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 New Zealand Journal of Crop and Horticultural Science

ISSN: 0114-0671 (Print) 1175-8783 (Online) Journal homepage: http://www.tandfonline.com/loi/tnzc20

Evaluation of the wholesale market system for

fresh fruits and vegetables in Turkey: A case study
from Antalya Metropolitan Municipality

S. Yilmaz & I. Yilmaz

To cite this article: S. Yilmaz & I. Yilmaz (2008) Evaluation of the wholesale market
system for fresh fruits and vegetables in Turkey: A case study from Antalya Metropolitan
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 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36: 85-95
0014-0671/08/3602-0085 © The Royal Society of New Zealand 2008
Evaluation of the wholesale market system for fresh fruits
and vegetables in Turkey: a case study from Antalya
Metropolitan Municipality
S. YILMAZ
Department of Marketing
Social Vocational College
University of Akdeniz
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
07070 Antalya, Turkey
email: serpilyirmaz@akdeniz.edu.tr
I. YILMAZ
Department of Agricultural Economics
Faculty of Agriculture
University of Akdeniz
07070 Antalya, Turkey
email: iyilmaz@akdeniz.edu.tr
Abstract The aim of this paper is to investigate
positive and negative aspects of the wholesale
market system using the case study of Antalya's
fresh vegetable and fruit crops wholesale market. In
addition to an evaluation of the present legislation,
this study proposes solutions to the problems faced by
the wholesalers and growers. Finally, an evaluation
of the marketing system has been attempted using
data obtained from a research survey conducted
among producers and brokers.
Keywords wholesale markets; fresh vegetables
and fruits; Turkey
INTRODUCTION
Wholesale markets are an essential component of
any agricultural marketing system, especially for
horticultural crops (Seidler 2001). The consumption
and production of marketed food are spatially
separated. Production is generally in rural areas and
consumption primarily in urban areas. Marketing is
the process that overcomes this separation, allowing
H06117; Online publication date 27 May 2008
Received 22 December 2006; accepted 21 March 2008
85
produce to be moved from an area of surplus to one
of need (White 1991).
The ecological conditions in the Antalya province
are such that the area is suitable for both field and
greenhouse vegetable and fruit growing. A large
section of the population in the province earns their
livelihood from fruit and vegetable production.
In recent years, an important volume of fruit and
vegetable production has been achieved and most
production problems have been solved in the region.
However, a number of problems are currently
encountered in the marketing of the produce which
can affect both the consumers and producers in
an undesirable manner. Certain characteristics of
fresh fruits and vegetables (such as that they are
perishable or bulky) as well as certain unfavourable
factors encountered in exporting them, magnify
these problems. The challenges encountered in the
marketing of fresh fruits and vegetables necessitate
the implementation of multi-faceted technical
and economic safeguards on the part of both the
government and the producers.
In Turkey, the basis of the fresh fruit and vegetable
marketing system has been the "wholesale market"
(Yilmaz et al. 2005). Located near production and
consumption areas, wholesale markets are places
where wholesale buying and selling of fresh fruits
and vegetables occurs and where the price is
determined by supply and demand. The brokers and
merchants who work at wholesale market halls play
an important role. Despite this, it is widely believed
throughout Turkey that the fresh fruit and vegetable
marketing system in the country is not rational. It
is further argued that, in time, the marketing system
has come to serve the interests of the intermediaries
rather than those of the producers or consumers
(Kaptangil 1980; Vural 1983; Gunes. et al. 1986;
Hatirli & Yurdakul 1992; Gumus 1997). Furthermore,
the problems encountered in the marketing of fresh
fruit and vegetables affect their production and limit
the benefits that the country can derive from these
goods.
For these reasons, this study attempts to analyse
positive and negative aspects of the wholesale
 86 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36
market hall system in the country through a case
study of the operations of Antalya city's fresh fruit
and vegetable wholesale market hall. in addition to
an evaluation of the relevant law, this work provides
an analysis of the present legal framework in the
antalya fresh fruit and vegetable wholesale system
and proposes solutions regarding current problems.
The study makes an attempt to evaluate the system
using data obtained from a survey conducted among
the producers and brokers of the antalya wholesale
market.
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
MATERIALS AND METHODS
The research material consists of data obtained from
the research survey conducted among the producers,
brokers, and merchants of the antalya wholesale
market hall as well as the opinions (both written
and oral) of persons associated with the workings of
the wholesale market hall and the staff of the related
associations and chambers. in addition, findings
from previous related research were used.
Our research topic is the evaluation of the
wholesale hall system. The decision to carry out
the research in Antalya's wholesale market hall was
based on the extensive number of sales conducted
there and the large number of intermediaries involved
in the process.
in addition to the producers near the city of
antalya, producers in the nearby town of Serik
also sell their produce to the antalya metropolitan
municipality's wholesale market hall. Thus, for
the purposes of the research, the producers around
the city of antalya and the town of Serik were
contacted. Because our work is, to a great extent,
an evaluation of the hall system, the research at hand
was not conducted at the product or produce base.
However, because greenhousing is so widespread in
the province of antalya, we conducted our research
among the greenhouse owners on a random basis.
Sample farms (128) were selected from the research
area by using a random sampling method.
The data obtained from farmers by the survey
have been grouped by greenhouse area, educational
level, and age. The farms were classified into three
greenhouse size groups as small (0.1-2.0 da) (0.01-
0.20 ha), medium (2.1-5.0 da) (0.21-0.50 ha), and
large greenhouse farms (5.1 da (0.51 ha) and more).
These have then been turned into mean and frequency
tables and interpreted. Whether the relation between
characteristics taken into consideration in forming
the groups and the observed variables is statistically
significant has been determined by using chi-square
or variance analysis (for continuous variables). When
making a chi-square analysis, it is important that
frequency number within one cell be no less than 5.
When this cannot be done, the groups are combined
to satisfy this condition. a random sample of 52
persons drawn out of a list of 144 brokers (nearly
36%) were also included in the research.
DISCUSSION
Fresh fruit and vegetable
wholesale marketing system
The fresh fruit and vegetable (FFV) marketing system
is influenced by a number of production, product,
and market characteristics: (1) perishability; (2) large
price and quantity variations; (3) seasonality; (4)
alternative product forms; (5) bulkiness of product;
and (6) geographic specialisation of production
(Najafi 2005). marketing systems may change
from country to country, sometimes even from one
product to another and from one producer to another
(Demirbas 2005).
Over time, as countries became more populous
and cities needed to bring in food from rural areas,
marketing systems started to develop (Cadilhon et
al. 2004). The role of food marketing in a developing
country changes with its economic development. a s
a country develops, the structure of its urban food
marketing system evolves, going through three phases
(Kaynak 1999). Phase 1, which can be found in the
least developed countries, shows a predominant role
held by small-scale traditional distributors. Phase 2
is characterised by well established grocery stores
and specialised shops as in many European cities
of the mid 20th Century. Finally, Phase 3 applies
to cities with higher consumer incomes where
highly developed integrated food retail chains are
dominant.
Kobayashi (2000) extrapolates this development
pattern to form four groups of countries depending
on the development stage of their fresh produce
wholesale marketing system and the degree of
government intervention in marketing. The first
group includes countries where food marketing
is done in "bazaars". in these markets, wholesale
and retail activities are not clearly divided and
there are no government regulations whatsoever
on food marketing. information is the most
important service sought by all stakeholders in
this type of market. indonesia and l a o s are put
in this first group. The second group of countries
 Yilmaz & Yilmaz—Evaluation of the wholesale market system 87

