private foreign investors must meet and provides for certain safeguards and facilities. Investments covered by these laws are permitted repatriation of capital and profits (see ch. 23, Foreign Economic Relations). Building and housing construction increased during the 1960's, especially in urban areas. For many years housing has accounted for a large proportion of the country's total investment expenditure. One of the aims of development planning has been to reduce the percentage of housing investment in relation to total investment but at the same time to ensure construction of an increasing number of low-cost housing units. In the late 1960's there was a great shortage of dwellings for low-income families because of a growing movement from rural to urban areas. At the end of 1967 electric power reached only 30 percent of the people. Thermal sources supplied nearly two-thirds of the total production. To meet rising demands for electric power, the Second 5-Year plan calls for completion of work on the nation's largest hydroelectric project at Keban on the Euphrates River. Power from this source was expected to aid in exploitation of mineral resources, and in industrial expansion in the eastern part of the country. Since World War II transportation and communications have been the object of heavy public investment. Railways connect all of the main cities but the country's highway system is not yet adequate and less than one-half of the roads are usable the year round. One of the great needs is provision of secondary and feeder routes to open up more isolated areas to economic and social development. The Second 5-Year Plan calls for the building of a super highway through Turkey from Syria to Greece which would pass through Ankara and Istanbul. There is also a proposal for a new highway extending along the coast from Istanbul to Iskenderun. One of the most important tasks confronting the government in regard to foreign economic relations during the late 1960's was to overcome or at least ameliorate the country's persistent foreign trade deficits without impeding the progress of economic development to which it was committed. This involved continued reliance on credit assistance from foreign official sources to meet trade obligations and service the foreign debt, together with selective limitations on imports to conserve foreign exchange. To accomplish the latter purpose, most goods were imported in accordance with programs established by the government, and all imports required licenses. To improve its trade position, the country has entered into several bilateral barter agreements with the Soviet Union and countries of Eastern Europe and has been promoting a customs union with Iran and Pakistan. In 1963 Turkey negotiated an agreement with the European Economic Community (EEC) under which the country will gain full customs union membership with the EEC by 1978. During the interim preparatory and transitional periods, the country will have associate status in the organization. In addition to increased financial assistance available through the EEC, this association offers an enlarged foreign market for the country's agricultural and light industrial exports, and opportunities to expand the tourist industry (see ch. 23, Foreign Economic Relations). CHAPTER 19 Turkey is basically an agrarian country. During 1966–1967 nearly three-fourths of the population and two-thirds of the labor force of 14 million were engaged in agriculture which accounted for about 33 percent of the gross national product. Cereals constituted about 35 percent of total agricultural output while livestock products accounted for about 30 percent. Another 20 percent came from the main export crops which are tobacco, cotton, hazelnuts and dried grapes. About 85 percent of the nation's exports originate in the agricultural sector. Despite rapid population increases the country is nearly self-sufficient in food production. The country has made substantial progress in agriculture in the past 20 years, but in the late 1960's still faced many problems in developing its potential. Most of the farmers were poorly educated, untrained in modern agricultural techniques and traditionally resistant to change. Despite efforts of the government through its 20 state-owned mechanized farms, modernization had been slow among private landowners, many of whom relied on primitive farming practices. The agricultural institutions were having difficulty in coordinating their research activities and transmitting findings to the farmers. Transportation and marketing systems, despite rapid advances, were still inadequate. Insufficient foreign exchange receipts continued to hamper purchases of modern agricultural equipment. Despite these long-standing difficulties the country's agricultural problems during the late 1960's were substantially different from those it faced a few years earlier when the drive to increase production could be met simply by expanding the area under cultivation. By the late 1960's the spread of cultivated area in the country had nearly stopped because the nature of the terrain and the soil made continued expansion almost impossible. That government planners are aware of this situation is shown in the 5-Year Plan of 1963-67. Fulfillment of its goals was contingent upon increasing farm output through technological advances which would increase the output per acre. Realization of planning targets in the future, then, will depend upon the Turkish farmer and his attitudes and reactions toward the changing structure of rural life and upon the ability of the government to promote and disseminate technical services to the farmer. Equally important will be the capacity of the country to finance both agricultural and industrial expansion at the same time, and to employ those displaced by more efficient agricultural practices in a productive manner. AGRICULTURE SINCE WORLD WAR II Substantial changes have occurred in the country's agriculture since World War II. In the latter part of the 1940's there was an extensive drive to expand production largely because of the loss of German markets which had been vital to Turkey's exports. At the same time Europe's postwar need for more grain was paralleled by a declining demand for Turkish luxury exports such as tobacco, dried fruits and nuts. This period also saw the advent of Turkey's Democrat Party which rose to power on a platform of rural reform. This program was underwritten by United States investment capital in the form of Marshall Plan funds, and emphasis was placed on the expansion of grain production and mechanization, especially in the wheatgrowing areas of the Anatolian plateau. Sugar beet and cotton production were also encouraged. Between 1947 and 1953 the area devoted to cotton production nearly doubled as the country's agricultural exports steadily rose. This increase in cultivated area resulted in increased pressure on the already over-grazed pasturelands. In 1954 Turkey had a drought and in the following 2 years there was insufficient rainfall, resulting in lessened agricultural production and falling farm incomes. Technical problems arose as farmers continued to expand cultivated acreage on inferior soils. Cotton production levelled off as world prices fell and the country became a large importer of wheat. As population expanded even the bumper harvests of 1956 and 1957 were barely able to meet the country's food and fibre requirements. This was a substantial blow to government planning officials who had expected agricultural commodities to help finance the economic development programs. Failure to take into account drought, insufficient attention to traditional foreign exchange earners such as tobacco, raisins, figs and filberts, declining livestock numbers (as pastureland was ploughed for grain), and the slow spread of farming technology were the main factors contributing to the fall in production. The 1963-67 Plan was aimed at remedying this situation through improved irrigation and fertilization techniques as well as new disease and pest controls, and use of better seeds. It also |