The first implementation of the modern co-operatives in Turkey started with the “Country Fund” (Memleket Sandigi) (a body similar to agricultural credit co-operatives) which was established by the state in 1863. However, the first significant development was realized during the Republic Period.

All legal arrangements on co-operatives between 1920 and 1938 and were realized in the leadership of ATATURK.

However, one of the most important developments of the post- Planned Period was without doubt the inclusion of a provision on co-operatives in the Constitution. Article 51 of the 1961 Constitution includes the provision“The Government shall take all the measures to improve the co-operatives” and this has made the state more active and responsible for the advancement of co-operatives.

First off, co-operatives were implemented in the fields of agricultural and because of social and economic factors. Later, co-operatives became common in fields like transportation, consumption, credit- surety, but particularly in the construction of houses / workplaces due to the changes in economic and social structure and new emerging requirements.

Today, there are 84,232 co-operatives of 26 different types: 

Agricultural Development Co-operatives - Irrigation Cooperatives - Fisheries Cooperatives - Beet Planters Co-operatives - Agricultural Credit Co-operatives – Housing Co-operatives - Housing Co-operatives in Small Industry Areas - Collective Workplace Housing Co-operatives -  Agricultural Sales Co-operatives – Free ASC -Tobacco Agricultural Sales Co-operatives - Raw Vegetables and Fruit Co-operatives - Consumers’ Co-operatives - Motor Carriers Co-operatives  - Tradesmen and Craftsmen Co-operatives - Small Art Co-operatives - Supply and Delivery Co-operatives - Tourism Development Co-operatives - Production Marketing Co-operatives - Supply Guarantee Co-operatives - Publishing Co-operatives - Carrier’s Co-operatives - Management Co-operatives - Insurance Co-operatives - Solidarity Co-operatives - Training Co-operatives

These co-operatives carry out their activities under the assigned duties and responsibility of MoCT (Ministry of Customs and Trade), MoFAL (Ministry of Food Agriculture and Livestock) and MoEUP (Ministry of Environment and Urban Planning).  The total number of the members of these co-operatives is 810,922,521.

Source: Turkish Co-operatives Strategy & Action Plan 2012–2016

Co-operatives in Turkey: A historical overview

With a total membership of 8,1 million people, organized in more than 84,000 primary co-operatives, functioning in 25 different sectors and sub-sectors , the co-operative enterprises comprise the largest and strongest pillar of the social economy in Turkey. According to a recent study, it is estimated that there are 98.688 people working directly with co-operatives.  This is the number of people working in the offices of cooperatives only, and the number of jobs created by cooperatives is in fact much larger than this number. They create jobs at the grassroots level, in processing plants and different stages of value chain system. Because of their important contribution to the national economy in rural and urban areas, cooperatives are known to be the driving force in the social economy.  

The history of cooperative movement in Turkey dates back to 1860s, during the Ottoman Empire era, with the establishment of the so-called “country credit funds” which were similar to and the initial phase of today’s agricultural credit cooperatives. During the early years of the Turkish Republic, in 1930s, agricultural credit and sales cooperatives were established. From 1950s, other types of cooperatives started to emerge, in housing, consumer, artisanal, credit and transport sectors. Starting from 1960s, wage-earners were particularly encouraged in urban and industrialized regions to organise themselves into consumer and housing cooperatives.  The National Cooperative Union of Turkey (NCUT) was established in 1990 as an umbrella organisation. Currently NCUT covers the most important cooperative sectors and represent more than 6 million cooperative members. 

Currently, there are three different laws in Turkey governing cooperatives:

1.    General Cooperative Law No. 1163 of 1969 (for agricultural and non-agricultural cooperatives, except the cooperatives indicated below)
2.    Law No. 1581 of 1972 (for agricultural credit cooperatives and their unions)
3.    Law No. 4572 of 2000 (for agricultural sales cooperatives and their unions). 

A brief picture of the movement by sector is drawn below to highlight its importance in social and economic life of Turkey.

Agricultural Credit Cooperatives (ACC)

Established on the same or similar organization model of the Raiffeisen Cooperatives in Germany, the ACC is the oldest and economically the largest cooperative group in Turkey. The group has 1,3 million farmer-members organized in 1,659 primary ACCs, affiliated to 16 regional unions and one Central Union in Ankara.  The group employs 6,000 workers and professionals. Although its primary function has been distribution of agricultural credit, it has developed additional services and has become a multi-purpose cooperative system. ACC owns and manages 16 different and specialised production and processing plants including tonnes of chemical fertilizers (the largest distributor of fertilisers.  It owns 84per cent of the shares of the largest fertiliser factory (GUBRETAS), seeds (through its own company TAREKS), animal feed (through 7 animal feed factories), agricultural insecticides and agricultural machinery and tools. It is a shareholder and general agent of one of the largest insurance companies.  It is through this channel that it provides agricultural insurance services for its members and their products.. In the year 2010, ACC distributed also USD 410 Million worth of animal feed, USD 171 Million of seed, USD 209 Million of gasoline and USD 90 million consumer goods.[i] ACC has a sum of USD 303 million membership capital fully paid. By the end of 2012, total amount of agricultural credit distributed to its members was USD 7.8 Billion, which makes 19 per cent of the total agricultural credit distributed (second after the largest distributor, the Agricultural Bank with the share of 40per cent). In 2012, it distributed more than 1 million tonnes of chemical fertilizers. In the year 2010, ACC distributed also USD 410 Million worth of animal feed, USD 171 Million of seed, USD 209 Million of gasoline and USD 90 million consumer goods.[ii]

