chapter  5
18 Pages

Pinar: A Milk Processing Operation in Turkey

WithRuth Karen

The case of Pinar, in Turkey, provides an intriguing and instructive contrast to that of the milk processing enterprise of Hindustan Lever Limited (HLL--Chapter 2) in India. HLL is part of a global corporation; Pinar is a wholly Turkish enterprise. HLL does not compete with public corporations; Pinar is the only private company in an industry that had been a government monopoly, a monopoly characterized by constant losses and public subsidy. Pinar, like HLL, realizes that the agricultural economy in its zones of influence cannot prosper without diversification from a base of small-scale dairying, and both companies have instituted long-range development plans to produce and process other raw materials. Both companies have found it wise and profitable to maintain a carefully crafted system of extension and close personal interaction with their suppliers and the life of their communities, and each has been careful in extending its inter-relationships into the problems of human development that grow out of the economic impact of jobs and increased on-farm income. Although Pinar and HLL arise out of strikingly different corporate environments, the manner in which each has developed a profitable industry based on the responses of very traditional rural people is a classic example of the extraordinary power of agribusiness to accelerate change in similar ways, in totally different cultural contexts.

Pinar was launched by its parent company, Yasar Holding, in 1974. By 1983, the company was working with 21,000 farmers in 296 villages. Pinar has 900 Turkish shareholders; forty percent of equity is held by farmers, large- and small-scale, who took up the standing option held out to all suppliers to buy stock.

Pinar is a profitable, growing business. It has brought singular economic benefits to a large number of rural people and holds out the realistic promise of more to come. Problems remain. The cost of credit for farmers remains a constraint. Except for the relatively small number of marketing cooperatives, farmers remain unorganized and thus weakened in their thrust to self-sufficiency, not only economically but also in a social 78development sense. While the economic base underpinning the farmers who supply Pinar is stronger than ever, their dependency on the policies, actions, and capability of Pinar is, perhaps, a weakness to be addressed by corrective action now. If corrective action is agreed to be necessary, how do the farmers, Pinar, and the government of Turkey join together with mutual responsibility for planning and implementation? This is a question of deep concern to Pinar management.