the great majority of cattle in Turkey at present and for the foreseeable future, such a high level of production could not be achieved because feeding or other management practices will be limiting factors. Under these circumstances genetic improvement through the use of locally available purebred bulls or even crossbred bulls of Brown Swiss and Holstein-Friesian breeds would provide adequate genetic improvement. Specialized dairy farms in high input/high output management systems do need a proven, superior genetic infusion as ran be supplied through A.I., but the only reason to attempt to use A.I. >r a blanket national program would be if it were cheaper than the commonly practiced natural mating system (or to overcome a severe sexually- transmitted disease problem, which is not evident in Turkey). With the current degree of infrastructural development, cattle distribution, farmer education level, and demonstrated inefficiency and budgetary problems (para 45) affecting the service, the cost per pregnancy through A.I. must 31 Cattle in the Maximum Target 20 Provinces Breeders Females Inseminations Local 2,355,000 940,000 x .20 = 188,000 Pure Exotic 1,254,000 502,000 x .85 = 427,000 @1.5/breeder Crossbred 443,000 177,500 x .70 = 124,000 739,000 1,108,500 - 27 - be much greater than natural mating in many areas of Turkey. 32 89. Artificial insemination is very advantageous and economical when applied in circumstances which can benefit from the superior genetic contribution. In such circumstances, recipients should also be able to pay for this service from the cash benefits obtained. The initiation of private sector schemes has already demonstrated this in Turkey. Current regulations prohibit direct recovery of public servant salaries for services such as A.I., and this has been the stated reason for GOT's reluctance to introduce charges for A.I.; this constraint to cost recovery could possibly be overcome by introducing a charge equivalent to salary costs which is then used to support breeding stations which provide bulls for distribution in areas not suitable for coverage by the A.I. service. However, an appropriate charging system cannot be designed in isolation of an agreed policy for coverage by the public sector A.I. service, as the unit cost will partially depend on this factor. 90. Forage Development. Both projects had the objective of major increases in farm-grown fodder; this was to be largely through the use of fallow land for fodder crops, but also through some reduction in cash crop area. In the fourth project, there was also an objective to improve pasture land productivity through fertilization and management. The basic assumption was that there should be less emphasis on concentrate feeding and more reliance on farm-grown fodder at a lower cost per food unit (SAR Livestock V, Annex 4, para 3; SAR Livestock IV, para 2.12). 91. The absence of farm monitoring precludes any direct quantitative assessment of the impact of fodder production in the farm development components. The general opinions of MAFRA and TCZB staff in the field were that there had been some increase in fodder production in the eastern region; that there was little obvious improvement elsewhere; that dairy farmers tended to grow more fodder crops, (especially irrigated alfalfa) than fatteners or small ruminant breeders, but still in insufficient quantities; and that the feed requirements for fattening enterprises had little influence on fodder production, as specific fodder crops did not normally constitute a substantial part of fattening rations as green fodder or hay. 92. National statistics for the period 1981-1988 indicate that there has been some increase in fodder crops, a decrease in fallow land (and an increase in pulses for grain production which would absorb part of this fallow land), a small but significant increase in fodder as a percentage of total cropped area, and an increase in alfalfa as a percentage of irrigated cropped area (Table 16). Regional statistics for the period 1979-1987 indicate that the major total and percentage increase in fodder crop area 32 Although Erzurum in the Northeast Region was not included in the Livestock V A.I. program, it is included in the national scheme. In 1989, three field A.I. teams working selectively in five districts each averaged only 15 inseminations per month (excluding the Veterinarian providing the service at Erzurum centre). In 1990, the coverage is being reduced to three districts and the number of teams increased substantially to nine. - 28 - has been in the two eastern regions,33 followed by substantial percentage increases in the Black Sea region and the central-south region;34 the central-east region was the only one to experience a substantial decline in fodder crop, while the Mediterranean region showed little change. The fodder c- )/total cropped area ratios present a similar picture (Table 17). Data for Erzurum province, which was an important area in the fourth project and was also subject to a concurrent Rural Development Project (Ln. 2094-TU) demonstrated an increasing vetch/cereal ratio which is consistent with greater use of fallow for fodder (Table 18). The statistics on total number of hay mowers and mower/tractor ratios support the emphasis given to fodder in the two eastern regions and in the Black Sea area (Table 19). The increase in mowers in the central-east region is inconsistent with the decline in fodder area. 93. Consequently, the assumptions made at appraisal concerning increased reliance on farm-produced fodder crop appear to have been borne out in practice in the east, where there is less competition from cash crops and a harder winter, but less so in the central and western areas where there is greater competition from cash crops (and where the commercial milk production is mainly located - para 2, Tables 1 and 19). The extent to which the situation in the east is due to the project cannot be ascertained, and is questioned somewhat by the big increase An the southeast which had little project activity and in the Black Sea region which had no project influence. The assumption that there would be any significant impact on meadow and common pasture land in the east was unrealistic; the fertilization of native pasture was still in the trial stage,35 and any improvement of common grazing land was fraught with major social and legal use issues which were not addressed in the project design. The assertion made in the PCR that greater use of concentrates and agricultural wastes reduced the pressure on communal pasture and, therefore, had positive environmental impact does not appear to have any valid basis. Overall, the assumptions concerning fodder production probably did not sufficiently take into account the circumstances of the typical farming systems in the project areas, especially for the fifth project, but, at the same time, the potential impact of the project in this aspect of production was limited by a less-than-planned technical advisory program in the projects (para 99). 94. Fattening Subloans. The audit has maintained (para 90) that there is no verifiable linkage of the two projects to an expansion in livestock 33 All or part of 11 of the 14 provinces in these two regions were included in the fourth project, but only 11% of subloan activity in this original project area was in the southeast (region VI) - IBRD Map 13432R and Table 20. 34 Six of the seven provinces in this region were included in the third or fifth project. 35 Some responses in dry matter yields had been obtained in fertilization trials, but animal production responses under practical management systems had not been measured, and any improvement in species composition was still in the early stages of identification of Medicago spp. and associated rhizobia which would increase fodder production and regenerate in the eastern Anatolian environment. - 29 - fattening, even though fattening was the major consumer of the Loan funds. This does not necessarily mean that the project component did not have a significant impact in incremental meat production. If, however, the Loan funds largely served as a substitute for TCZB funds which would otherwise be used for this purpose, the bulk of Loan funds would simply represent a fund transfer to the institutional banking system in the agriculture sector. While this may have been justified, it is quite different from the farm-development objectives of the projects (paras 16 and 20), and at the time of the project revision no analysis was made of the need for this type of infusion of funds or of its priority in use of external funds; this, despite active analysis by the Bank in that period of structural support to the economy and the agricultural sector. Such an analysis may well have resulted in a conclusion favoring such a transfer, and the Bank did show a desirable degree of flexibility in adjusting the structure of the projects when circumstances changed during implementation; it appears, however, that an objective of attaining Loan disbursement may have overridden the appropriate course of analysis in addressing these changed circumstances.36 95. Poultry Component Structure. The poultry component involving an NGO was an innovative concept and both the GOT and the Bank should be commended for their willingness to support the expansion of a non- traditional scheme which had been locally applied on a pilot basis. Although some VBHs and associated companies are already in a healthy economic condition, a number of problems persist and the medium/long term competitiveness and financial viability of the village farmer-based integrated model has yet to be demonstrated (paras 63-67). With the financial support currently being arranged (para 44) and continued technical and managerial support from TKV, however, the audit considers that prospects for success are good. 96. Assuming that the model is financially viable and sustainable, the justification for Government support in such a village farmer scheme and the logic of involvement by an NGO can still be questioned. The scheme involved a large GOT subsidy in the form of technical assistance (about US$3.5 million in technical assistance payments to the NGO spread over about 1,100 poultry farmers, or over US$3,000 per subborrowing family), as well as the interest rate subsidy common to agricultural sector lending. 