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Adding value to traditional sector – Morocco farms on! – J. AbiNader

Jean R. AbiNader, Exec. Dir., Moroccan American Trade & Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade & Investment Center

MATIC, by Jean R. AbiNader (Washington, DC, April 5, 2013) —Quite often, when observers look at economic development in emerging markets, the emphasis is on expanding IT-related projects, renewable energies, and other sectors that are not at the whim of climatic factors. Yet in countries such as Morocco, where there is sufficient rain to support a robust agricultural sector, there is much to be said for making food commodities and value-added food products a priority. Agriculture absorbs upwards of 40 percent of the workforce, contributing 14-20 percent of GDP in a good year. The country has invested heavily in water-management projects (dams and reservoirs) to try to control its resources more efficiently.

In 2008, Morocco launched its Plan Maroc Vert, to encourage investments in and best practices by both large and small farms.

As noted in Plan Maroc Vert’s website, agriculture:

  • Contributes 19 percent of the GNP, 15 percent from crops and 4 percent from agro-industry
  • Employs more than 4 million rural inhabitants, including 100,000 jobs in agro-industry
  • Provides revenues for 80 percent of Morocco’s 14 million rural dwellers
  • Provides food security for the more than 32 million Moroccan people.

Given the vital importance of this sector, it is not surprising that Morocco has made agriculture a core component of its economic growth strategy. In addition to Plan Maroc Vert, the National Human Development Initiative (INDH) includes marginalized urban and rural areas under its broad umbrella targeting communities for development programs. And the international community has responded favorably to these programs.

Through the 2007 Millennium Challenge Compact with Morocco, the largest awarded by the US at the time, $328.7 million was allocated to “stimulate growth in the agricultural sector and reduce volatility of agricultural production including funds to:

  • Rehabilitate existing olive trees and expand production of olives and almond trees;
  • Move small farms from high water-use, low-value cereal grains to low water-use, high-value and drought resistant commercial fruit tree species; and
  • Support improvements to increase irrigation efficiency and productivity of olive and date trees.”

Similar support is being provided by the World Bank in the form of last month’s $203 million Development Policy Loan, the second in a series designed to support “key reforms envisaged in the national Plan to strengthen domestic markets, help small farmers, enhance agricultural services, and improve the delivery of irrigation water.”

This is in addition to two grants already awarded from the World Bank’s Global Environment Facility. The first—$4.35 million—from the Special Climate Change Fund, is for integrating climate change adaptation measures to build resilience to climate shocks. The second—$6.4 million—will help small farmers implement land and biodiversity conservation measures in marginal areas so that agricultural intensification can be compatible with environmental preservation. And just this week, President Francois Hollande of France announced a grant of $26 million to support the second plank of the Plan Maroc Vert, which emphasizes achieving economies of scale by aggregating small farms into more competitive and efficient units for production, processing, and distribution. More details of this ambitious and essential plan are available at www.ada.gov.ma.

I am writing about agriculture in Morocco to create more awareness of how farming is critical for creating jobs that Moroccans need, and not just to keep farm families engaged.

Morocco is the world’s largest exporter of phosphates, critical to the global food industry. It sits at the northwest corner of the Sahara, a key corridor for distribution of foodstuffs throughout west and central Africa. Its least developed areas are rural communities with poorly utilized agricultural and grazing land due to traditional inheritance practices and lack of recording and registration of land titles. It is not surprising that these areas have the highest rates of illiteracy, poorest health statistics, and the least developed infrastructure. Morocco is using an arsenal of programs and projects to turn this around, but the core necessity is to make the agricultural sector more productive, profitable, and market efficient—moving from commodities to value-added products.

There are a wide range of applications of ITC technology that will benefit a more rational agro-industry, from water conservation and irrigation techniques to better use of seeds, fertilizers, and crop rotation. And this hasn’t even begun to mine the real opportunities in producing downstream value-added food stuffs that will move seasonal workers into more permanent employment. The chart below indicates that Morocco is doing well exporting basic food commodities. It is reasonable to assume that its farmers will achieve much higher profit margins if they move further up the value chain towards higher-value products.

The US should continue to support the growth, diversification, and maturation of the agro-industry in Morocco through stepped up efforts to increase participation of the US private sector. Creating more jobs, developing more profitable products, streamlining farm to table distribution, and global marketing are obvious business opportunities for US companies that have generations of experience in building a vibrant agricultural sector. The timing is on target for both countries to realize greater benefits in strengthening ties in this sector.

Jean R. AbiNader is Executive Director of the Moroccan American Trade and Investment Center

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