Due to the decrease in carcass slaughter prices and the inability of the breeders to cut their animals in 2019, the state intervened through Meat and Dairy Institution (ESK) and cut the animals in the hands of the breeders.
However, the money for this intervention to support the breeder was paid with loans drawn from banks with high interest, instead of being covered by the Treasury.
While the ESK has a financing debt of 1.5 billion liras to banks at the end of 2020, the interest expenses in 2019 and 2020 were mind-boggling.
Paying interest of 264 million liras to banks in 2019 and 228 million liras in 2020, the ESK serves the rentier, not the farmer or producer, as it stands.
Although the ESK did not make a serious intervention purchase in 2020, it announced a loss of 380 million liras due to high interest expenses.
Farmer-owned institutions are also exploited with high interest
As the interest payments made from the budget increase every year, it has been revealed that the institutions established to support the farmers and producers are also exploited with high interest rates.
The Meat and Dairy Institution's independent audit report for 2020 was mind-blowing.
Meat and Milk Institution, which has the duty of regulation so that the breeder does not make any loss in livestock and the consumer can consume meat and milk at affordable prices, announced a loss of 379 million liras in 2020, while it was thought-provoking that 228 million lira of this loss was due to interest expenses.
As it is known, due to the decrease in red meat consumption in 2019, the breeders became unable to cut their animals.
While carcass slaughter prices decreased due to the decrease in demand, the breeders also suffered great losses.
In order not to cause much damage to the breeders, the ESK stepped in and took the slaughter animals that the breeders could not cut in the market and had them cut in their combines.
While there was a very high demand for the ESK, the money for the animals taken from the breeders was paid with high-interest loans used from banks, which should normally be paid with funds from the Treasury. The cost of this was very heavy for the ESK.
BORROWED OVER ITS OLD PAID CAPITAL
While it is thought-provoking that the livestock of the breeder was purchased with high-interest loans from banks, not with the resources provided by the Treasury, it reveals who the system serves.
The ESK, which made high short-term borrowings from banks, faced a terrible interest expense in return.
Using loans from banks even above its paid-in capital, the ESK paid 264 million lira in 2019 and 228 million lira in 2020 in return for this.
In 2020, apart from the high interest payment, the expenses of the total financing costs together with the exchange difference expenses and other financial expenses increase up to 238 million liras.
Supporting the breeder and producer with high interest loans from banks, not taxes collected from the public, also reveals the distortion in the government's agricultural policy.
Due to the high interest payments, the ESK announced a loss of 379 million lira in 2020.