97. Over the last two decades, poultry has been the fastest growing element of the livestock sector in most countries. This has largely been due to its suitability to commercial investment in which individually owned production units are vertically integrated into various efficient systems of input supply and output processing and marketing; the technology is well developed and only efficient units with high production coefficients can compete in a free market. The only argument for favoring a village farmer model is that it can be designed to specifically help the small farmer sector and so have social benefits. However, the requirements for economies of scale and production efficiency in a competitive market do not 36 The Bank may also be criticized to some extent for not taking a more comprehensive view of its program and project interventions and of changes in the economy; anticipation of the impact of the policy changes initiated in 1980 could have instigated an earlier review and revision of projects in response to changing investment conditions. - 30 - lend themselves to small scale production.37 The increase in VBH size of the project from 2,000 to 4,000 birds per cycle (obviously to spread overhead costs), the relatively high cost per VBH at about US$15,000 (representing a relatively capital-intensive investment), the financial difficulties caused by a very low equity investment by the VBH subborrower (also reflecting a capital-intensive investment by investors with little cash resources), the high technical assistance cost per VBH required to reach a reasonable level of efficiency (caused by the relatively small size and a lack of expertise by the individual managers) all support the contention that the type of investment is not ideal for small farmers.38 98. Despite the relatively small scale of each unit, the project has reached only about 1,100 producers39 who are still far from being able to manage the operation on their own and will need continued technical assistance. TKV, as the involved non-profit NGO, has and continues to put extensive manpower and financial resources into the scheme. In hindsight, it would appear that it may be more appropriate for an NGO such as TKV to focus more on undertakings which have a wider impact in numbers of rural families affected and which cannot be carried out by profit-oriented enterprises under regular commercial terms. The audit, however, must point out that it does not consider that the type of poultry unit development attempted in the project could have been carried out by public sector departments. The nature of the operation has created numerous problems which have not yet been fully overcome by TKV, but the audit considers these types of constraints would have been insurmountable if their resolution was in the hands of the public sector bureaucracy. The wealth of input-output and management/financial data available through TKV for the poultry component, in contrast to the dearth of data from MAFRA for other farm development components, is indicative of the advantages of the private sector in providing management guidance to commercial enterprises. 99. Institutional Development. The General Directorate of Livestock Development Projects (LDP) was originally created in MAFRA as an implementing unit for World Bank-assisted livestock projects. This was an attempt to provide a comprehensive service to livestock producers in all 37 The most notable change in the structure of the broiler industry in the USA in the last 30 years has been in the size of enterprises to take advantage of economies of scale; in 1960, only 5.3% of farms had a capacity of over 20,000 birds per cycle and produced 28% of broiler meat, whereas in 1990 about 55% of farms are in this larger size category and produce about 95% of total broiler meat; only 3% of farms have a capacity of less than 6,000 birds per cycle. 38 If the argument is accepted that an expansion in poultry production is more suitable for development in a commercial business framework (rather than being directed to smaller farmers at an economic cost for social reasons), there would be little justification for a development focus for VBHs and RPCs in the eastern provinces as they have no special advantages in input supply or market (para 64); the units in this area are currently experiencing financial difficulties and TKV is attempting to obtain concessionary finance to assist in this predicament (para 41). 39 Additional employment has, of course, been created in the input supply, processing and marketing activities associated with the schemes. - 31 - aspect. of animal husbandry and forage production (but not in other aspects of the farming system). It was the project coordinator in both the fourth and fifth projects and shared implementation responsibilities for farm development and services with other directorates general in MAFRA (DG Veterinary Services in both projects and with DG Animal Breeding in rhe fifth project) and with TCZB; LDP prepared farm plans as a basis for review and lending by TCZB. MAFRA was reorganized in 1984, and LDP was dissolved. The impact of the institutional arrangements in the projects up to that data was mixed: Problems arose in the quality of the services offered, in limited follow-up and supervision of farms, and in inadequate coordination with the veterinary service; supervision missions frequently commented on the inadequacy of LDP in promoting farm-grown fodder. The situation was worse in the fourth project because of the difficulty in recruiting and retaining suitably trained staff in the eastern provinces (paras 25 and 26). 100. Under the 1984 reorganization, a General Directorate of Projects and Implementation (GDPI) was created at the headquarters in Ankara, within which coordinators were appointed to manage each externally-assisted project. In the field, the ex-LDP offices and staff were merged into the newly created Provincial Directorates of Agriculture (PDA). The reorganization merged various separate extension services and decentralized decision making to the field level. Reorganization also consolidated several of the formerly separate field services of MAFRA (viz., extension, plant protection, veterinary services, LDP, etc.) in the PDA. A Projects and Statistics section was created with the responsibility for coordination (both within PDA and with TCZB on credit matters) of the special projects carried out by MAFRA/PDA in the provinces. Identification of farmers, farm plan preparation under the livestock projects and corresponding extension activities were to be carried out by the Village Group Technicians (VGTs) under extension supervisors with support from subject matter specialists and the Projects and Statistics units at the district and provincial level. In comparison with the previous setup for LDP, the responsibility for executing LDP's functions in the field were entrusted to staff who also had other responsibilities, whether in the Projects and Statistics section or at the village/farmer level (where the VGT had multipurpose duties encompassing the whole spectrum of extension activities in the villages assigned to him). This approach to national agricultural services was supported by the Bank in the form of the Agricultural Extension and Applied Research Project-Loan 2405-TU, approved in 1984. 101. This change reflected a common trend in many countries away from a project-specific support service to an approach which attempts to provide a comprehensive technical service to farmers within which specific public or private sector improvement programs in the farming community can be facilitated. The audit concurs with the desirability of this modification to achieve improved efficiency in support services, and believes it could have reasonably substituted for LDP services if the required emphasis was given to livestock services for subborrowers under the projects. Unforuunately, in the two years following the reorganization there was considerable uncertainty as to responsibilities. This led to a marked dotntilrn in on-farm planning and subborrower assistance and supervision activities by MAFRA until the end of the projects. Greater attention to this institutional issue by the Bank at the time of preparation of the extension project and immediately subsequent to its installation could have reduccd the negative implications in the livestock projects. - 32 - 102. If this new approach is properly implemented with trained personnel, it can offer the opportunity for the extension staff to adopt a whole-farm approach in helping the farmer address his production problems and opportunities, including an appropriate integration of livestock and crops in the farming system. One of the key elements for success in the new organization is that the "generalist" extension technician must be continually supported and trained by experienced subject matter specialists. An inadequate subject matter support service has been and still is a serious deficiency in many of the provinces adopting the program in Turkey, and is especially weak in the fields of practical animal husbandry and forage production. The relatively poor performance in the training component in the fifth livestock project did not enhance the availability of well-trained livestock production specialists (para. 49). Consequently, the benefits of the new approach and its ability to replace the advantages of a well-implemented project-specific service are likely to develop only slowly as training, experience and leadership evolve in the new institutional arrangements. 