Consumers Abroad

Catering Small formal retailers Open markets

(restaurants etc) (greengrocer etc) (stallholders)

Wholesale Markets Wholesale Markets

t Export
(Consumption region) (Production region)
(Brokers, merchants, (Brokers, merchants,
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.

Cooperatives) shippers, exporters, Cooperative

Cooperatives)
Merchants

Producers

Fig. 1 Turkish fresh fruit and vegetable supply chains.

has enacted laws and regulations clearly defining
and differentiating wholesale and retail activities.
Furthermore, wholesale markets are built and their
activities are regulated by governments. Thailand
and the Philippines both belong to this stage whereas
China and Russia belong to an intermediate stage
between the first and second groups: regulation
exists, but traders still operate both at wholesale
and retail levels. The third stage groups countries
where more than half of the fresh produce marketed
goes through wholesalers. Wholesale markets serve
as important "price discovery institutions". Japan
and South Korea are classified in this third stage.
The fourth stage sees wholesale markets moving
out of city centres and their market share of fresh
produce declining because of fierce competition
from integrated supermarket chains. The United
Kingdom, the United States, France, and Germany
are all in this fourth stage of wholesale market
development (Cadilhon et al. 2004)
in those countries where the farm structure and the
marketing system remain fragmented and cooperatives
and farmer groupings are largely underdeveloped
(as is the situation in most developing countries
such as Turkey), wholesale markets are still needed
to provide farmers with effective and profitable
marketing outlets for their produce. in addition to
facilitating farmers' access to the marketing system,
wholesale markets, if adequately located, sized,
and managed, are basic instruments for promoting
competition and improving public health and food
quality control. This thereby lowers and stabilises
consumer prices and reduces postharvest losses
as well as urban congestion and pollution. The
high rates of urban growth in african and asian
developing countries will continue and create a
need for both expanded and new wholesale markets,
especially in the rapidly expanding "secondary"
cities in many countries (Seidler 2001).
FFV markets in Turkey are characterised by the
special structure designed by official legislation.
The first internal trade arrangment of fresh fruit
and vegetables came into force in 1930 (law No.
1580). article 15 authorised the municipalities to
found and manage wholesale markets for fresh fruit
and vegetables and other food articles such as meat,
butter, fish, oil, etc. After the first arrangement, the
l a w for the administration of Wholesale markets
(law No. 80) was enacted in 1960 for the purpose
of regulating wholesale marketing of fresh fruit and
vegetables. The enforcement of this law has been
left to municipalities (anon. 1960). in 1984, l a w
No. 3033 was adopted giving municipalities the
authority to set up private wholesale market halls
(anon. 1992). With this law, elasticity was brought
to the establishment of wholesale market halls. The
 88 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36
law also gave municipal councils the authority to
regulate wholesale market halls in towns with a
population over 250 000 whereas the ministry of
industry and Commerce was given that authority in
towns with a population below 250 000.
l a w No. 80, enacted in 1960, did not regulate
product quality, determination of prices, storage
conditions, and a host of other issues. To fill the
gaps in these areas, the municipalities set up
regulations based on temporary article 2 of the
l a w (Giray 1988). Deficiencies in the law with
respect to product quality, product standardisation,
and price determination have been remedied by
the Government Decree No. 552 (The Decree for
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
Regulation of Trading of Fresh Fruits and Vegetables
and Wholesale Markets) published in the Official
Gazette on 27 June 1995 (anon. 1995). meanwhile,
law No. 4128, published on 7 October 1995, along
with Decree No. 552 established a series of penalties.
The l a w enacted in 1998 (law No. 4367) was a
revised form of Government Decree No. 552 (anon.
1998). Finally, the latest law (No. 5652) concerning
the modification of Decree No. 522 was accepted on
5 May 2007 (Anon. 2007). These latest modifications
include that: (1) all founding authorities of wholesale
markets were transferred to municipalities; and (2)
possibility of privatisation of existing wholesale
markets were obtained.
Government Decree No. 552 (Hall law), with
amendments, regulates: the domestic trade of fresh
fruit and vegetables; establishment and management
of wholesale markets; the authorities and duties
of ministries and municipalities concerning the
aforementioned issues; quality, standards, and
hygienic principles; and the rights of producers,
consumers and middlemen involved.
The aim of the l a w is to sustain free competition
for FFV trade. The l a w defines FFV wholesale
market as the only location where wholesale and
purchase of FFV is realised. The l a w strictly
forbids wholesale and purchase of FFV anywhere
other than wholesale market halls. Those who retail
products within the borderlines of the municipality
or within township areas have to prove that these
products were bought from the wholesale market
hall. However, legislation includes some balanced
regulations (exceptions) related to wholesaling
mandatory at the hall.
The major marketing choice for producers is
brokers (commissioners) at the hall. Only in special
instances can producers sell directly to other agents.
A simple supply chain relationship for FFV producers
in Turkey is illustrated in Fig. 1.
Hall l a w (article 14) states that "producers can
retail their produce at producer markets (in practice
open markets) directly to consumers (outside of
