In the Absence of a Welfare State: The Regulation of Agricultural Production Credits in Turkey since the Great Recession

Following the Great Recession of 2008, studies on the socioeconomic implications of financialization in agriculture focused on its impacts on land ownership and agri-food firms. They have not however prompted a change in how... [ view full abstract ]

Following the Great Recession of 2008, studies on the socioeconomic implications of financialization in agriculture focused on its impacts on land ownership and agri-food firms. They have not however prompted a change in how the social sciences conceptualize credit use and its consequences for small and medium-scale farmers. I investigate the immediate implications of credit use and debt for small and medium farmers based on how government policies influence the credit use of small and medium-scale farms. Government policies surrounding agricultural credit in Turkey represent such a policy area where the agricultural sector still constitutes one-quarter of total employment. Another important question this study addresses is whether agricultural credits are providing the necessary financial incentive for farmers to participate in commodity markets with higher production costs. Therefore this case contributes to the theoretical discussions on accumulation-by-dispossession approach, as well as to the discussions on the exploitation through debt, that is another important consequence of credit use. The methods are based on archival analysis, using official and news sources (e.g., laws and government decrees, institutional and industry reports), and gather descriptive statistics on credit use and agriculture. The documents from the Bank of Agriculture and Agricultural Credit Cooperatives are the focus of this search since these institutions have been the main sources of credit. Public data on agricultural production and credit use at the national level are made available online by the Turkish Statistical Institute and the Banking Regulation and Supervision Agency. I find that the government policies bolstered the expansion of the agricultural credit market to direct farmers from state-supported commodity markets to corporate markets where commodity prices fluctuate. The findings shed light on the underlying socioeconomic legitimacy of exploitation in a corporate economy that is created by the expanding credit supply, as much as the dispossession trend compounded by credit use and market unpredictability.