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Cablegate: Cargill and Adm Move a Step Closer to Higher Sugar

This record is a partial extract of the original cable. The full text of the original cable is not available.

171438Z Sep 03

UNCLAS ANKARA 005879

SIPDIS


DEPT FOR EB/IFD/OIA
DEPT PLEASE PASS USTR FOR LERRION
USDA FOR FAS/ITP HENKE, MEYER, HANSEN


SENSITIVE


E.O. 12958: N/A
TAGS: EINV EAGR TU
SUBJECT: Cargill and ADM Move a Step Closer to Higher Sugar
Quota but Zoning Question Still Pending


1. (SBU) Summary: A key GOT board has recommended
increasing the quota for corn syrup producers to 15 percent
of the total sugar quota, which, if implemented, will help
Cargill and ADM/TateLyle avoid production losses on their
massive investments in Turkey. Although the sugar beet
industry is protesting this recommendation, Cargill believes
the GOT Council of Ministers is likely to approve the
increase. On Cargill's zoning issue, the Industry and
Commerce Ministry has still not forwarded draft zoning
amnesty legislation to the Council of Ministers. End
Summary.


2. (U) The GOT's Sugar Board recently recommended increasing
the quota for corn syrup producers to 15 percent of the
total sugar quota for the coming year. This should enable
Cargill and ADM/TateLyle, which have made the largest
foreign investments in Turkish agriculture, to avoid the
heavy financial losses that the Sugar Law's 10 percent
default quota would have imposed. However, the sugar beet
industry has launched a public campaign against the
decision, which has yet to be ratified by the Council of
Ministers. The sugar beet producers union has placed
advertisements in the Turkish press protesting the quota
increase and claiming that beet sugar inventories now stand
at some 528,000 tons. Industry and Commerce Minister Coskun
has publicly disputed some of the sugar beet producers
claims. Cargill believes the Cabinet will approve the quota
increase at its next meeting on September 22.


3. (SBU) Unfortunately, there appears to have been no
movement on the unresolved zoning issue that threatens to
shut down Cargill's plant in Orhangazi. Industry Minister
Coskun has repeatedly promised to seek the Government's
support for legislation that would, in effect, grant an
amnesty to Cargill for having built its factory on
agricultural-zoned land. However, the Ministry has yet to
forward the draft legislation to the Council of Ministers,
saying it is still collecting opinions from other concerned
bodies.


4. (U) Cargill also reported developments in the two legal
cases against it, both of which relate to zoning. In the
first case, involving Cargill's construction permit, the
relevant decision of the Danistay (State Council) ruled that
Cargill's opponents were not eligible to contest the permit
issuance. However, the same Danistay decision ruled in
favor of those same opponents' suit against Cargill's
emissions permit. Cargill is now appealing that decision to
the full Danistay. Given the uncertainties of how the
Danistay will rule, Cargill is pushing hard for the new
zoning legislation.


5. (SBU) The Ambassador raised the zoning issue recently
with Finance Minister Unakitan, who offered to meet with
company representatives. We have so advised Cargill, which
told us they would seek a meeting. Edelman

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