This paper examines the Turkish hazelnut industry in the Black Sea region in Turkey and identifies the key issues that challenge both the region and industry. Unsustainable government policies such as price subsidies and absorption of overproduction to maintain the subsidized prices have led to years of market price instability. This paper investigates the relationship between factors such as: the average farm size per farming unit, the number of occupations per farmer, the cost of production and productivity. Relatively low productivity, as a result of the declining average farm size in the region, has negative effects on the profitability of hazelnut farming in Turkey. This paper also discusses the major underlying causes of the decline in average farm size (i.e. inheritance, estate laws) and, in the final section, examines a number of the measures and policies that could help to solve these problems and aid economic development throughout Turkey.