Especially after the Second World War, both in developed and to some extent developing countries, agriculture became highly mechanized and specialized as well as heavily dependent on agro‐chemicals. Such intensification of farming has produced higher yields and greater wealth but has also created some problems affecting the environment, food and farm‐worker safety. Today, different farming systems are subject to discussion and research to discover an alternative to this current agriculture such as organic production, to create conditions for sustainable agriculture and development. Organic farming has been developed in most Western countries such as the USA, Canada, Japan and European Union. In Turkey, organic farming is relatively new, but the number of producers involved in organic production activity has been increasing rapidly since the mid 1980s mainly by the relationships of some multinational companies in order to export organic products to the developed nations especially to the EU. Developing countries like Turkey have some advantages and also challenges for organic food and fiber production. First of all low‐input traditional systems are still a major part of those countries’ agriculture. Contrary to the developed countries, organic agriculture practices can help the farmers to increase productivity and to protect natural resources through using proper technological systems and also easy access to market and information. As in Turkey, most developing countries have small domestic organic markets and have begun to seize the export opportunities presented by organic farming. The main challenges they face are not having proper production practices, certification organizations and being tied only to foreign markets. It is a fact that development of organic production in these countries requires farmers to act in an organized manner instead of depending on a certification, export or import companies or a governmental body. The role of the government, of course, is also important to establish a legislative base and to support organic farming by convenient policy measures.
Production technology used in the Turkish broiler sector is well developed. Eighty percent of production is mostly carried out at integrated facilities, using internationally competitive techniques that are employed in developed countries. Broiler slaughter capacities are 15 000-17 000 units/h. The increase in the concentration ratio of top four firms (CR4) in the broiler sector has caused doubts about the competitiveness. According to 2004 data, the top 20 firms produce 84% of the total production and CR4 is 38.7%. In this study, a differentiated product oligopoly model has been applied to the Turkish broiler sector, and the price competition from 1998 to 2004 has been analysed. The top five firms, which have the highest competitive power and which are the only firms that meet the European Standards and are exporting broiler meat to the EU countries, have been included in the analysis. The results show that these firms have elastic demand and positive price cost margin.
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