wholesale markets), provided they do not exceed the
amounts already determined by the municipality".
Thus, producers have gained the right to sell their
goods directly to consumers.
The second exception to wholesaling mandatory
at the hall is selling to retailers by cooperatives and
cooperative unions. it is required that such sales
are declared to Wholesale market Directorates and
registered at the end of the day of sale (article 6).
Furthermore, goods classified as "exportable" do not
have to be sold at the wholesale market hall (article
7). However, fresh fruits and vegetables bought by
producers of tomato paste, canned goods, fruit juice
and its concentrates are not included here (article
28) (anon. 1998). Besides, organic products were
exempted from Hall law according to the Organic
agriculture l a w (anon. 2004).
The people who buy directly from the producers
with a producer receipt or a sole invoice for wholesale
or retail within the borderlines of the municipality
or township areas, have to inform the Wholesale
market Directorates by providing copies of the
receipts. in this instance, products do not include
wholesale markets and a 15% municipality fee is
charged on the amount on the producer receipt or
invoice.
Wholesale market hall structure
and the pricing mechanism
The building complex of the antalya metropolitan
municipality wholesale market hall encompasses the
Wholesale Branch Directorship offices along with
703 business establishments and service buildings.
Of these, 319 belong to merchants, 144 to brokers,
and 98 to agricultural chemical dealers. in addition,
the wholesale complex contains banking, restaurant,
and social facilities.
Management
The wholesale market halls are managed by the
Hall Directorship, a subunit of the FFV Wholesale
market Branch Directorship. The FFV Wholesale
market Branch Directorship is responsible for
the protection of the rights of producers, brokers,
merchants, stallholders, the municipality, and the
ministry of Finance in the buying and selling of fresh
fruit and vegetables. also, the Branch Director is
responsible for the prevention of illegal transactions
and has the authority to determine the penalties for
those involved in illegal transactions. moreover,
 Yilmaz & Yilmaz—Evaluation of the wholesale market system
it is responsible for supervising and coordinating
all activities in and out of the wholesale market
complex. in the hall, all these responsibilities are
handled by a staff of 60 personnel. The Hall Director,
on the other hand, is responsible for the management
of the wholesale market hall. The Director takes
every necessary precaution with respect to the arrival
and departure of goods as well as their protection and
storage and ensures that these activities are carried
out according to existing regulations. additionally,
the Director has the authority to confiscate for 7 days
the vehicles of those wholesalers, transporters and
warehouse owners involved in illegal wholesale or
retail transactions.
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
Committee of Umpires
A Committee of Umpires has been set up at
wholesale market halls with the responsibility to
solve disagreements and to present opinions on
matters brought before it. The functions, authorities,
and modus operandi of the Committee are set by
ministry of industry and Commerce regulations
(anon. 2001).
The provincial Director of industry and Commerce
or one of his appointees heads the Committee, which
is composed of the following members: a member
from the municipality (the Hall Director cannot
assume this position); a member from the local
Chamber of agriculture; a member from the local
Chamber of Commerce; a member elected for 2 years
by the associations of wholesale brokers working
at the hall; and a member appointed by the local
consumer protection association with the largest
number of members in the locality. if an association
is not present at the locality, the municipal executive
board appoints a member for the seats reserved for
the association.
The parties can object to the decisions of the
Committee of Umpires within 3 days. Following the
objection, the issue is taken up again by the Committee.
if the concerned party objects a second time, the issue
is brought to the municipal executive board.
Producers
The producers at the wholesale market hall deliver
their goods to the brokers for the purpose of sale.
Here an arrangement can be made between the
parties to determine the minimum price or advance
payment. according to the agreement reached, the
producers can get an advance payment to cover
variable costs. This amount is then deducted from
the sales revenue. The matter of how the producers
choose or change brokers is to be done in accordance
89
with set regulations and the leeway for the producers
here is constrained (anon. 2001).
according to Hall law, off-the-record sales (sales
transacted outside the wholesale market hall without
proof of invoice) are to be avoided by the producers.
Only small producers can retail their goods weighing
200-500 kg at an open market (bazaar). This sale can
be done under the supervision of staff appointed by
the wholesale market hall Director. The producers
pay 15% municipality fee for such sales.
Brokers
A broker (commissioner) does not take ownership
of the product and negotiates with wholesalers on
behalf of producers. The brokers are responsible
for submitting their sales records daily on detailed
invoice forms to the Wholesale market Director.
The brokers can legally receive a maximum of 8%
of the total amount of the sale. in addition to 8%
commission, the brokers are required to deduct a
2% municipality fee (tax), a 2% stoppage tax (excise
tax), a 1% value added tax (8% at the deliveries out
of the hall), and a 0.1% social insurance fund by
declaring them on the producer's receipt. Of these
deductions, the broker pays the municipality fee (tax)
at the wholesale market hall directorship and the
other deductions at the tax office. The broker pays