103. A common design element in the five Turkish livestock projects was the use of a MAFRA unit (LDP) to prepare farm development plans as a basis for all lending by TCZB under the projects. Although this may have been the ideal arrangement in that it theoretically encompasses relevant technical, financial and credit considerations, it is costly in manpower requirements, especially when each subloan amount is small. For larger medium- and long-term individual subloans, there is no reason why an agricultural bank like TCZB should not institute its own subproject preparation and review process and cost this, as necessary, into the lending charges.40 For smaller loans, it would not be cost-effective for a banking institution to prepare detailed plans tailored to individual small farmer circumstances because of the disproportionate manpower requirement to subloan size. However, the need for and validity of farm plans and cash flow analysis for smaller amounts of term lending to small farmers is very questionable; usually the total farm resource and income situation (including off-farm income) is not really taken into account, and the preparation of plans tends to end up as minor variations around a standard package in a series of standard forms. It is likely to be just as effective if the few key variables for successful implementation are agreed between technicians and credit officers, and then have the credit officers take these into account in assessing an application. This would leave the public sector extension service free to publicize the availability of credit to facilitate its farm improvement recommendations, liaise with and advise agricultural credit officers, and provide technical assistance to village farmers, including the subborrowers. Credit officers would carry the load of all subloan processing, review, administration and supervision/inspection. 104. Due to the lesser service in subloan preparation now being provided by MAFRA, TCZB has, in practice, expanded its technical credit 40 The PCR on Livestock IV also contended that the ability of TCZB to prepare and appraise farm development plans should be encouraged (para 5.07 in the PCR), and pointed out that this concept was being developed under the Bank-supported Second and Third Agricultural Credit Projects in Turkey. - 33 - officer cadre and is assuming an increasing role in doing its own farm inspections and plans as a basis for subloan review. In view of the institutional arrangements existing in the 1970s, it would have been difficult for the project designers to incorporate these principles into the supervised credit program and provide for a gradual transfer of farm duties to TCZB. However, it seems important that the roles of MAFRA and the credit institutions now be clearly defined, so that institutional arrangements and staff training can be undertaken to ensure that each entity does have a complementary role in promoting agricultural/livestock development and viable agricultural credit operations by the banking system. 105. Livestock Strategy. The audit has made various references to difficulties and concerns associated with the absence of a detailed and integrated livestock strategy for Turkey - cow imports (para 85), location of purebred dairy enterprise (para 86), the scale of the A.I. program (paras 88 and 89), and poultry development (paras 96 and 97). The fourth project did finance a milk industry study. The fifth project design did not include any subsectoral studies, but did require the formulation of a National Livestock Improvement Plan to determine the appropriate balance between artificial and natural breeding. It also financed (by a Loan Agreement revision) a "Livestock Products Development Study" by a joint British/Turkish consultancy for the State Planning Organization in 1983 which was directed at long term plans for meat, milk and animal feed processing. However, in retrospect, a thorough review of the subsector could have provided a more appropriate design for the fourth project in the eastern regions, and would have resulted in modifications to the interventions supported in the fifth project. 106. With the changes in economic climate in Turkey after 1980, the Bank reviewed the implications for its three ongoing livestock projecLs (III, IV and V) in 1982 but did not broaden its analysis to overall sectoral implications. With mounting problems in the livestock projects, the Bank undertook a subsectoral desk study in late 1985 and included a subsectoral analysis and strategy note in its mid-term review of the fifth project in May 1986.41 The Bank suggested after the review that US$0.5 million of the technical assistance Loan funds could be used to support the formulation of a national livestock strategy under a Steering Committee and Secretariat, and with periodic support from Bank missions. 107. During the rest of 1986 and in 1987 and 1988 the Bank repeatedly stressed the importance of the subsectoral strategy study. In late 1986 GOT engaged a number of MAFRA staff and local consultant to cover specific topics in the subsector, and subsequently local university experts were engaged on economic aspects. In late 1988 the Bank was presented wi.' a series of translated papers which were to constitute the subsectoral strategy. However, the papers were more of a technical than strategy nature, were often descriptive of MAFRA programs rather than analytical and evaluative, and were not linked to policy objectives nor integrated into a clearly defined strategy. The projects therefore closed without the preparation of what could be termed a subsectoral strategy which could be used as the basis for further Bank support. The audit mission observed that many MAFRA and TCZB officials were of the opinion that the livestock 41 Closing Date for Livestock V at appraisal was 6/30/1987; actual was 12/31/1987. - 34 - subsector would grow "if GOT provided adequate subsidies--to enable sufficient profitability. " This attitude appears to be a carryover from the period of heavy government intervention through subsidies, parastatal investment and services and controls, and is not in line with the current GOT objective of encouraging greater self reliance in the industry and responsiveness to market conditions (par& 12); this further emphasizes the need for a clear livestock development strategy. CATTLE AND BUFFALO POPULATION BY TYPE: TURKEY 1988 ORDER OF EXOTIC BREED INFLUENCE 1/ AGRICULTURAL PUREBRED EXOTIC DAIRY OTHER REGION 2/ EXOTIC DAIRY CROSSES CATTLE BUFFALO GRAND TOTAL 1 2 3 I 152594 499636 970718 105886 1728233 BS HF J II 284999 622348 581981 4946 1393023 HF BS J III 158825 489698 228896 33127 857948 HF BS i IV 75842 8182683 527894 4841 923846 HF BS i V 64426 838111 1446538 85651 1873828 BS J HF VI 17801 96921 1328439 86551 1473712 eS HF i VII 128f74 802281 1321377 167645 2419367 J BS HF VIII 87884 289541 1388411 9185 1536921 BS HF i IX 89229 297828 552997 28417 983471 Bs HF i TOTAL 1948354 3675867 8843161 592M67 13169129 BS/HF - J EXOTIC DAIRY BREED MIX us BRN SWISS HOLSTEIN FRIESIAN JERSEY TOTAL PURE CROSS PURE CROSS PURE CROSS 40099 1,641,219 531,882 1,350,513 116,373 693,875 4,623,961 I/ BS: Brown Swiss 2/ IBRD Map 167868R HF: Holstein Friesian Jt Jersey Position 1 represents the highest order. Source: Provincial Data from MAFRA I - 36 - TABLE 2 SHEEP AND GOAT NUMBERS - TURKEY 1988 MERINO ALL ANGORA ALL SHEEP AND REGION 1/ SHEEP SHEEP GOAT GOAT GOAT 1 675,896 5,838,251 1,323,459 1,852,444 7,690,695 2 319,767 4,199,354 11,977 2,210,865 6,410,219 3 183,881 1,620,540 254 375,922 1,996,462 4 5,809 3,630,685 661 2,740,871 6,371,556 5 15,146 7,238,672 1,367 528,574 7,767,246 6 141,300 10,614,176 131,430 2,850,821 13,464,997 7 8,642 2,139,416 110,166 322,437 2,461,853 8 - 4,398,520 602 931,316 5,329,836 9 157,305 6,851,608 246,935 1,021,096 7,872,704 TOTAL 2/ 1,507,746 46,531,222 1,826,851 12,834,346 59,365,568 1/ IBRD Mi. 16766R 1 The totals do not exactly correspond with the official total statistics which is obviously due to transposition and/or compilation from provincial data. However, the figures do convey the regional distribution of smallstock. Source: MAFRA provincial data - 37 - TABLE 3 TURKEY POULTRY POPULATIONS 1987 Hens and Cocks Eggs Produced Region1l '000 million 1 7,436 770 2 15,317 2,442 3 8,479 916 4 7,061 441 5 2,120 148 6 3,478 230 7 