Contract Growing for the Export-oriented Cut Flowers Industry in Turkey

Abstract

Thirty cut flower businesses were surveyed in 1997 to examine the production structure and main problems of export-oriented contract growing in Turkey. The survey was conducted in Antalya province, which is the center of export-oriented cut flower production in Turkey. The results of the research provided insight into how Turkish cut flower-contracted growers were managing some of the key areas of their operations. The study also provided the opportunity for growers to highlight their concerns about contract growing for export-oriented cut flower production. The survey showed that contract growers do not use specific performance indicators relevant to cut flower production. The product price received by the contract growers was determined by the export companies. These export companies receive flowers from growers mainly on consignment. After exporting the products, exporters periodically pay the grower, subtracting a commission for their services and other marketing expenses. Contract growers are essentially price takers in the transactions. The business procedure from production to price setting and marketing was not in the hands of the contract growers. Therefore, the trading risks are essentially borne by the contract growers. The main concerns raised by contract growers were the current consignment system, cost of the plant materials, and the late payment for the sold products.