AAgricultural Sales Cooperatives (ASC)

AASCs have 602,248 members organised in 322 primary cooperatives affiliated to 17 product-based and specialised cooperative unions. These cooperatives and their unions employ around 7,000 workers. ASCs work on purchasing, processing and sale of 21 different agricultural products, most of which are considered to be strategically important for the country’s economy. These products include cotton, hazelnut, groundnut, olive and olive oil, figs, grapes, beans, cereals, sunflower oil, silk worm, wool, rose flower, fresh fruit and vegetables, etc. Despite the financial difficulties that they have been facing in recent years and because of the long-lasting process of reorganisation, ASCs continue to be economically strong and hold almost 100per cent market share in purchasing and processing of majority of the above-mentioned products in their regions.[i]

Sugar Beet Production Cooperatives (PANKOBIRLIK)

Over 1, 6 million sugar beet producers organized themselves into 31 primary cooperatives affiliated to the Union of Sugar Beet Producers’ Cooperatives, PANKOBIRLIK. These cooperatives own 6 sugar production factories and 18 specialised companies. The following are the major economic indicators of sugar beet cooperatives:[ii]

• 42 per cent of the country’s sugar production;
• 802 million USD of paid capital;
• total number of employees is 7,300;
• 165 Million USD production credit distributed to members; and
• 3,50 Billion USD in volume of business.

Other Agricultural Cooperatives

There are other types of agricultural cooperatives whose numbers and total membership are as follows:[iii]

• Rural (Village) development cooperatives: Total membership is 842,563 organised in 8.173 primary cooperatives affiliated to 82 unions and four central unions. Among these there are specialised cooperatives such as forest labour co-ops (under OR-KOOP), dairy co-ops, handicraft co-ops, etc.
• Irrigation cooperatives: Total membership is 295,984 organised in 2,497 co-ops affiliated to 13 regional unions and 1 central union.
• Fishery cooperatives: 29,972 members organized in 522 co-ops affiliated to 14 regional unions and one central union.

Housing Cooperatives (HC)     

In terms of number of cooperatives and individual members, housing cooperatives constitute the largest segment of the cooperative movement with 54,996 cooperatives and 1,985,076 members. It is however not definitely known as to how many of these cooperatives are active and how many are dormant or have already completed their functions, but have not yet taken the decision to dissolve. It should also be pointed out that there has been very close and strong relationship between many of these cooperatives and trade unions, because of the concentration of union members within the overall membership of housing cooperatives. For instance, one of the most successful housing cooperative projects with 35,000 dwellings, known as KENT-KOOP, was created mainly by worker-owned housing cooperatives, supported by trade unions. The share of cooperatives in the housing construction sector had reached to 36 per cent in the 1980s and 1990s due to easy access to the low-cost mass-housing credit opportunities. This rate has reduced considerably in recent years, particularly after 2000, down to 6,8 per cent[1], largely due to the introduction of centralized and uncompetitive policies in the housing market.

Artisanal Guarantee and Credit Cooperatives (TESKOMB)

These cooperatives are established by small artisans and traders (small entrepreneurs) mainly working on their own, to obtain credit, on a group-collateral basis, mainly from the Turkish People’s Bank (HALKBANK). There are at present 993 cooperatives with 685,105 members, affiliated to 32 regional unions and one central union in Ankara, TESKOMB.  There is a service company, ESGIMTAS, established by TESKOMB to provide support services to primary cooperatives.[2]  Currently, the total amount of TESKOMB credits is around USD 5 Billion, and 50 per cent of this amount in interest is subsidised by the State.

Transport cooperatives

This is another type of cooperative widespread across Turkey. There are currently 6,734 transport cooperatives with 288,063 members, most of them are bus, minibus and truck drivers, affiliated to 42 regional unions and one central union.

Source: Cooperative response to unemployment in rural and urban Turkey

(from the paper presented to the International Cooperative Summit, Québec, Canada, 6-9 October 2014, by Hüseyin Polat, Senior Adviser, National Cooperative Union of Turkey (NCUT)

[1] Strateji Belgesi, 2012. (Turkish Cooperative Strategy Paper), page 16.

[2] www.teskomb.org.tr

[i] Koop Strateji Belgesi, GTB, 2012. (Cooperative Strategy Document, Ministry of Customs and Trade)

[ii] www.pankobirlik.com.tr

[iii] Koop Strateji Belgesi, GTB, 2012

[i] TKK İstatistikleri 2012 (Statistics of Agricultural Credit Co-ops, 2012)

[ii] TKK İstatistikleri 2012 (Statistics of Agricultural Credit Co-ops, 2012)