5,314 480 8 3,705 248 9 5,130 638 1/ IBRD Map 16766 Source: Agriculture Structure and Production 1987. State Institute of Statistics, Prime Ministry, Republic of Turkey. IREY Cattle Numbers 1968 - 1988 Brown Swiss Holstein Friesian Jersey Other Total Pure I Breed Pure I Breed Pur X Breed Cattle Cattle Buffalo 1968 18,868 6,369 1,659 12,877,448 13,621,322 1,079,438 543,388 70,751 102,839 1973 50,208 25,417 6,729 11,857,319 12,092,452 1,042,686 822,115 194,492 136,172 1978 148,071 103,698 18,635 12,824,365 15,039,429 1,037,608 1 1,200,309 393,544 350,807 1983 309,122 283,909 61,978 10,508,280 14,093,474 762,985 1,606,778 774,885 548,504 1988 400,099 531,882 116,373 8,057,589 12,685,056 502,073 1,541,319 1,340,513 693,875 Source: MARIA TURKEY NUMBER OF SUBLOANS UNDER LIVESTOCK IV: LOAN 1586-TU Actual Operational 11/Q5 Appraisal Actual Actual Origi.al Livestock Estimate Operational Operational Proje.t III for 12184 12182 9184 Area Area Total Total Subprojects 5200 1250 1537 2273 1530 3803 Types of Enterprises Sheep improvement 2700 751 951 1001 42 1043 Beef cattle improvementl/ (a) Cattle breeding 500 223 308 - (b) Cattle and sheep fattening and also cattle breeding 8282/ 828 (c) Cattle and sheep fattening 1358 1358 Imported dairy cattle enterprise 5 Cow 1500 115 118 130 72 202 12 Cow 400 90 99 248 44 292 30 Cow 100 71 61 66 14 80 11 Fattening subloans were included in the project in 7183 and the area expansion was accepted in 8/84. V Although TCZB records do not differentiate, most lending for "beef cattle improvement" after 9/84 was for fattening of cattle and sheeg. - 40 - TABLE 6 TURKEY ALLOCATIONS AND DISBURSEMENTS UNDER LIVESTOCK IV: LOAN 1586-TU --------------------------- USS000--------------------- Allocations Disbursements at Account Appraisal 8183 9/84 Closure Original Project Area Imported livestock (a) Small farmers 5,500 500 500 436.0 (b) Small and other farmers 7,000 3,500 3,500 3,210.9 Farm machinery and equipment 2,000 1,600 1,600 1,699.2 (excluding items procured under subloan) Forage production and supplementary feedstuffsl/ 4,500 Subloans (excluding items other categories) (a) Small farmers - 5,000 4,000 3,762.2 (b) Small and other farmers - 8,400 6,400 5,637.5 Technical services, studies and vehicles 2,000 2,000 2,000 1,057.5 Additional Project Area 2/ Subloans (a) Small farmers - - 1,000 1,038.0 (b) Small and other farmers - - 5,000 5,028.2 Unallocated 3,000 3,000 - - Cancelled - - - 2,130 Total 24,000 24,000 24,000 24,000 1/ This category was modified in July 1983 to include livestock fattening and to broaden the coverage of subloan reimbursement. 2/ This category was added in September 84 to include the areas previously serviced with subloans under the third livestock project. - 41 - TABLE 7 TURKEY NUMBER OF SUBLOANS UNDER LIVESTOCK V: LOAN 1862-TU Appraisal Actual Actual Estimate Operational Operational for 12/86 3/83 1989 Dairy farms 1150 132 450 (748)1/ 5 Cow 600 5 Cow 107 356 (554) 12 Cow 400 12-15 " 13 98 (148) 20 Cow 100 20-30 " 12 26 (46) 30 Cow 50 Cattle/Sheep fattening - - 11,0932/ Crossbred cattle breeding (10 cows) 600 5 n.a (844)3/ Marino breeding (50 cows) 300 24 568 (628)4/ Angola goat breeding (100 does) 250 3 360 (554)5/ Poultry production units 600 75 980 (1055)E/ +107 parent stock houses Regional Poultry Centers 12 - 11 (12)7/ Imported cattle 7500 893 1224 81 1/ The figures in brackets represent the number of loans made to end-1987; this implies a dropout/cancellation of 268 dairy enterprises. 2/ TCZB registered incremental subloans of 556, 5218, 4706 and 613 in the years 1984 to 1987 respectively. 3/ The 844 figure is obtained by subtracting the dairy subloans from the total credit delivery for dairy and cattle breeding enterprises. 4/ 59,000 merino sheep were financed; there were 628 subloans made, implying a drop-out of 60 enterprises. 5/ 5,300 angora goats were distributed; there were 554 subloans made, implying a drop-out of 194 enterprises. 6/ The Erzurum RPC which was servicing the poultry units in Erzurum and Erzincan has temporarily ceased operation since August 1989 because of unviability associated with financing and feed quality problems; hence 70 poultry houses were demobilized until problems can be overcome. 7/ In addition to the 12 RPCs, there are three loans for pare.it stock houses associated with day-old chick production, and one for a grand parent stock company; there is also a single marketing company. However, four of the RPCs still did not have the required local cost and working capital loans to complement the equipment procured under account at end-1989. 81 A further 3912 local purebred cattle were distributed. n.a. not available. Source: SAR, supervision reports, PCR and TKV reports. TURKEY ALLOCATIONS AND DISBURSEMENTS UNDER LIVESTOCK V: LOAN 1862-TU -----------------------------US$000------------------------ Allocations Disbursement Atraisal 11182 07183 At Account Closure * Livestock and semen imports 12,310 12,310 5,000 4,091 * Machinery, equipment and vehicles (excluding items procured under farmer subloans) 18,980 18,880 10,000 16,938 * Civil works (a) LDP staff housing 225 225 500 - (b) Mohair processing plant 120 120 250 240 ----------------------------------------------- (c) Grandparent poultry stock farm 11 300 301 * Subloans (excl. items in other categories) / (a) Inputs for ruminant livestock milk/breeding enterprises 725 725 3,217 -------------------------------------------------------------------------- (i) Short-term for livestock fattening 11,216 (ii) Medium-term subloans . - 14,680 2,433 (b) Inputs for poultry subloans 3,370 3,370 10,000 6,225 * Consultant services3i 4,235 4,235 4,235 5,476 * Training foreign4 1,035 - (a) Training by local nationals for farmers and staff involved in the subloan components - 100 100 41 (b) Foreign training - 935 935 842 * Unallocated 10,000 10,000 5,000 - 51,000 51,000 51,00011 51,000 1I This category was modified to include the grandparent stock farm as a MAFRA investment which was originally to be funded as a subloan. 2/ This category was modified in July 1983 to include livestock fattening and to broaden the coverage of subloan reimbursements; US$3.2 million had been disbursed by 7/83 under the original description of category 4(a). 3/ This category was permitted to finance a meat, milk and feed processing master plan by an 11/11/82 amendment. 4/ A modification on 11/18/82 permitted 100% financing of a limited amount of local training to 6130/83, and or further modification on 4/5/84 extended the deadline to 6/30/85. - 43 - TÅRLE 9 Page 1 of 3 TECWCAL k VARcm COEmCTI'S OF EACI Vil11 19n7 1998 AND 1989 mållEa F2~011 salta of 1~ al ad Fiuacul faramters i on tit 1t ttll ERIA11 A falwat EIXlISIR lit01I 10SE [ nma ff13Ra 101611 10TAUAIM 1.1 . 1.2.187 11iK81 t i fiatL F IMAISE Flc9s touletd 274 311 342 13 26 42 439 210 469 720 191 3.882 a".gw kics Per Flodt ~laatvte 3.395 3.186 3.195 3.68 4.423 4.462 3.138 4.131 4.183 3.213 4.123 3.14 yotal tie kroillri *rdced 0 2.11.274 2.279.11 2.3Tä .803 587.347 1.911.335 2.611.142 2.110.746 1.115.861 1.1t4.22s 311.612 1.48.64 25.118.521 Liviter rce kr Fhd 14M1FOd '.34 6.764 1.150 1.014 6.642 '.031 5.901 4.148 1.214 .441 1.719 6.36 Feed teers ie istie I .ro 2.:50 2.1~ o f.t0 2.130 2.11 2.2 2.2 2.16 2.20 2.213 feiot hai pr 9$ !' 31.!3 37.3 33.09 35.57 38.33 k.4 35.91 37.31 12.33 3.1 31.23 uta t eeeight ter lite LI tTr 4.2. :.!l 1.203 1.311 1.778 1.413 !.6 . . 1.113 3.11 .141 1.1%1 1.0 MitalitI 3.70 4.25 4.82 4.j 6.85 6.M 10.st 3.31 4.34 3.9 4.93 6.34 g et iietio neea 32.40 4.51 48.36 al.M 44.98 48.60 A6 A9.41 48.31 41.68 1.32 48.43 Pric d 81fe.041d Chic 1UbId :'M.it r3.39 211.13 2717.4 214.82 262.31 244.16 211.49 256.45 268.ef66 .4 264..2 1Pri1 .f 1e!? .U"s !01.6 13.1 12.46 2W.6 21.0 201.14 199.62 112.95 11.38 M18.11 1.51 13.14 tomes t~ u ter od fuFlod 351.3 112.148 220.8! 11.33 81.11?7214.15 241.121 36.168 Ir1.-16 v11.118 13.Mn 2ma.5 käirap f kb ai kr flod TUflc" -.544 61.l 671.212 814.431 121.894 16.a2 314.tl 6g.21 164.81 :41.439 m3.m 63.21 Aeern s lnete ar .',.t MXct .138.33! 13.SI 19!.374 l.5V.S! 108.16 1.9115.11 822.8139 735.195 21.41 181.513 1.136.953 18.113 nuE (0i Cf LifE 3RO!RM! f54I.. 7.91 1'.93 141.84 630.51 I0.!3 614.26 614.9 03.9 698.31 67.3? 133.31 3s.54 01.91 T-ld .01:a: TLUM-Lire.Ir X!2.12 :0.3c 9!.? M!!.3 12.4 11 1164.9 11M.8T 141.13 153.33 14.91 113.11 Fe' 444.:1 .14.4 417.8 437.11 41M.11 408.13 421.9 441.1 444.16 436.11 437.86 441.93 TV1iatic 3UlTie.r m2.14 !.7? 9.93 .fI 11.11 14.63 11.43 16.82 38.1t 6.01 R2.21 11.81 em00er ttsU19-Uw*• 3 23.18 21 34.41 11.63 21.21 7.11 19.182 ..16 28.2 18.03 26.89 I1.82 In gi- 3 IUIe.tiet-. 21. 1.1? 20.4 2.21 21.3$ 21.31 21.04 21.7 21.41 28.38 21.51 21.28 MM8. finia11 101 1t0.8 132.1 188.8 ffl.2 188.8 182.88 .M 1101 1al.18 11. i. MJB MD 1313 a.n8 3IN.A a'.3*MOsis 1 . 22. 3.3 2.31 22.: 23.96 15.2 24.19 21.35 24.a1 21.31 2.31 he 61.19 å4.11 46.3 1.11, 13.83 3.33 6.i4 4.3 4.2 3t.4 19.41 61.81 M ~ z iatiu l 22 1.1 1.3: .43 1.1 1.32 2.24 1.13 2.41 4.43 .5 1.1 2.3t t tests t 3.11 .31 5.48 2.36 3.18 1.0 3.06 4.11 s.28 .0I 4.8 3.41 lit C¥dC. 3.12 !.:i 3.:1 .:2 3.l! 3.2I 3.2' 3.1 3.1 3.2 1.27 3.24 fI1E CMI.tl% cE 111 ui 3 Tliti IU e-8r L m1i01 6I.81 2.14 3.YN 9 17.315 61.68 633.81 153.1? 414.66 6'. 