Barriers to agricultural exports in a Lebanese context

This thread was written by Souhad A. Zaki (@souhad_16) on March 18, 2020.

Compared to its surrounding, Lebanon has the highest percentage of agricultural land (see figure 1) and its climate is relatively moderate. These competitive advantages are not translating into increasing agricultural productivity & exports. Why?

Fig 1: Percentage of land suitable for agriculture per country. Investment Development Authority in Lebanon (IDAL)

Needless to say, since 1992, the successive governments have been neglecting the sector. On average, the budget allocation to the MOA is about 0.5% of the total public expenditures. But this is not everything!

Our ability to produce good and nutritious products that can be marketed at reasonable prices has been restricted by several factors.

a) Our products fail to conform with the international standards & norms due to excessive use of pesticides, fertilizers & other chemicals.

Till now, we have no comprehensive law for food safety. Instead, we have a collection of incoherent decrees, decisions & laws to regulate the use of different production inputs such as fertilizers, seeds, pesticides which are not enforced.

In 2018, the minister of Agriculture drafted a law with the help of field experts to ensure safety in apple production & make farmers test their products in specialized labs under “الوثيقة الوطنية للممارسات السليمة في مكافحة الآفات وتتبع منتج التفاح”.

A good Law which could have been generalized to cover other agricultural products. Yet for political reasons, the law was passed but made optional (non-binding). It was left to farmers to decide whether to test their product & remained restricted to apples.

b) Forget about apples!
Now assume a farmer manages to ship the products to a foreign country & cover all logistics costs. If the products turn out not comply with the country’s norms, they won’t be returned to the farmer but instead, they’ll be disposed! (i.e PURE LOSS)

c) Costs of production remain high, mainly due to the presence of monopoly controls of traders over key inputs (friends of warlords of course) who in many cases promote the use of pesticides, fertilizers & other products to reap profits even when they are not needed.

d) This monopoly control, coupled with limited knowledge of good farming and management practices, especially among small-scale traditional farmers, and the lack of investments in innovative agricultural techniques, leads to higher prices & loss of competitiveness.

e) Small & medium scale farmers are still unable to form independent companies to promote their products and access larger local & foreign markets. Even though we have a high number of agricultural coops, which are supposed to provide marketing support to farmers.

Only 4.5 % of registered farmers are members of coops. This is partly because of the lack of attractiveness of existing cooperatives, as well as the fact that many cooperatives do not respect the open membership

ILO, 2018

This leaves them under the mercy of traders & middlemen who capture most of the profits while leaving farmers with less than 20% profits.

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