Investing in beekeeping products and services to increase their value-added in the health and cosmetics value chains

November 2021

Indicative Return:

10% – 15%

Investment Timeframe

Short Term (0–5 years)

Ticket Size

Less than USD 500,000

Business Model Description

Investments in beekeeping products and services to increase their value-added in the health and cosmetics value chains

Expected Impact

Investments in beekeeping services and products will produce income-generation opportunities for rural communities and contribute to food security.

Regions

Aegean Region, Black Sea Region, Eastern Anatolia Region

Sector
Food and Beverage > Food and Agriculture

Direct Impact SDGs:

Indirect Impact SDGs:

Sector
Food and Beverage

Development need: Significant challenges remain for Turkey in combatting hunger and climate change. The relevant indicators across SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities) suggest that the existing measures are insufficient to reach the target levels of poverty alleviation in the country by 2023, rendering food security and price stability increasingly important.

Policy priority: Turkey’s 2nd Voluntary National Review on the Sustainable Development Goals, 11th Development Plan, and the 2020 Presidential Program place agriculture among the priority development areas. All of these documents highlight concerns over price stability and agricultural productivity. Development within this sector is also vital for rural livelihoods.

Gender inequalities and marginalization issues: The share of women wıorking in the agriculture sector in Turkey is 25.1%, while the share of men is 14.9%. (18) This sector mainly provides employment to women in rural areas as seasonal workers. While this is the case, most of the production equipment are reportedly owned by men. (20) 24.8% of the Turkish population is classified as ‘rural’ by the FAO. (19)

Investment opportunities: There is a growing international and domestic demand for organic and sustainably produced food products. Moreover, advancements in agricultural technology provide opportunities for more cost-effective and sustainable production methods.

Key bottlenecks: Turkish agricultural production mainly consists of smallholder farmers with fragmented land ownership. While increasing quality standards and technological efficiency, it is important to ensure that changes in the procurement and production systems do not drive these farmers out of the market.

Subsector
Food and Agriculture

Development need: Access to adequate food and meeting nutrition needs and increasing agricultural productivity and climate resilient agricultural practices are all areas of improvement for Turkey’s development trajectory. Agriculture contributed to 5.8% of the GDP in 2018, and this figure is expected to decrease to 5.4% by 2023 (2)

Policy priority: Essential development goals noted by the 11th Development Plan, the VNR on SDGs and the 2020 Presidential Program include improving prosperity in rural areas and achieving sustained food security by increasing the yield and quality of agricultural products; the sustainable management of land and water resources; combatting climate change, desertification and erosion; and protecting biodiversity

Gender inequalities and marginalization issues: The share of women wıorking in the agriculture sector in Turkey is 25.1%, while the share of men is 14.9%. (18) This sector mainly provides employment to women in rural areas as seasonal workers. While this is the case, most of the production equipment are reportedly owned by men. (20) 24.8% of the Turkish population is classified as ‘rural’ by the FAO. (19)

Investment opportunities: There is a growing international and domestic demand for organic and sustainably produced food products. Moreover, advancements in agricultural technology provide opportunities for more cost-effective and sustainable production methods.

Key bottlenecks: Turkish agricultural production mainly consists of smallholder farmers with fragmented land ownership. While increasing quality standards and technological efficiency, it is important to ensure that changes in the procurement and production systems do not drive these farmers out of the market.

Market Size and Environment
Critical IOA Unit

Turkey ranks 2nd place in honey production globally (after China in terms of amount produced) and accounts for 6% of the world honey production. The contribution of the beekeeping industry to the Turkish economy is approximately $330 million. (12)

Indicative Return

10% – 15%

Investors considering similar transactions in Turkey target an IRR between 10-15% in this investment area.

Investment Timeframe

Short Term (0–5 years)

Beekeping is not labour intensive, most activities in an apiary do not require large capital costs. In general, beekeping has short-term returns on investment.

Ticket Size

Less than USD 500,000

Market Risks & Scale Obstacles

Business – Supply Chain Constraints
Production is solely focused on honey as returns are sufficient. Derivative and higher value added products are not being produced due to R&D costs and insufficient marketing and sales know-how.
Market – Volatile
“>The adverse effects of climate change on honey bees might be detrimental for this area in the future >Diseases, parasites and predators might harm the honey bee population”

Sustainable Development Need

It is estimated that between US$235 and $577 billions worth of annual global food production relies on direct contributions by pollinators. (9)

Pollinator mediated crops account for about 40 % of global nutrient supply for humans (9), honey and other beekeeping products possess anti-oxidant, anti-bacterial and therapeutic properties. (11)

Gender & Marginalisation

25.1%,of the agricultural workers in Turkey are women. In total, 24.8% of the Turkish population is classified as rural. (18,19) Increasing opportunities in this area will contribute to female and rural employment.