636.13 688.63 nsU*Tt m muff 3U 1g.i.r 151.80 126.31 119.18 IC.21 111.30 143.11 19.33 1l.e8 126.15 143.81 141.68 134.13 TITee W *.................................................... ......... ~ ......... n0lttill NOxi1 Anelts of leckaicel and fisancial omill to0o 1l11ARIIA luln Efa1Ka I E11113018 EClt fullfö1 3CEL, 385511 1061 i 0 TTAT E [OTlIIAASE 191 1.1 • 1.1. an IECINICAt I FlINCIAL PARAItIIEI flVk$s CoRleled Nuber 329 3 es 313 391 203 189 410 81 449 24 451 345 4.t 3.002 ,8.91 NY.010 Chicks Per flock uattity 4.171 3,248 3.993 4.056 4.115 4,154 4,815 3.616 4.072 4.217 4.414 4.28 3,884 8.32 1013 Lift Iroflern Produced I ( 2,461.127 2,0159.18 2,048.534 2.583565 1,219,219 1,21,892 2,860,116 6,291.192 2.680.349 1,30,10t 3.442,19 2,6ä,43 1,111,94 25.018,521 : .0 tiwt Broilers Produced Per flock g/Flock ; 1,81 5.350 6.545 6,95 6.361 6.493 i,j6 6,414 5.715 7.301 1,632 7,132 6.606 6,596 0.15 leed Conersion patio latio 2.213 2.40 2.360 2.190 2.310 2.350 2.210 2.26? 2.380 2.240 3.13 2.301 2.293 2.213 3. beight Gain Per 0ay Graahy 38.23 31.04 34.59 35.55 3.4 32.6 31.13 35.61 33.3 36.19 I.3A 35.94 35.54 31.25 -4.59 sverage Live meiht Per Bird ILive-ird 1.992 1.188 1.338 1.618 1.694 1.710 1.341 3.li 1.585 1.801 1.818 1.193 .170 1.305 -1.94 oer'ality : : .25 5.99 s.00 1.69 6.16 8.48 1.30 4.19 10.8 1.47 5.72 4.11 t.3I 1.34 -3.05 #ge of Oepletioa Days 52.11 54.08 50.25 47.76 52.28 52.36 48.80 49.13 41.60 48.21 41.62 58.00 49.83 40.15 2.81 frice o ay-Old Chics Illctc 420.45 422.65 400.85 406.34 38.39 375.89 406.15 316. 1 361.66 449.73 411.39 39.50 398.22 203.12 55.09 frice of feed tillg 345.W1 342.36 367.17 367.41 369.19 359.60 355.03 340.49 351.34 313.13 312.55 355.64 358.08 119.14 79.21 : Aterage gross Haroia hr Flock filflock i11,161 116.134 .202.416 153.488 -44.714 .567.502 227,154 300.131 -41.900 -23.370 -151,94 102,435 92,845 208,033 -55.31 ivetage fed lubsidf ter Flock It/flock 52.1761 '213.329 55.8l 435.308 65i.565 447.267 502,544 384.980 389.173 411.933 561.372 541,712 468.33 60,552 -31.18 Average Gross Incot Per flock IlLfloct 1.145.534 550.06! 31.319 !31.591 3I.851 19.?1 130.293 65.653 341.218 453.855 416.211 650.205 56.220 I5.55 -36.f4 PILK COSI Of (19l IRCILEMS PIIIEB. ARO-6et 1,125.9 1.15e b 3.2 .1 6.142.9 3.282.1 1.1'9.9 1.101.1 1.!.1 1.322.9 1,19.8 1.81.2 1.142.0 1.139.3 ' å1.01 13.40 Day-Old Chich' IIgLuv-ftr 234.45 256.58 244.4 249.58 289.8 240.5 338.19 212.40 211.66 270.60 233.89 235.63 23Li 153.,? 56.11 feed Kllib-bi 8r* 801.28 480.58 9?3.08 80.65 310.31 851.4 192.51 112.01 142.2 83.34 862.52 830.30 124.54 445.93 84.90 ledication Lßg-Live-Ir 24.91 15.41 31.83 32.81 9.5 36.23 1.5 9.49 69.64 23.16 33.51 14.64 1.8 :.3 2.33 otner CoSts ILßL-tLin-fr 18.91 8 31.16 44.95 26.11 46.32 19.18 33.31 21.0 28.531 21.46 35.1 32.52 22.82 42.51 la Tiboldies Ilig-tiv-Ir 26.31 25.95 36.12 25.1 25.32 24.55 25.05 23.81 25.59 20.86 25.01 15.1 3.25 21.28 f18. finCi C01 0 till I1 PUSCIO. ~ liog 1 0 108.0 8 180.00 100.00 .00.00 I 09 9.8 10. .0 0 100.0 10000.03 100.00 1 0 30.88 10.004 100.03 100.3 .... .... .... .... ...l... ......... ......... ..... ...... .....l .... .... Day-ol Chick$ t 28.82 22.15 20.20 21.8. 20.71 2.40 21.52 20.21 21.11 322. 2.10 21.13 20.91 23.31 | .1 ftej 8 11.11 14.28 12.11 1.34 14.11 12.21 11.51 13.45 11.81 1.33 12.53 13.16 12.93 61. 6.63 . ledicatio 8 2.1 3.34 2.60 1.12 6.10 1.38 J .684 l.3 1.01 1.18 2.82 1.31 1.51 2.30 -3.42 other Costs 8 3.46 8.40 2.33 .03 2.23 3.92 5.11 3.61 2.31 2.40 2.48 5.33 2.01 3.11 .33.82 lag mineiding, 11 2.34 2.24 2.11 2.23 !.11 2.38 ?.21 2.21 2.32 2.19 2.19 2.23 2.22 3.24 -31.12 Sn-8 ELLA PRit ICE Dlle $ nILtß- il g r 1.111.44 1.210.30 1.119.54 1.166.13 1.134.31 1,491.51 1.113.12 1.891.92 1.165.56 1.116.44 1.169.40 1,j5t.II 1,153.34 686 4 ro-sil =61 u ll If#g.Iel-r 133.1 12.82 5..61 19. 5 3.3 6 3.93 12." 104.61 10.02 6.11 64.1 4.54 91.1 3 4 138.151 .6.93. *.......J ........ MOR P080 IOIOI0 E184t/Affi. 8816E808 OIitI ACi3l1t nlts of lechical 44 Financial Farfatters , litt8 8i1n IfoUi I ol11 10 ( 3AI1 ERIIU Ete= 1E313 ICEL $An3m1t 8014 3i31o 10IGT E13 89 Biet 198 190 1 1.1 1 80.1181 1 .1 5-i 1-1 8-2 1 - 31 ... ............. ... . TIC¢RI¢t & FItNIAL PNElTR 41 3748C8 19 29INIl 08385103 :.6 .2 .1 . flocks Completed #uaber 233 121 275 360 155 148 434 345 314 288 19 252 1.281 1.665 6.126 4.18 5.002 kl - Old Chicks Per flock Quantity 4,638 3,5118 4.146 4.163 4.123 4,21S 4.10 3.11 4,209 4.445 4.11 4,518 3,991 4.86 4.801 3.111 3.884 lotal lite Broiler Produced los 2,314 3.17S 1.195 2.415 938 628 2.133 5.485 2,331 2.081 3.97 1.648 8.356 37,234 41.61 31.12n 25,079 tita Brollers Prod.Per flock Kg.flock 8.389 $.M 6. 6.521 6.708 6.058 1.13 .036 6.461 6,249 1.222 1,238 6.541 6.482 6.661 6.802 6.66 6.556 feed Conversion Ratio lio 2.8 2.24 2.35 2.16 2.38 2.46 2.12 2.18 2.24 2.18 2.25 2.29 2.15 2.22 2.21 2.28 2.21 leight Gasi Per ay Gran 1 Day . 5.1 5 36.28 35.63 35.12 33.9 31.36 38.4 38.25 35.10 36.51 35.61 31.53 .49 36.45 36.5 35.0 37.25 Auerage Live leight Per Bird Igliive-lird 1.964 1.821 1.126 1.691 1.695 1.611 1.025 1.838 1.658 1.786 1.116 1.590 1.043 1.168 1.153 1.183 1.805 fortality 1 5.91 S.83 6.24 6.32 10.74 12.14 4.93 4.62 1.50 6.31 4.56 6.68 6.04 6.8 5.82 6.21 63 Age of uepletion 5ays 10.94 50.19 48.44 40.5 50.82 51.56 47.5 4.35 46.24 48.83 48.11 40.43 45.21 48.31 48.92 49.81 48.25 Price of aV - Old Chicks Il/Chics 683.12 114.81 659.19 658.41 610.32 628.82 692.05 602.85 613.63 116.1 678.17 431.55 76.63 658.06 157.1101 398.22 260.12 Price of Feed 11Kg. 628.45 651.08 684.86 482.31 622.3 522.85 664.63 596.30 610.41 682.12 012.45 659.13 15.99 648.14 649.0 358.08 199.14 iver. Gms largin Per flock l/Flock 1,874,132 649,176 $3,495 611.093 .381.241 -26.414 803.148 856,442 304,428 290.225 359,835 55.509 1.233.165 691,030 1,837.610 92.845 288.033 Iver. fed Subidy ter flock IL/flock 0 8 1 8 8 1 8 4 0 1 0 8 0 8 468.363 680.552 ANer. Gross Incoe Per flock Illflock, 1.814.132 649.106 53.495 611.093 -301.241 -265.414 803.16 8.442 304.428 290.229 591.831 55.509 1.233.165 61.039 1.031.610 561.208 88,595 ilNE C0I Of 11E BROILEU1 teOICE fii-GATE 1.949.5 1.999.95 2.215.02 2.009.26 2.061.94 1.834.85 1.941.42 1.753.351 1,907.73 2.914. 2.192.21 2.126.20 2.186.90 2.030.19 2.023.45 1.139.28 657.00 Da - ld Chicks |IL19 - Lise 376.82 418.74 410.31 403.08 401.53 44.61 316.88 346.20 401.65 433.45 449.53 448.18 414.34 414.30 445.15 239.11 153.1 fud |lig - Life 1.353.45 1.445.11 1.624.58 1.481.21 1.512.83 1.285.11 1.421.81 1.184.32 1.491.8 0.499.30 1.688.81 1,523.0 1.644.40 1.415.54 1.434.21 824.54 445.93 klication Il/ig - Live 42.34 31.81 51.23 21.46 25.23 34.01 10.55 11.27 1.4 43.21 52.07 33.58 18.23 1.68 35.51 1.86 83.38 ther Costs il - Liv 93.31 0.80 86.28 59.2 4.92 38.51 61.04 1.12 6.14 54.48 1.51 84.25 .08 44.91 56.46 32.52 22.82 i finholdings IL/Ag - Live 43.63 44.24 46.1 44.30 42.23 37.16 43.29 39.03 41.38 44.42 41.11 44.43 419.92 44.80 52.83 25.25 21.281 IIIMCED.FORB•A -Gö 1005 t 10I.BO 100.00 108.80 160.00 100.00 108.114 1041.011 too.011 1011.80 100.0 194.80 L00.9 140.19 too.fi 190.08 JOO.GO 19.89 f. . . . . . f..... .. ... .... --- .... .... ...... . . .. ...........f---l- --- --- ..... ...- --- ea ld Chicks t 19.33 20.14 IM.S 20.06 19.16 24.39 20.38 19.15 21.05 20.89 18.41 29.18 21.69 70.43 22.08 20.99 23.31 fed f.48 14.26 1.16 13.12 13.53 10.14 13.81 14.16 3.4 2.6 3.9 11.63 75.19 13.68 70.88 17.51 . kedication 6 2.11 1.50 2.31 1.00 1.22 1.86 8.4 04.41 1.30 2.09 2.38 1.60 0.83 1.46 1. 6 1.50 2.10 other Costå 4.19 0.08 1.19 7.11 3.63 1.61 3.19 2.11 1.93 2.63 Let8 3% C.om 2.21 2.11 7.15 L. fix fieoldipps 1 2.24 2.51 2.13 2.0 2.05 2.85 2.11 2.1 2.f4 8.15 2.11 21.1 2.21 2.5 2.22 3.54 FARA - GiEl SEttING PICE f11 9 - ive 1 11.48 1,106.46 .223.20 2.109. 1 2.011.15 1,118.11 1.061.8 1.190 1.9 .45 2. 2 .3.15 04.65 15.1 2 3.9 1 1.00 t.o1 6 6 . ....................... ........... ...........-- - - -.. .. .. ---- .... . .--...... . -.. --------------.. OfA 1- G0810E :R11 A1Gs l9 - tive 1 2.1.1122 106.56 2.2.22 ..10 0.40-1.19 -,46.00 2.10.56 3,52.001 5.5 .0010 2.40.0849 2.49 2.30.3 2.83.5 652. 550 85.5 13363 2 - 46 - .ABLE10 TECHNICAL AND FINANCIAL PARAMPr'"rRS OP "1He: 1984 - 1989 1T84 1985 1986 1987 1988 1989 TECHNICAL PARAMETERS Day-Old Chicks 000 8.216 11.695 15.092 18.970 23.147 Mortality : : 7.29 5.61- 6.34 6.21 6.00. Weight Gain Per Day Gras/Day 34.51 35.79 37.25 35.56 36.45 Age of De:letion Days 51.00 49.74 48.45 49.78 48.31 Feed Conversion Ratio : Ratio 2.47 2.41 2.21 2.29 2.22 Average Live Weight Per Bird: Kg/Live-Oird: 1.760 1.780 1.805 1.770 1.761 Live Broilers Produced Tons/Year 7.514 13.213 21.070 26.608 31.119 37.734 Feed Consumed Tons/Year : 32.636 50.779 5.804 73.125 83.769 .................................. ..............------------------------------ Corresoonaing PACKAGED BROILER MEAT Tons/Year 5.786 10.174 16.224 20.488 23.962 29,055 :- -,------ - ---......... ....................................... w................... FINANCIAL-PARAMETERS. Price of Day-Old Chicks TL!Each 116 131 172 291 398 658 Price of Feed (t) TLIK9 82 103 i38 207 358 649 Price of Live Broilers IKo 319 385 486 710 1.153 2.134 Price of Packaged Meat IKg 467 559 723 1.093 1.755 3,140 Exchange Rates TL/USS 365 518 669 856 1.416 2,123 TL/DN .128 179 311 478 808 1,195 UNIT PRICES IN FOREIGN CURRENCY Chicks US-cents/Ea 311.81 25.33 25.65 34.04 23.12 31.00 Feed US-cents/Ks 22.47 19.92 20.64 24.16 25.29 30.56 Live Broilers US-cents/Kg 87.33 74.37 72.64 82.99 81.45 100.52 Packaged BroilerTeat US:/Ka 1.28 1.08 1.08 1.28 1.24 1.49 Chicks OM/Ea .0.91 0.73 0.55 0.61 0.49 0.55 Feed ON/Kgo 0.64 0.5C8 0.44 0.4k 0.44 0.54 Live Broilers DO::; 1.49 .15 1.56 1.9 1.43 1.79 Pa:kaLed B/Kilrme:t 9F: 4.65 3.12 3.3,140 : .;65 218 669 856 141 ,123: (: ) The Government rovidd 20% subsidy in 1986 & 1987. and 29% subsidy during the first six months of 1988 through rebates. Prices stated in the table above are gross rt s 1986-88 before the subsidy rebates. Source: T V . 