15% of his commission as income tax, and 0.1% to
Bagkur, the social security fund.
Merchants
The merchants buy the goods from the brokers at
the wholesale market hall and sell them in their own
name. They can be individuals or corporate entities.
They are required to present the customer with a
despatch list and to pay 0.1 % of the goods as income
tax to the Chamber of Commerce.
Export merchants are exempt from fees and taxes
and they are under no obligation to show the goods
that they bought and their invoices to the wholesale
market directorship. in other words, they are
independent of the wholesale market directorship.
Organisations
Those who carry out their business activities at the
wholesale market hall as individual or corporate
bodies have the right to organise to protect their rights.
These organisations are Producers' Unions, Brokers'
Associations, and Merchants' Associations.
Producers'unions
Producers' unions are cooperatives and unions of
cooperatives. Cooperatives must be established by
 90 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36
at least 50 farmers and by those producers registered
with the Chamber of agriculture. The ministry of
industry and Commerce oversees producer unions
and sets minimum standards that must be followed
in the related wholesale market halls and the rules
and methods to abide by in their selling activities
(anon. 2001).
if it can be proven that the goods were bought from
the producers union and then sold to the consumers,
the rule that there must be documentation that the
goods were bought at the wholesale market hall does
not apply. However, wholesale market hall sales by
producers' unions must be made to the institutional
retailers. Furthermore, producers' unions must report
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
and register their sales (in which the kind, amount,
and price of the goods are stated) to the nearest
wholesale market hall by end of business on the day
after the day of sale. With this rule, an important
exemption is brought to producers' cooperatives and
hence to the producers. Yet, producers do not benefit
from it yet because producer organisations are not
yet complete. Furthermore, here the term producers'
union rather than producers' cooperatives is used,
which causes confusion in people's minds.
Association of Brokers
The main purpose of the association is to protect
the rights of brokers, to solve the disputes between
its members and other parties, and to ensure
that relations with groups such as producers and
merchants are carried out in an appropriate manner.
all brokers working in the antalya metropolitan
municipality are members of this association.
Association of Merchants
The association of merchants carries out its
activities under the name of antalya Vegetable and
Fruit merchants Dispatchers Solidarity association
(aNTESE). it has 316 members who are in the
vegetable and fruit business. The association works
toward protecting the rights of its members and
resolving disputes that may arise among them. it
also works towards resolving disputes between
merchants, brokers, and producers.
Pricing
The price of fresh fruits and vegetables is determined
every morning by the Price Determination
Commission by taking into consideration the quality
of the produce along with the demand by the buyers.
The Commission is composed of nine members: two
representatives from the association of Brokers, two
representatives from the association of merchants,
one representative from the Consumer Protection
association, one representative from the Chamber of
Agriculture, one representative from the Producers'
association, one representative from the Chamber
of industry and Commerce, and one member of
the Wholesale market Hall Directorship. The
Commission convenes every morning at 0900 h in
the administrative building of the Wholesale market
Hall Directorship.
Because sales at the wholesale market halls
start early in the day, most of the goods to be sold
are made ready at the sale posts of the merchants
and brokers early in the morning. in accordance
with the day's supply and demand, the price set by
the Commission is declared. after that, the staff
designated by the wholesale market hall Directorship
makes a list of the prices and delivers it to the
Directorship. merchants and brokers are required
to sell their goods in accordance with this price
list although prices may change during the selling
period according to supply and demand. Because the
goods may not be of the same quality, the prices of
fresh fruits and vegetables may fluctuate 20% above
or below the price set by the Price Determination
Commission. also, the prices set by the Commission
may be increased or decreased by 10% according to
the supply and demand of the day, thus preventing
a wide fluctuation of prices.
Even though the Price Determination Commission
consists of nine members, generally, the price is
determined by haggling between the representatives
of the association of merchants and the association
of Brokers, with the participation of the Directorship
representative.
Because producers are not represented sufficiently
at the Price Determination Commission and because
of consignment sales, producers are passive in the
pricing process, which works to their disadvantage.
Weak bargaining power and market failures in the
output markets are common problems faced by small-
scale farmers, especially in developing countries.
Small volumes to be sold through a limited number
of intermediaries result in individual farmers having
little bargaining power. Their bargaining power
is even weaker when dealing with fresh produce,
owing to high agency and transaction costs and lack
of farmer cooperatives (lemeilleur at al. 2006)
Opinions of producers
Some farm and farmer characteristics of surveyed
farms are provided in Table 1. in Turkey, greenhouse
production is generally carried out by small family
owned enterprises. in the research area, the average
 Yilmaz & Yilmaz—Evaluation of the wholesale market system 91

