The licensed warehouse is the large-capacity warehouse that enables agricultural products to be stored on health conditions with a rental fee and is founded as a joint stock company while its operating procedures are determined by states. The licensed warehouse is widespread in the United States. In the United States, the licensed warehouse became operational to increase quality and to regulate agricultural and food products. However, Turkey laid the foundation 13 years ago with required legislation.
Remarkable steps were taken in the licensed warehouse that prevents price drop due to excess of products at harvest periods, balances market, and enables small farmers and products’ owners, who experience financial difficulties, to have loan from banks.
Within these works, in order to close the gap, the Turkish Grain Board (TMO) has started the process, “to create licensed warehouse through long term leasing to the private sector.”
As we participated in the celebration of “Eightieth Years of TMO and Warehousing Drive Activities,” the General Manager İsmail Kemaloğlu talked about licensed warehouse. “We build dams for agriculture. We started the biggest warehouse drive for Turkish history,” he said, underlining the importance of these works for the sector.
The board aims to build a licensed warehouse with a capacity of 4.2 million tons at 90 points throughout the country. 2.5 million tons of this will be reached during 2018, and the rest will become operational at the end of 2019. In a time of climate change, global warming, drought, and recent food wars between China and the United States, I see works on licensed warehouse are promising for the future of the country.
The licensed warehouse has significant benefits for producers, traders, and industrialists who process agricultural raw materials. First of all, price instability in the markets is damaging producers, traders, and industrialists. If the licensed warehouse becomes widespread, that is if the half of products are stored in these licensed warehouses, it will become easier to regulate the agricultural product markets.
As we see in many countries, if the price falls under a specific level, governments can ensure market stability through prevention of drop in prices through product bonds. And also, traders and industrialists will be able to access products whose quality is determined according to scientific criteria and prices are stabilized.