깅 . . & & 볍7……－‘·‘·… －··－ &‘·……···。··…’’·‘－· ·‘‘··… …’ && －· ·＊·‘－·…’ ·－ ·‘·· ···· ·‘···……’ && ···‘··……－·‘··…，…흖「 . · … ‘룝 .* &- ’·｀ -& ·· 뱀… !/- ,: & . . ■ . . 볍「 && ··＊· ·· －· ·· -- ·‘ -- ·‘ ·· 솥솔 ’· & …＊ ‘· ‘… －· && ·솔 ·· ＊· ·。 ·· ·솔 ·－ …… ** －· →． && ·· …。 …。 ·· ··‘& ·· ·· ·· ·· ‘· ……츨‘·＊·‘·· ** ·‘&& 볍「 : 볍 -：쥴；,;,:*:―결 :；弱―鷺 ：盤 ，드；:; ;:; 일；:―흩 :::,;；칡騙； 줄。盤홑 l美！ - 뻑「‘…－…솥…솥· －·‘솥…。－…－··…。··…。’·‘……－－·‘··＊…‘·＊·。＊&’·｀‘·“‘·．‘·，--－……눌·“솥”·……솥‘■·‘··…’&&‘·■「·……‘··，- ;[;;[[---;;[-.[-[:;-.[;;[[--[[[;[!...;:［솥．[;[[ · . . · & - . · . . . · & · & · . 홑 · · · & . · . . 。 · · & , & . · · . … & · . . · · & . · · - · & … - … · - , · - · … … . . … … , · . . · · · . . … … , · . · . · · . . · . . · · · . · - · · · … … & · · . . · , - . . · · 륵꼽繇 . - 乙’ - · & cm 44 r-4 0 A w 00 113M til ti $311111~11 461 9 661 0 1 151 0 1 8 0 0 0 8 e 8 6 0 ffil 8 ODIUM RI IN Mold '11 M- ti- 0 9t1_ ti- ffl*£_ tit- 0 til- lit- 151- ti- ]ti- Ift- lit- til- ølt- 0 tall- 61611- MI- 00fØld 301 RJ Ml '11 co ------- ------- ------- ------- ----- - ------- ------- ------- ------- ------- ------- ------- -- ---- ------- ------- ------- ------- ------- ....... ------- ....... 911- 61- tgz- $si- gli- sir£- 16- Lit- til- on- egi- til- tel- Il- ilt- ilt- ett- 61;- in,i, wiiiiD;Idii el let- 0 ill- til- til- sig- ti- li- i- lot- tst- gi- w ti- ti- (Il- ei- li- Urt- 6"*l- ]ult- 51503 1113m1i 151 it- 151 ts il Z11,1 it lis M til 15 fil til fl- til Kl ti- 161 110 iti't lit,i sisø3d11 i ]m i 5HIJII3do-M 13nte G; til 11 Ill IEIII- lit- 01 oil- ti- 101 l; lis- Ut- 05 M- 951- lit tort 161- ýlf,l 11301d 91110M 'i - ------- ------- ------- - ----- ------- - ------- ------- ------- ------- ------- ------- ------- - - ---- ------- ------- ------- ------- - ------- ....... Sovl- It- fot- ttz- tit- za*8- til- 69t,l- ill- føl- fig- ill- fot- tg£- Igf- us- Ile- ill- uvl- IWI- til*ii- 90113d igt Hoi = 11110 1 151,1 16 6z111 ul in t5111 w 111,1 $li 969 til ill oil- i til 151 919 ltd 111,t Solli 111,51 mo lisell Modi M I ------- ------- ------- ---- ------- ----- - ------- ------- ------- ------- ------- ---- - - - --- - - ------- ------- ----- - ------- ------- e 8 zu ten til til Ilt u- les tet ul ss le ti %s ul ut MI UC£ $]lis 351011111313R 10 IWII linu $W 't Kl 11 0 seilt 16 arl ul 191- t64 mi til tet t#u itt- is- tit Ilt gli egg ogsli 91119 urtl Øolnfieffd mi lo Issell uffid $m *i - ------- - ------- ------- ------- ------- ------- . ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ....... ------- ....... 691,9 ;s - iollt- tit'[- Tiell- still- 916*1- 081,11- 59ýl&t- Leva- fll't- sit*is- fivt- 669,t- 9t4,1- 196,01- iti't 10 lø artol leritl lini 01111 lire ti 111,1 tig,i 1;i"t sti"si Utli 161*51 656't $11,6 91,11 (IVI 116,1 lillt t;1«6 (ICI un ogru ................... , :. .......... 111401 11 WIMI 911d01-1111 1111 310d W9 IMIS01 8108 911d01-111 119101 MASUIS TAKGI 11351111131 lin]$,] RAMAIInnlin slitil Hitte*§ 0101 finis $1113 sol-101 lin$ 11101-m 11101 11101 616111*1 ------------ - ---------------------------------- - - - ----------- - --------- - --------------------------------- 101-101 inills 113911111 m i fille~ 11111111145 3111 - SJIHIM 91103111 113111011 Olim - $11~ 111101111 dens Alliew 01-101 ---------- - ------------------------------------------------------------------------------------------- - ----- - - ------------ - ------------------------------------ I --------- ---------- ----------- - 49 TABLE 12 TURKEY OFFICIAL SLAUGHTER 1/ STATISTICS YEAR NO. OF ANIMALS MEAT 2/ CARCASE SLAUGHTERED PRODUCTION (T) WEIGHT Sheep Lamb Cattle Sheep Lamb Cattle Sheep Lamb Cattie 1976 3197946 8514886 84994 64892 28181 72426 16.91 8.60 85.21 1986 2478940 8187620 891780 41860 25135 76725 16.89 8.0 88.64 1981 5489856 3717596 121818 9126 2970 91185 16.68 8.01 74.81 1982 6148780 4272786 1448980 198515 34196 168270 18.84 8.66 73.80 1988 6489766 416683 1456616 169526 33816 111126 16.88 8.66 76.60 1984 6946568 5299916 1447456 116625 42765 118156 16.86 8.66 81.68 1985 8228876 4488940 1317876 165196 35475 99685 16.89 8.66 75.88 1988 56819726 5687676 1764296 92228 46720 125675 16.41 8.66 71.28 1987 4798576 4484590 1361880 77940 35895 166566 18.26 8.66 78.89 1988 4229296 4458966 1378800 7643 35676 97765 16.85 8.66 76.88 1/ Primary data are the record of slaughter faciIitles with veterinary inspectors. Final figures include the refrigerated abattoir and municipal slaughter house plus 101, and the number of moslem site sacrifices which are estimated provincially. 2/ Until 1984, average weights were obtained for each province every five years end were applied to slaughter figures per province unity a new assessment was made. Sinee then SIS has compiled annual data. Soqrce: Agriculture Structure end Production. State Institute of Statistics, Prime Ministry, Republic of Turkey. TABLE 13 TURKEY SHORT TERM LIVESTOCK LOANS FROM ALL SOURCES THROUGH TCZB Total Loans Average Deflated Approximate Number of Total Loan 1980 USS'8w YEARS Loans Loans Size Values Equivalent No. Index LT LT LT Index 1980 144,044 100 8,28,818,148 22,425 3,280,813,140 10 42,459 1981 158,245 110 5,290,800,879 38,481 3,728,753,700 116 51,862 1982 175,874 122 9,585,831,912 54,508 5,299,410,220 164 59,234 1983 215,014 149 16,780,037,868 77,809 7,225,328,700 224 76,846 1984 243,189 189 28,650,552,905 117,811 8,241,410,80 255 79,585 1985 224,319 156 59,278,070,120 264,248 11,849,158,000 387 111,842 1986 272,867 19 108,157,021,272 396,872 18,517,388,009 511 160,361 1987 229,648 159 138,539,269,902 694,558 15,981,701,009 467 181,810 1988 802,997 210 279,274,198,250 921,708 18,682,424,00 577 207,331 1989 239,422 166 396,566,478,523 1,658,349 15,638,881,000 484 187,502 SOURCE: TCZB Basic Data, Ankara FATTENING LOANS GRANTED UNDER THE THIRD, FOURTH AND FIFTH LIVESTOCK PROJECTS AND THE SECOND AGRICULTURAL CREDIT PROJECT ------------------------------------------- LT------------------------------------------------------------- Total Loan Amount Loan From The World Years Amount Bank Sources Loan 1265-TU* Loan 1586-TU Loan 1862-TU Loan 2318-TU 1984 6,672,802,264 3,002,761,019 1,744,070,573 535,864,896 722,825,550 1985 40,119,172,772 14,998,392,696 - 5,960,821,315 6,804,069,381 2,233,502,000 1986 44,801,961,226 13,809,210,901 - 8,026,192,901 5,783,018,000 1987 37,879,569,060 17,983,062,427 - 1,321,718,427 16,661,344,000 1988 35,065,576,000 17,532,788,000 - 17,532,788,000 1989 TOTAL 164,539,081,322 67,326,215,043 1,744,070,573 6,496,686,211 16,874,806,259 42,210,652,000 *Loan 1265: Third Livestock Development Loan 1586: Fourth Livestock Development Loan 1862: Fifth Livestock Development Loan 2318: Second Agricultural Credit Project Source: TCZB, Ankara TABLE 15 CONTRIBUTION TO TCZB FATTENING LOAN PORTFOLIO BY THE THIRD, FOURTH AND FIFTH LIVESTOCK PROJECT LOANS ----------------------------------Iz----------------------- 1984 6 2 2.5 10.5 1985 - 10 11.5 21.5 1986 - - 7.4 7.4 1987 - - 1.0 1.0 TURE. Selected Land Uses ('000 hao i1 1282 198 18A 18l 198 128m 1m= Alfalfa 143.9 140.4 143.7 186.3 189.0 183.8 184.0 184.0 Sanfola 75.0 75.6 78.2 88.4 84.8 103.6 104.0 91.7 Fodder Beet 1.9 1.7 1.8 1.6 1.8 n/a 1.6 1.7 Total Crop Sown 18,711.0 18,976.0 17,184.0 17,453.0 17,908.0 18,149.0 18,791.0 18,995.0 Fallow Land 8,204.0 8,6140.0 5,854.2 6,421.0 6,025.0 5,771.0 5,574.0 5,179.0 Irrigated Land 2,980.2 8,000.9 8,071.7 8,142.4 8,268.9 3,409.9 n/a n.s Wheat 8,260.0 9,006.0 9,289.0 9,000.0 9,850.0 n/a 9,415.0 9,435.0 Barley 2,986.0 8,187.0 2,900.0 8,250.0 8,8560.0 n/a 8,314.0 3,446.0 Grain Pulses 748 1,203.0 1,886 1,846.0 1,484.0 n/a 2,059.0 2,248.0 Fodder Index 1/ 0.13 0.13 0.13 0.14 0.14 0.16 8.15 0.15 Alfalfa Index !' 0.49 0.47 0.48 0.58 0.52 0.54 1.n Selected Fodder Production ('06M to, air dry equivalent) Vetch 147.6 155.0 278.0 299.7 231.4 235.0 338.0 383.0 1/ (Alfalfa and Sanfoln) x 10 Total Crop sown (1Alfalfa x 16 Irrigated land Saus: Agricultural Structure and Production, Stat. Institute of Statistics, Prime Ministry, Republic of Turkey. I-a - 53 - TABLE 17 TURKEY Selected Crop Areas per Region ('Off ha) 1979 1986 1981 1982 1988 1984 1986 1986 1987 Region I1/ Alfalfa 18.6 18.4 18.9 19.4 19.5 20.5 22.6 21.1 Sanfoln 10.8 12.1 18.9 19.4 19.5 20.5 22.8 21.1 Total Crop Sowq 3,119 8,145 8,194 3,291 3,854 3,898 3,487 3,668 Forage Index 21 109 144 Forage/Crop Ritio -/ .g9 .12 Region II Alfalfa 16.9 15.8 17.7 18.8 18.8 20.0 21.0 21.8 Sanfoln 8.8 8.4 4.1 4.2 4.0 5.4 8.5 2.8 Total Crop Sown 1,751 1,749 1,756 1,719 1,751 1,709 1,758 1,846 Forage Index 100 118 Forage/Chop Ratio .12 .18 Region III Alfalfa 12.9 18.6 14.9 15.8 15.8 16.1 16.4 16.1 Sanfoln 1.8 1.8 1.5 1.8 1.1 1.6 6.9 9.8 Total Crop Sown 1,454 1,383 1,486 1,429 1,459 969 1,449 1,524 Forage Index 106 119 Forage/Crop Ratio .16 .11 Region IV Alfalfa 3.0 3.0 3.4 4.8 4.2 3.7 3.6 3.3 Sanfoln 6.4 0.5 0.5 .8 0.7 0.8 0.5 0.4 Total Crop Sown 1,784 1,782 1,797 1,785 1,783 1,772 1,818 2,009 Forage Index 166 112 Forage/Crop Ratio .62 .02 Region V Alfalfa 18.2 19.5 28.6 24.2 26.1 37.9 28.7 39.7 Sanfoin 15.6 24.8 28.4 29.8 81.6 31.4 88.7 49.6 Total Crop Sown 771 767 781 798 796 826 870 961 Forage Index 196 264 Forage/Crop Ratio .44 .99 Region VI Alfalfa 15.4 16.6 17.5 18.8 26.9 28.9 22.9 80.8 Sanfoln 6.9 7.6 6.4 6.9 8.7 10.8 11.1 15.4 Total Crop Sown 1,9m7 1,886 1,920 2,105 2,158 2,284 2,884 2,389 Forage Index 1N 207 Forage/Crop Ratio .12 .20 Region VII Alfalfa 4.8 5.4 8.1 8.4 9.1 16.6 11.8 11.5 Sanfoln 9.2 16.5 9.1 9.4 11.1 13.4 18.7 18.6 Total Crop Sown 1,282 1,201 1,195 1,299 1,185 1,28 1,216 1,249 Forage Index 166 175 Forage/Crop Ratio .11 .20 Region VIII Alfalfa 24.1 28.4 22.1 18.5 16.5 15.4 18.4 18.9 Sanfoln 8.5 7.7 7.6 4.6 2.7 2.5 2.5 6.7 Total Crop Sown 1,285 1,191 1,244 1,820 1,884 1,874 1,486 1,569 Forage Index 10e 79 Forage/Crop Ratio .28 .17 Region rX Alfalfa 15.1 15.8 17.4 18.6 18.8 19.0 19.1 21.0 Sanfoin 2.4 2.7 3.9 4.9 2.9 29. 