size of operated land was found to be 27.4 decares
(2.74 ha). Nearly 72% of this amount is devoted to
the production of field crops, c. 9% to open field
vegetable growing, c. 16% to vegetable growing
in greenhouses, and nearly 3% to fruit production.
in the investigated farms, production area was
2.8 decares (0.28 ha) and 1.5 decares (0.15 ha)
for glasshouse and plastic house, respectively. in
glasshouses, planting rate of tomatoes, cucumber,
peppers, and eggplant is 85.3%, 5.9%, 5.9%, and
2.9%, respectively. also, a small area of beans is
planted. Plastic house areas are mostly devoted to
tomato production. in addition to tomatoes, farmers
produce cucumber and peppers.
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
the market, though some vegetables are consumed
at home.
The absence of farmer cooperatives related to
FFV marketing in the research area limits farmer
intermediation preferences. Only a minority of
small FFV growers (less than 1%) are organised
in traditional cooperatives (development and FFV
cooperatives) at the village level in Turkey. One
hundred and twenty cooperatives have a significant
activity of FFV production but only 20 of them have
taken advantage of the exemption clause of the Hall
law, allowing them to bypass the commissioner
and accordingly not pay their commission. indeed
the great majority of the 120 cooperatives are still

The age of the farmers ranged from 19 to 60 years,
with the average of 38.2 years. The farmers were
classified into three groups as: young (19-30 years
old); medium (31–40 years old); and old (41-60 years
old). The distribution of farmers by age groups was
found to be 23.4%, 46.9%, and 29.7% respectively.
A small number of farmers interviewed (1.6%)
was found to be illiterate. many farmers (71.9%)
were graduates of primary school, whereas 23.4%
were secondary school graduates. Only 3.13% had a
higher education. These results show that educational
levels of farmers are not adequate.
In plastic greenhouses, nearly all the fields are
devoted to tomatoes and few fields to cucumbers and
peppers. Open field vegetable growing is devoted to
mostly melon (32%), watermelon (24%), tomatoes
(24%), beans (8%), peppers, eggplant, and squash
(4.0%). a t the time the survey was conducted (June),
57.8% of producers sold tomatoes, 18.8% peppers,
12.5% eggplants, and 10.9% cucumbers. in all the
investigated farms, production is predominantly for
marketing their produce through a commissioner
(lemeilleur at al. 2006). Thus, the producers can
sell their produce mainly through brokers at the hall.
about 98.4% of producers deliver their produce to
the local brokers, whereas 1.6% transfer or leave
their produce to the merchant at the garden (Table 2).
more than 52% of the farmers interviewed indicated
that sales assurance was the main factor in their
choice of broker. Sales assurance was followed by
absence of direct marketing possibility (15.5%), legal
mandatory (12.7%), assurance advance payment
(7.1%), absence of alternative buyer (7.0%), and
relationship with broker.
The average working period with the present
broker was 9.1 years, ranging from 1 to 30 years.
62.5% of producers have been working together at
least 5 years with the same broker. Furthermore, the
average working period rises when the greenhouse
size group increases (Table 2). although the working
period differences between the greenhouse size groups
were found to be statistically significant (α = 0.05),

