Rising Costs Hurt Turkey’s Tobacco Industry

Rising Costs Hurt Turkey’s Tobacco Industry

Tobacco is one of Turkey’s top agricultural products. But some of the country’s tobacco farmers say rising operating costs linked to inflation are cutting deeply into their profits.

In the tobacco growing area of Celikhan in the country’s southeast, farm worker Mehmet Emin Calkan said people are struggling and “don’t have much to live on.”

Calkan is 19 years old and hopes to go to university to study electronic engineering. But for now, he works in the fields. He told the Associated Press he sometimes works until 9 p.m. Calkan said he needs to work long days to help his family pay for the books he needs to prepare for the university entrance exam.

The man who runs the tobacco farm is Ismail Demir. He said he is not making as much money this year because fertilizer is so costly. Fertilizer is a chemical that helps plants grow.

Other costs are high, too, such as the diesel fuel he puts into his vehicle to drive to the fields. Last year he spent about $3 to drive to work. Now it costs about $16 to travel the same distance.

Mehmet Emin Calkan, 19, collects tobacco leaves in a field near Kurudere village, Adiyaman province, southeast Turkey, Wednesday, Sept. 28, 2022. (AP Photo/Emrah Gurel)

The difficulties the farm owner and his worker are experiencing are happening in other industries across Turkey. The country is facing economic problems driven in part by inflation and weak currency valuations.

The Turkish government announced Monday that inflation rose nearly 84 percent from a year earlier. That is the country’s highest increase in 24 years. It is also the highest among the world’s 20 largest economies. Independent experts say the country’s actual inflation rate is much higher. The Inflation Research Group has estimated the rate is about 186 percent.

The largest increases are costs for transportation, food and non-alcoholic drinks.

Some countries are seeing price increases because of economic slowdowns related to the COVID-19 pandemic and the invasion of Ukraine by Russia.

But economists who study Turkey say the country’s economic problems are mostly linked to financial policy mistakes made by the government.

For example, Turkish President Recep Tayyip Erdogan has said he believes higher costs for borrowing money leads to higher prices. Most economists, however, believe the opposite is true. But because of the president’s pressure, the Turkish central bank has lowered the cost of borrowing.

When the bank recently lowered the cost of borrowing by one percent, to 12 percent, it weakened Turkey’s money, the lira. The currency has lost more than 50 percent of its value since 2021.

Erdogan is up for election in June 2023. He has said his government is centering on measures aimed at increasing exports and driving economic growth. Such policies have already helped save 10 million jobs, the president claims.

In a recent speech, Erdogan said the interest rate “has to go down further.” He suggested this will cause inflation to drop as well.

The Turkish government has put a number of policies in place to help people deal with inflation. It increased the minimum wage, put in a limit on rent increases and reduced taxes on energy bills. But even with the policies, people are having trouble keeping up with basic living costs, also called expenses.

Another tobacco grower in Celikhan is Ibrahim Suna. He said he is currently struggling to support his family. “Tobacco is our only means of living, and we have no other income,” Suna said. He has five children.

Suna said he expects to earn about $5,400 this year from a harvest of 400 kilograms of tobacco. But, he noted, “half of it will go to expenses.”

I’m Dan Friedell.

Dan Friedell adapted this story for VOA Learning English based on a report by The Associated Press.

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Words in This Story

currency –n. money used by a country

minimum wage –n. the lowest amount of money per hour permitted to be paid to workers according to law

rent –n. money that you pay in return for being able to use property and especially to live in an apartment that belongs to someone else

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