8.2 8.8 Total Crop Sown 8,154 3,186 3,156 9,158 8,125 3,240 3,395 3,454 Forage Index 109 167 Forage/Crop Ratio .06 .09 1/ I8RD Map 18786t 2/ Alfalfa * Sanfoin, with 1979 as 199 r Alfalfa + Sanfon X 10 Too6l crop Sw Source: Agricustural Structure and Production, State Institute of Statistics, Prim Ministry, Republic of Turkey. - 54 - TABLE 18 ERZURUM PROVINCE SELECTED LAND USE (HA) 198s 1981 1982 1983 1984 1988 1986 1987 1988 Alfalfa 1/ 1,385 12,735 13,118 14,495 28,611 2/ 18,1560 13,408 13,740 14,235 Sanfoin 1/ 6,740 8,915 9,228 9,916 7,808 6,738 9,927 9,898 10,108 Alfalfa A Sanfoln 17,975 21,650 22,343 24,813 33,874 24,888 23,336 28,636 24,341 Index 1ee 127 131 142 198 2/ 146 187 138 143 Vetch 1/ 3,448 4,745 4,520 5,981 6,734 5,964 7,774 7,955 8,290 wheat 3/ 121,841 121,989 127,747 127,112 130,970 121,369 Barley 3/ 44,844 43,022 53,312 56,808 54,068 53,106 Vetch/Cereal Ratio 0.627 0.936 0.037 0.032 0.042 0.046 1/ Source: Department of Agriculture, Erzurum. 2/ The legitimacy of this figure is possible, but the figure Is surprising as alfalfa is a long- term (4-6 year) crop. 3/ Source: Agriculture. Structure and Production, State Institute of Statistics, Prime Ministry, Republic of Turkey. - 55 - TABLE 19 Selected Equipment Per Region Related to Fodder and Milk Production 1979 1987 Z increment Region Il/ No. Tractors 70,646 113,667 61 No. Mowers2/ 471 851 81 No. Milking Machines3/ 97 734 Mower Ratio Q/ 0.07 0.08 Region II No Tractors 97,811 126,228 29 No. Mowers 275 786 186 No. Milking Machines 161 1,255 Mower Ratio 0.03 0.06 Region III No. Tractors 74,035 104,200 41 No. Mowers 500 1,452 190 No. Milking Machines 114 1,163 Mower Ratio 0.07 0.14 Region IV No. Tractors 55,314 75,135 36 No. Mowers 182 293 61 No. Milking Machines 150 331 Mower Ratio 0.03 0.04 Region V No. Tractors 12,491 16,510 32 No. Mowers 2,023 2,821 39 No. Milking Machines 21 57 Mower Ratio 1.62 1.71 Region VI No. Tractors 15,199 25,543 68 No. Mowers 1,774 3,650 106 No. Milking Machines 9 243 Mower Ratio 1.17 1.43 Region VII No. Tractors 30,292 44,010 45 No. Mowers 300 1,550 417 No. Milking Machines 26 129 Mower Ratio 0.10 0.35 Region VIII No. Tractors 31,126 48,013 54 No. Mowers 554 2,095 278 No. Milking Machines 54 209 Mower Ratio 0.18 0.44 Region IX No. Tractors 53,588 84,143 57 No. Mowers 313 995 218 No. Milking Machinas 48 261 Mower Ratio 0.06 0.12 L/ IORD Map 16766 2/ Tractor drawn mowers. s/ The large number of mi IkIg machines in the Western regions (I, II and III) ref lects the higher incidence of more intensive milk production enterprises in the.e areas. 4/ Mowers X 10 I-ec"ore Sources Agricultural Structure and Production, State Institute of Statistics, Prime Ministry, Republic of Turkey. - 56 - TABLE 20 URKErY FOURTH LIVESTOCK DEVELOPMENT PROJECT LOAN 1SAf6-TU Distribution of Subprotects Accordina to Province Date Office Cattle and Dairy Cattle Established Sheep Fattening S-cow 12-cow 30-cow Total Oricinal Project Area Erzurum Jan 8 1984 321 116 31 23 21 512 van Jul 7 1979 10 49 16 21 14 110 Kars Dec 18 1974 633 497 15 151 18 1.314 Agri Mar 31 197S 10 47 23 27 8 115 Erzincan July 4 1979 8 37 15 4 3 67 Diyarbakir Apr 2 1980 13 10 1 1 1 26 MuS Oct 23 1979 4 10 2 4 0 20 Bingol Dec 15 1980 0 8 1 2 1 12 Bitlis Feb 13 1981 1 30 8 7 0 46 Gurushane Dec 14 1978 1 16 0 6 0 23 Hakkari Dec 14 1978 a -A _L ..f -.a Subtotal 1.001 82 12 28 M 1 LZ Livesteek II! Proet Area Corm 1 102 3 0 1 107 Cankiri 0 25 0 1 0 26 Kirsehir 18 105 2 3 1 129 Mersin 0 71 1 1 1 74 mir 2 73 0 0 1 76 Aydin 0 200 17 7 1 225 Istanbul 0 63 0 4 2 69 Edirne 0 18 2 1 0 21 Kirklareli 0 9 1 1 0 11 Tekirdag 12 43 7 7 0 69 Kocaeli 0 3 1 1 0 5 Sakarya 1 85 4 0 2 92 Bolu 0 9 1 1 1 12 Bursa S 20 1 2 0 28 Kastamonu 2 56 20 7 1 86 Balikesir 1 35 0 3 2 41 Denizli 0 30 11 2 0 43 Manisa 0 61 1 0 0 62 Adana 0 81 10 1 0 92 Adiyaman 0 12 0 0 1 13 Patay 0 55 0 0 0 55 Malatya 0 154 0 1 1 1S6 Yozgat 0 36 0 0 0 36 Zonguldak A .. .1 -a -12 Subtotal __U 1JA .Z1 -4 11 1J32 Total 1.043 2.186 202 292 80 3.803 Source: PCR, Livestock IV - See also Table 6. - 57 - ANNEX 1 Page 1 of 2 Design of the Poultry Component in Livestock V 1. The original targets of this component, at the time of appraisal, consisted of: - establishment, in a total of about 12 regions (or provinces), of some 600 individual village broiler houses (VBHs) each with a capacity of 2000 broilers per cycle (or 10,000 broilers annually). Corresponding total annual production was estimated at 5.5 million broilers (corresponding to about 8800 tons liveweight or 6700 tons of dressed poultry meat). - establishment of about 12 regional processing centers (RPCs), each with a capacity of 1200 tons of dressed meat annually, i.e., capable of handling the processing, cold storage, and services needs of about 100 individual producers. - Establishment of 9 parent stock farms (PS) with an individual annual capacity of 1.1 million starter chicks to be supplied to the VBHs. - establishment of a grand parent stock farm (GPS) to produce female parent stock (so far imported) to be supplied to the parent stock farms established under the project as well as to other domestic poultry breeders. - establishment of a premix feed plant to supply a precise premix feed component to the feed mixing units in the RPCs. 2. The poultry component was directed to small farmers with little or no land and only very limited alternative sources of income. Its design was based on the model developed since the early seventies with about 75 village producers at Tarsus (near Adana, in the Icel province) with the assistance of the Turkish Development Foundation (TKV). A main feature of the poultry component of Livestock V was to secure the position of the small producers through close integration between production, technical services, input supply and processing/marketing activities, with ownership and managerial control of the related processing units by the producers. In order to ensure timely and coordinated implementation of the various components of the integrated scheme, project start-up in any new region/province was to be conditional upon the formation of a Regional Poultry Corporation or Cooperative (RPC) by a group of at least 20 processors applying for individual loans to establish VBHs. Processing plant, cold storage and feed mixing facilities were to be established by each RPC once they reached about 50 members. In turn, shares in parent stock companies and in the premix feed unit were to be owned by RPCs. - 58 - ANNEX 1 Page 2 of 2 3. At the time of appraisal, the poultry component of Livestock V was envisaged as a first six-year time slices of a ten-year program for village poultry development, with a long term (1991) objective of establishing 2000 VBHs together with related facilities. It was agreed that in order to ast.st small growers in the production and management tasks envisaged under th. poultry component of Livestock V, a Center for Technical Support Services (CTSS) would be set-up with the assistance of a consulting firm or other suitable private institution, which would be in charge of the initial start-up and training of growers and processors. The corresponding support activities were, subsequently, to be gradually assumed by the technical and managerial staff of the RPCs and other corporations formed by the farmers. - 59 ANNEX 2 FACTORS AFFECTING THE INVESTMENT CLIMATE IN LIVESTOCK ENTERPRISES 1. The decline in farmer interest in dairying subloans and increased attention to meat production through sheep and cattle fattening in the early 1980s were phenomena which led to major changes in the content of both the fourth and fifth livestock projects. The attached table presents relevant price series data and their derivations which enable an analysis of the possible impact of price variations on farmers' decisions. Unfortunately, reliable milk prices for 1978 and 1980 were not available, and this limits accurate interpretation. Relative Profitability in Using Concentrates 2. From the available data, the milk/concentrate price ratio did not appear to alter significantly from the end of the 70s into the early 80s, remaining at about 1.5. However, a supervision report on Livestock IV in early 1981 reported that this ratio was closer to 1.0 in the eastern provinces, implying that milk production with heavy reliance on concentrates would not have been attractive in this area at that time. The table indicates that the ratio improved after 1984, and this would have led to significantly improved profitability in milk production. 3. In the 80s in the USA, the corresponding milk/concentrate price ratio has ranged from 1.35 to 1.65, averaging 1.48. This suggests that it should have been possible to profitably operate milk farms in Turkey in the early 80s under good management and with an acceptable debt/equity ratio in the enterprise. 