Table 1 Some farm and farmer characteristics of surveyed farms (means).

Greenhouse size groups (ha)

items 0.01-0.20 0.21-0.50 0.51+ all farms
Total number of sampled farms 56 52 20 128
Total area (da (ha)) 28.7 (2.87) 23.8 (2.38) 33.2 (3.32) 27.4 (2.74)
Field crop area (da (ha)) 24.5 (2.45) 16.9(1.69) 14.0(1.40) 19.7 (1.97)
Greenhouse area (da (ha)) 1.6(0.16) 3.5 (0.35) 13.9(1.39) 4.3 (0.43)
Glasshouse (da (ha)) 1.1(0.11) 2.3 (0.23) 8.6 (0.86) 2.8 (0.28)
Plastic house (da (ha)) 0.5 (0.05) 1.2 (0.12) 5.3 (0.53) 1.5(0.15)
Open field vegetable area (da (ha)) 2.5 (0.25) 3.0 (0.30) 1.2(0.12) 2.5 (0.25)
Fruit area (da (ha)) 0.2 (0.02) 0.4 (0.04) 4.1 (0.41) 0.9 (0.09)
Farmer age (year) 38.9 37.7 37.8 38.2
Farmer education (%)
illiterate (%) 0.00 0.00 10.00 1.56
Primary education (%) 75.00 80.77 40.00 71.87
Secondary education (%) 25.00 15.38 40.00 23.44
 92 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36

the differences in terms of education levels and
age groups were not statistically significant. Every
producer has the right to choose, within certain
limits, his or her broker. Trust (36.2%), relationship
(23.6%), good selling performance (17.4%), and
advance payment (14.5%) are the major factors
affecting the selection. Suggestions, the broker's
age, experience, and education are also taken into
account by the producer.
it is stated that there are close cooperation and
strong ties among growers and brokers in the research
area. most of the farmers (79.7%) believe that brokers
balance their own and the producer's benefit (Table 2).
Chi-square analysis shows that the rate of confidence
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
Growers can receive cash and/or in kind loan
from a broker as an advance. Thus, 46.9% of the
producers get advance payment with 96.9% of it
given by the brokers, whereas 3.1% is given by the
chemical agents. The usage rate of advance payment
is statistically dependent on both greenhouse size
groups (α = 0.05) and age groups (α = 0.05). The
rate of confidence in the broker was highest in the
medium farms and secondary education level. The
usage rates of advance payments were highest in the
medium and small farms and farmers in the older
age group (63.2%).
in kind loans vary between 170 New Turkish
liras (YTl) and 770 YTl, whereas cash credit