In rural communities where access to income is limited, small-scale beekeeping can be a vital source of livelihood, providing income for 60 thousand people, and indirectly for 500 thousand people. Around 2 million people are engaged in amateur or professional beekeeping activities. (10)

Expected Development Outcome

“Improve food security and contribute to nutrition-rich diets, promote sustainable agricultural practice”

Improve biodiversity as bees act as pollinators and are responsible for about 40% of global nutrient supply for humans (9)

Gender & Marginalisation

“Provide livelihoods and decent work opportunities in rural areas”

Primary SDGs addressed

2 – Zero Hunger

2.1.1 Prevalence of undernourishment

2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)

2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size

2.3.2 Average income of small-scale food producers, by sex and indigenous status

2.c.1 Indicator of food price anomalies

Current Level<2.5 % (2016-18) (1)

Not available

$15,706.89 (2016) (17)

Not available

12.90 (2014) (17)

Target Level0 (1)

Not available

Not available

Not available

Not available

Secondary SDGs addressed

Directly impacted stakeholders

People
Households and small businesses occupied with beekeping and related activities, consumers who gain access to quality nutrition, cosmetic or medicinal products
Gender inequality and/or marginalization
Rural population with low income and /or food security Female population / inmigrants employed in the honey industry
Corporates
Businesses and services using honey and other beekeeping resources as raw material, processing companies, SMEs
Public sector
Research institutions, local authoritis

Indirectly impacted stakeholders

People
Rural populations through increased employment opportunities
Planet
Biodiversity in implementation regions
Corporates
Delivery and cargo organizations

Outcome Risks

Honey bee pollination can cause crop damage. For example, citrus fruits can be cross-pollinated by honey bees and in some seedless species, this produces seeds.

The pesticides used in citrus cultivation might harm honeybees.

Fake honey production and the failure to uphold the industry standards will reduce the export potential of this sector and pose risks on food safety

Impact Risks

Unexpected impact risk

Execution risk

Impact Classification

B—Benefit Stakeholders

What

Important, positive outcome: increased competitiveness in bee products and enhanced biodiversity

Who

Individual producers occupied with small-scale production, food and agricultural researchers, nutrition/cosmetics /pharmaceutical companies using beekeping products

Risk

Medium Risk (Fake honey production and the failure to uphold the industry standards will reduce the export potential of this sector and pose risks on food safety.)

Impact Thesis

Investments in beekeeping services and products will produce income-generation opportunities for rural communities and contribute to food security.

Policy Environment

11th Development Plan: Breeding needs will be met and product diversity will be increased in beekeeping to protect the production dynamics, lifestyles and natural and cultural assets in the villages; traditional crafts/handicrafts, agro-tourism, geographically marked products, ornamental plants.

(2019-2023 Stategic Plan of the Ministry of Agriculture): The 2019-2023 Stategic Plan of the Ministry of Agriculture states the objective to increase product variety and quality in beekeping

(New Economic Program of 2020-2022): The New Economic Program of 2020-2022 states that new support mechanisms will be rolled out within the agriculture sector to support small-scale producers

Financial Environment

Financial incentives: The Ministry of Agriculture and Forestry Beekeping Support Program offers 15 TL support per hive and other such small-scale financial assistance for beekeepers. (13) ORKÖY provides micro-credits to women (housewives) living in rural areas (16)

Fiscal incentives: Ziraat Bank provides credit support with an upper threshold of 2.500.000 TL and a net interest rate of 10% for beekeepers who possess a minimum of 50 hives (14). The Bank also has an insurance scheme wherein 50% of the insurance premium is covered by the government. (15)

Other incentives: TKDK provides farmers engaged in beekeeping activities with up to 100.000 euros of grant support in proportion to their operation costs. (13) Up to 30 thousand liras worth of grant support is provided to beekeepers aged 18 to 41 by the Ministry of Agriculture upon approval. (13)

Regulatory Environment

Regulation on Beekeping determines the principles of fixed and mobile beekeeping, taking necessary precautions regarding bee health and transportation, standardization of tools, machinery and materials, training, project design, development of honey plants agriculture and queen bee breeding. It governs all kinds of production related to beekeeping, breeding and breeding material.

Regulation on Establishing Husbandry Unions and Their Services defines the principles and procedures to establish husbandry unions in Turkey.

Ministry of Agriculture and Forestry’s Directorate of Husbandry: Governs activities on a national scale, City and Provincial Directorates – on a local level.

PRIVATE SECTOR

Companies engaging in beekeping and other related activities such as Fanus, BEEO, Bal Parmak. Ziraat Bank, Şeker Bank, domestic and international banks

GOVERNMENT

The Ministry of Agriculture and Forestry

MULTILATERALS

EBRD

NON-PROFIT

ORKÖY, Agriculture and Rural Development Support Institution, BAL-MER, beekeeping cooperatives such as Türkiye Arı Yetiştiricileri Merkez Birliği