4. The meat/concentrate price ratio for cattle and sheep was very favorable in 1979 but was not high in the early 80s compared to earlier and later years, so that there was no added incentive due to this factor in the preference for fattening in the early 80s. However, the situation for export sheep was slightly more favorable because of a higher product price partly associated with devaluation of the local currency (para. 7). Product Prices Relative to Inflation 5. The milk price series suffers from the gaps in 1978 and 1980, but the data indicate that milk price increases exceeded inflation as measured by the wholesale price index throughout the period of both projects. - 6C - 6. Red meat prices (beef and sheep) did not increase as fast as wholesale prices after 1980, but were not substantially behind this inflation indicator. 7. The export price of live sheep in LT terms, however, did increase at a greater rate than inflation in the early 80s, which would provide an incentive for sheep fattening. Annual increases in the export price of sheep meat were very close to the wholesale price index. Subloan Interest Rate and Inflation 8. The interest rate on livestock sublo,ns was substantially below the rate used for commercial credit. Apart from a period in 1985 for meat and in 1986 for milk, the annual product price change was larger than the interest rate being charged in the same year on livestock subloans. This ratio was low, however, in the early 80s, especially for milk. Although the capacity of the enterprise to repay a subloan would relate to the net effect of input and output price inflation, the wholesale price index did not rise as fast as the milk price index and the milk/concentrate price ratio appeared to be stable in most areas (para 2). This suggests that interest rate should not have created repayment difficulties in enterprises with reasonable debt/equity ratios and satisfactory production levels. Conclusion 9. The figures in the attached table do not, therefore, point to any outstanding factor which would have discouraged milk productiou and encouraged meat production, with the possible exception of fattening of sheep for live or carcase export. This suggests that the major influences were those referred to in the text of the PPAR: (a) Fattening was a traditional and manageable enterprise which was profitable and entailed a short-term commitment and rapid turnover, in a period in which interest rates appeared to be increasing (para 20 in the text); and (b) borrowing for milk production meant paying a very high price in LT terms for iwported cattle relative to local purebreds; when this was combined with lower-than- expected yields (partly associated with inadequate technical assistance), a relatively costly production system with an excessive reliance on purchased concentrates, uncertainty concerning milk prices in the longer term, and high debt/equity ratios, milk production was not as attractive an investment as livestock fattening (para 28 in the text). PRICES AND RATIOS FOR LIVESTOCK MUTS ANM GUTPUTS T~R%EY 1978 - 1990 im au i m im im im 2= im im im im i Infis ion/ Annual wholosale pric* Incrmment (1) - 65 108 37 26 31 62 40 27 32 68 n.a. a.8. Exchance rate i/ LT/US(June) 24 85 79 107 18 217 3860 50 675 834 1,347 2,116 n.a. Intorest rata. 2I1 1/ Discount rat* 10.0 10.8 26.0 31.5 31.5 48.6 52.0 62.0 48.0 46.0 64.0 n.a. n. Deposit rate 0.a. 7.3 10.6 28.5 45.0 51.9 64.3 49.0 42.0 36.0 n... n.. n.a. General lending rata n.. 18.0 25.7 35.6 36.0 85.5 62.3 63.6 52.6 6.0 n.a. n.a. n... Livestock aubloans 2/ 11.0 11.0 18.6 24.0 20.0 20.0 20.0 30.0 80.0 22.0 22.0 34.0 34.0 11*at PrIceffi/ 8..f LT/kg 77 136 210 260 80 520 760 88 - 1,650 2,300 8,60 5,880 8,4680 Beef prico Index 100 179 273 338 455 675 974 1,140 2,010 2,990 4,66 7,647 10,990 Shofp price Index 10 169 333 427 620 686 1,000 1,400 2,130 3,470 4,130 7,100 10,400 Wholösale price Index 100 165 343 490 587 770 1,170 1,6838 2,089 2,749 4,614 n.&. n.a. Concentrato LT/kg. 8.4 6.1 11.1 16.25 18.25 26.6 39.0 43.6 67.8 82.6 185 260 440 Beef: conc. ratio 22.6 26.6 18.9 16.0 19.2 19.6 19.2 20.2 26.9 27.9 26.6 22.6 19.2 Sheep: conc. ratio 22.0 24.9 22.5 19.7 21.4 18.9 19.2 19.3 22.2 23.6 17.7 17.8 17.7 Annual beef price chango: Intorest rate ratio - 6.8 8.1 1.0 1.8 2.4 2.2 0.6 2.6 2.2 2.4 2.0 1.3 12ZE 12Z2 1231 1221 1222 1881 123& 193522 91 1 882 m 198 122 1h.mr~ im I 22/m m SheeD exDorts A Live sheep ('OWT) n.s. n.a. 88.6 75.i 101.0 197.2 118.8 91.5 n.a. Value/T-USS 2,338 2,466 2,456 2,174 1,699 1,645 -LT'g 1,847 2,889 4,124 4,718 6,118 8,719 -Index 106 148 222 256 831 472 Sheep mat ('00T) n.a. n.a. 5.6 24.7 44.4 44.7 61.9 85.6 n.e. Value/T-USS 8,196 3,08 2,642 2,847 2,169 2,09 -LT'so 2,463 3,299 4,489 5,098 7,593 10,848 -Index ig6 184 181 208 810 434 Wholesale price index I6 187 171 228 849 477 Milk ories A/ MIl I LT/kg. n.a. 7.5 n.a. 26.6 82.0 88.6 60.9 83.0 195.0 189.6 a13.0 498.6 786.6 Milk price Index - 1s - 888 427 56 89 1,16 1,46 2,26 4,170 6,578 16,436 Wholesale price index - 166 166 228 286 873 56 798 1,@"6 1,8389 2,286 n.a n.0 Concentrate LT/kg. 8.4 5.1 11.1 16.26 18.25 26.5 89.9 48.6 67.6 84.4 142.5 276.6 469.9 Milk:conc. ratio - 1.5 - 1.5 1.75 1.5 1.5 1.9 1.8 2.0 2.2 1.8 1.7 Annual milk price change: Interest rate ratio - 6.7 - 1.2 1.4 1.6 2.9 1.8 6.9 2.7 3.9 1.7 1.7 n.a. a Not avallable 1/ International Financial Statistics. IMF monthly publications. 2/ Collated by MAFRA, OD Projects and Implementation - Meat prices from EBK with beef prices after 1987 reflecting the bonus for high hot dressing weight percentage of 6eM (up to 7.51 of price per kg.). 3/ Source: Undersecretariat of Treasury and Foreign Trade, Turkey. 4/ Milk prices collected by MAFRA from TSEK for 1988 - 1989; prices for previous years from supervision reports. TSEK prices varied according to locality but these prices represent 8.65 fat milk in the Ankara province. Smaller processors (mandiras) paid higher prices than TSEK in the Spring and Summer months. The 1981 price of LT25 represented a drop in price introduced in April, implying that the 1980 price was higher that this; this suggests that milk price and milk/concentrate price ratios would have been very attractive In the second half of 1980, while 1981 would have represented a major let-down In expectations. 10. o I" B5RD 167 66P F A ARTVIN SINjOP K\ ?KIRKLARELI VIIKASTAMORIZE ZONGULOAK SAMSUN - TRABZON DIRNE T ISTANBUL 7'-R U "j A - \.O GIRESUN KOCAELI BOLU CANKiR COU AMASYA T TGCMbSHANE ERZURUM . SAKAA ITOAT ERZIN40- 40' CANAKKALE BURSA LECt K ANI KRKKALE SIVAS E. ' , I* L II IÖ U > BALIKESIR ESKISEHIP YOZGAT vTUNCELI NG REP OF Y-A N K A R A ISHAVAN ýRAN KUTAHYA ITLIS MALATYA ELAZI AFYO ESEHI R) KAYSERI /.. J_ ~DVYARBAKI R III RTKRI k USAK TA kAKSA HAK IZMIR MGDERARAS '~' 2 /ýIGDE 2 ADYAMAN MARDIN RAQ ISPARTA KONYA AYOIN DEN IZUI -/> f\.. j 7RrA suou DAAT U R K E Y MU-AGAZIANTEP AGRICULTURAL REGIONS MIJåLA"ANTALYA RA~ ICEL SYRIAN ARAB REPUBLIC NATIONAL CAPITAL *HATAY-.....HATA. .- PROVINCIAL BOUNDARIES -35- - NTERNATIONAL BOUNDARIES 3- CENTRAL-NOTH REGION MEDITERRANEAN REGION BLACK SEA rEGION A AEGEAN REGION NORTH-EAST REGION CENTRAL-EAST REGION 0 40 60 120 160 MARMARA REGION SOUTH-EAST REGION CENTRAL-SOUTH REGION KILOMETERS *ZZ 3, AUGUST990 SULGARIA U. $. S. R. RELI !MngU(tSINOP/ ATI $ . 0 ISTANSUL SAMSUN STANBUL ) IZ E, so / ° k\ TRABZOM ) ORDU /GlRESUN- AMASYA ~ ÅTqKAT ... GUMdSHANEr> CANAKKALE -- \. GU....A.......... % " } -ERZURUM BALIKES RE AT E N 'C IN ES 2GA T R _ KUTAHYA TUNCEL\ L"fI < (BIINGTU) AFY, 1 •us År IFO jl IR , KAYSERI i'i >- :,.'YONi~ -HIR 0 NV KAYSERi 5 VJA( IJýAN 3> r) USAK NEBETA Z GZ \AKSAAYSE R A ATYA ~"BIT LIS n AKSARAf-i Dl¥ARBAKIR 0 ,NIGDE S RT -- -' A - -NIZILf ~4' SF,0RTA K MARAS-HAK ) /;ADiYAMANKK )BURDUR - MUGL%< 7 a URFA - R AQ l, AftTALYAKAMN ALA -GAZIANTEP f ANT TURKEY ASYRIAM AREAS COVERED BY BANK-FINANCED ARAB PROJECTS AND PUBLIC INFRASTRUCTURE IN R E P. . . ... 1%1 K M-1 11- ,l -- "1edb 1918 THE LIVESTOCK SUBSECTOR C Y PR US CSK -.c 9 I HK S1ll-uer r 11 1.- 1 om1ete hy 198 -o KILOMETERS MINAt,,oncedo readersandnexclus lorIe" ernol j-M S , Marukets I,, tstl-dby 1 978 Sd he W I oBank nd th. rogonl Frnance Corpoooon Th. d.oo tons osed ond #.e bo-ndon- shon .n nop d _ _ p,o,,c Boundones __ S__ 00 _ _0 200 ---4 o o por d the Wold B-nk ond gho rng.,inonO LES Finnce Codroron. ony odgmnt o hegal stogus o ony -p'""' .... nema dona Bu WIh MSLEBV torúIoy ogaony -dorsemerit or occpoone d suh bo-ndo-4. S30* 爪 ZONGULDAK0 KASTAMON1 I-Lj f fiEIIRDA ( , a 0 STANBUL, c TRAMON 12MIT f,ý7PAZARI Bolu 0 ýANKIRkFýy Mýý 40' ýORUM Å1-x, 3 ILIRIA, &ANKARA mnum BALIKESIR 9SKISEHIR ?K' IlIK111/ C) \Ij KUlAHIA KIK HIR 77£ Lu SA \__MANI OAFYON 'Ä 0 C ýAK'g 61 ZMIR V R] SE KA6F CI, MIIA-11,- AKSARAY 0 '.SPART P-tNIA JENIzi-I A N(,r-, ýLADiYAVAýý' "ýkRAMAN ANIAlYA c ER ýýA JDA 54Z l R A A A ;---,L - . ........ I E L ANTAKYÅA 0 TURKEY -35* PROJECT AREA OF LIVESTTOCK I (C, 236-TU) SYRIAN APPRAISAL OF FIFTH PROJECT AREA OF I VES OCK M (t. 1265-TO) ARAB LIVESTOCK DEVELOPM ENT PROJECT PROJECT AREA OF LIVESTOCK 11 (G 330-TU) CYPRUS" REP. PROJECT AREA OF LIVESTOCK IT (1. 1586-TU) LIVESTOCK :Z CREDIT AREAS EXISTING E8K SLAUGHTERHOUSES EBK SLAUGHTERHOUSES TO BE OPERATIONAL DURING 1980 POLANDý PRIORITY REGIONS FOR POULTRY PROJECTS u. Pa ARTIFICIAL 'NSEMINATION COMPONENT ANIMAL HEALTH COMPONENT MOHAIR PROCESSING COMPONENT ROMANIA 1ý0 200 Kdomet- MEAT CUTTING COMPONENT INTESTINE PROCESSING UNITS 0 160 150JNÅ,k, DAIRY AND CATTIE BREEDING ýp' 'I UIIÄRIA MERINC X-l UDA, PROV,N CE BOUNDARIES