in the broker is statistically dependent on greenhouse
size groups (α = 0.05) and education level (α = 0.05).
The rate of confidence in the broker was highest in
the medium farms and secondary education level.
Growers were also asked questions about problems
with the brokers. The rate of growers not having
a problem with the broker was 78.1%. This ratio
in medium and large greenhouse groups is higher
than that of the small greenhouse groups, however,
statistical significance was not found in any groups
(Table 2). The most important problems growers have
with brokers are the delaying of sale value (43.7%)
and advance payment issues (43.7%). Other identified
problems are low price and insufficient bargaining
power with the broker.
Greenhouse production requires more intensive
input use than other agricultural crops. This intensive
input usage can lead to financial problems for
growers. This problem is exaggerated because of
the mainly small scale of farms that operate in the
research area. The main credit sources for growers
are the agricultural Bank, credit cooperatives,
chemical agents, and brokers (Yilmaz et al. 2005).
varies between 50 YTl and 750 YTl. The results
show that the average amount of advance payments
(in cash and in kind) were 349.8 YTl in the sampled
farms (Table 2). However, the average amount of
advance payments increases as the greenhouse size
group increases. But analyses of variance show
that the average amounts of advance payments are
not statistically different in any groups. Reasons
for receiving advance payments are: for household
needs (42.6%); plant seedlings (26.4%); seeds
(13.6%); manure (9.4%); manure and household
needs (4.8%); and seeds and manure (3.2%).
Of those producers receiving advance payment,
98.4% is paid as debt upon the sale of their produce.
26.7% of the producers who received advance
payment stated that the advance payment they
received was sufficient, whereas 73.3% thought
otherwise. A sufficient rate of advance payment was
not found statistically dependent on any features.
Producers who received advance payment can work
only with the broker who extended them the credit.
Evidence suggests, however, that growers' bargaining
power is adversely affected by receiving a loan from

Table 2 Producer's preferences and opinions. (YTL, New Turkish Liras.)

Greenhouse size groups (ha)

items 0.01-0.20 0.21-0.50 0.51+ all farms
Preference rate of broker at hall (%) 100.00 96.15 100.00 98.44
Preference rate of merchant at farm 0.00 3.85 0.00 1.56
Working period with present broker (year) 7.21 9.96 12.00 9.08
Rate of grower confident with the broker (%) 71.43 88.46 80.00 79.69
Rate of grower having problem with the broker (%) 25.00 19.23 20.00 21.87
Usage rate of advance payment (%) 50.00 53.85 20.00 46.87
amount of advance payment* (YTl) 304.28 366.79 550.00 349.83
Sufficiency rate of advance payment* (%) 21.43 28.57 50.00 26.67
Rate of arranged agreement (%) 3.57 11.54 0.00 6.25
Period of receiving sales value (day) 22.89 15.58 22.70 19.89
*
Considering advance payment users.
 Yilmaz & Yilmaz—Evaluation of the wholesale market system
the brokers. a large portion of the growers (90.6%)
indicated that they don't have bargaining power.
The percentage of producers making an agreement
with brokers related to price, paying provisions of
turnover, etc, is only 6.3%. The rate of arranged
agreement is statistically dependent on age group (α
= 0.01). The rate of arranged agreement rises from
0.0% to 15.8% when the age group increases.
23.1 % of producers stated that they received their
sale value on delivery or within 5 days of the sale,
whereas 19.2% stated they received payment within
20 days of the sale. 57.7% stated that they got the
sale value more than 20 days after the sale. The
average period of receiving the sale value was found
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
to be 19.9 days. Besides, the results of statistical
analysis reveal that the average period of receiving
the sales value by different categories of farm groups
did not show any significant variation. However,
legally, the producer must get the sale value within
a maximum of 5 days after the sale.
65.6% of producers stated that they received
information about market conditions and prices
before the sale. Of these, 40.5% received this
information by telephone, 16.6% by coming to the
wholesale market hall, and 9.5% by asking other
producers, and 33.4% by using all three means.
Opinions of brokers
The age of the brokers varied from 26 to 55 years,
with the average being 40 years. The majority of
brokers (57.7%) were between 26 and 40 years old,
and 42.3% between 41 and 55 years old. 30.8%
of the brokers were graduates of primary school,
whereas 53.8% were secondary school graduates.
Only 15.4% were college and university graduates.
When the brokers were asked if they have had staff
educated in marketing, only 7.7% replied positively.
The work experience of the brokers at the wholesale
market varied between 5 and 40 years, with the
average being 18.3 years.
Of the brokers included in the research, 80.8%
sold only goods bought from the producers, whereas
19.2% sold goods bought from other brokers,
merchants, and from vegetable gardens. Since it
is forbidden for brokers to buy from other brokers,
merchants, and gardens, this finding shows that there
is not sufficient control over this matter.
88.5% of brokers in the research made advance
payments to the producer they worked with. 57.7%
stated that they made the advance payment for
produce guarantee, 7.7% for quality produce, 26.9%
for produce guarantee and quality produce, and 7.7%
for the private needs of producers.
93
A number of brokers put forth conditions for
making advance payment to producers, such as the
condition in which the produce be sold to the broker
in question, that advance payment be made near the
harvest time, that the broker has trust in the producer,
that the amount of the advance payment be small.
80.8% of brokers insisted on receiving a collection
receipt, a check or bond, indicating that an advance
payment had been made. 19.2% of brokers stated
that growers to whom they had extended advanced
payment would not sell the product to another
broker. When asked the reason, 84.6% replied that
trust would be broken, whereas 11.5% stated that a
bond was taken, and 3.8% stated that other brokers
would not buy it.
Only 3.8% of brokers make agreements with
producers for the value of the whole produce sold.
23.1% of brokers pay on delivery of the produce,
whereas 57.7% work on credit. The rest of the
brokers stated that they used both previous means
of payment.
When asked whether the producers interfered
during sales transactions, 19.2% of brokers stated
that they did. However, the data show that especially
on pricing, the producers had little, if any, influence.
according to the brokers, those individuals or groups
influential in determining the sales and prices are
the brokers (57.7%), producers and brokers (3.8%),
brokers and merchants (30.8%), brokers and wholesale
market hall management (7.7%).
a s in other wholesale market halls, in the antalya
wholesale market hall the commission charge is not
applied at the same ratio to all producers. Here, that
the producer is related to the broker (80.8%), that the
producer has received an advance payment before
(7.7%), or that there is an agreement between the
two (11.5%) influences the ratio applied.
When asked whether there were any off-the-
record business transactions at the wholesale market
hall, 50% replied "yes, there were". among those
who replied "yes" 57.6% stated that off-the-record
transactions occurred because the produce did not
enter the wholesale market hall, 23.0% because the
produce was directly taken from the garden, and
19.2% because the invoices were not prepared.
CONCLUSION AND SUGGESTIONS
The fresh fruit and vegetable market in Turkey
is characterised by the special structure designed
by official legislation and by social and financial
relationships for small family farm holdings. The
 94 New Zealand Journal of Crop and Horticultural Science, 2008, Vol. 36
basis of the fresh fruit and vegetable marketing
system has been the wholesale markets, located near
production and consumption areas. The wholesale
market system carries out considerable functions.
These are identified as facilitating small and medium
farmers' access to the marketing system, obtaining
a sustainable market constitution, promoting a free
competition environment, and continous and fast
provision of goods for consumers.
On the other hand, the wholesale FFV market
system has some negative aspects. Generally, there is
a long and complex supply chain between producers
and consumers in marketing FFV. A long supply
chain exaggerates marketing costs and margins.
New Zealand Journal of Crop and Horticultural Science 2008.36:85-95.
Complexity makes traceability of goods difficult.
Quality and standards for domestic trade are not put
into practice. Many small wholesale markets were
founded without sufficient infrastructure, causing
postharvest and quality losses, illegal transactions,
etc. The results of the survey with the brokers show
that there have been deviations in practice from the
relevant legal framework, despite penalties. Such
deviations indicate some problems with the control
mechanisms.
Brokers are still the dominant and most efficient
form of intermediation in this study and the Turkish
FFV wholesale markets. There are two main reasons
why farmers sell through a commissioner. First, the
commissioner, as a producer's agent, can provide
small farmers with easy and efficient access to the
output market. Results of the study show that sales
assurance is the main factor in choosing the brokers.
Specialised in assembling small and heterogeneous
volumes of fresh produce that fit in with wholesalers
demand, they have experience and marketing skills
that allow them to clear out the market at a free market
price for the producer. Second, the commissioners
provide small family farmers with short-term credit
(advance payment) to cover their variable costs. It can
be argued that the advance payment system limits the
marketing alternatives available to producers while it
pacifies them.
From a legal standpoint, there has been a
considerable effort to achieve a balance between
the producers, brokers, and merchants. However, the
interests of the producers are not being sufficiently
protected in the present wholesale market system.
This is mainly because producers have not been
able to organise cooperatives. Increasing the
influence of the producers in this process can be
achieved primarily through cooperatives in which
the producers can become active participants.
However, efforts to accomplish such a goal have
not yet proved successful. The public must bear
some of the responsibility in this matter as there have
been doubts whether they approve of the producers
getting organised. It is not quite clear why the term
"Association of Producers" is used rather than
"cooperative" as this causes considerable confusion
in the public mind.
ACKNOWLEDGMENT
This study was supported by the Scientific Research
Administration Unit of Akdeniz University.
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