Agriculture is responsible for around 20 percent of GDP (Gross Domestic Product) and 30 percent of export earnings of Morocco; this sector along with fishing and forestry employs as much as 45 percent of the total workforce of this North-African developing nation. The country produces oranges, tomatoes, potatoes, olives, and olive oil and exports premium agricultural produce to Europe.
Morocco – A net importer of agri-products
Morocco is a net importer of agriculture and allied products. It imports substantial quantities of staple food products such as wheat, oils, sugar, and milk.
The country is mostly self-sufficient in food products except for grains, sugar, coffee, and tea. It meets its requirements for agri-commodities such as grains and flour by importing from the United States. As much as 40 percent of the consumption of grains and flour in the country is imported from the USA and France.
Morocco agri-trading – EU, Russia major partners
The European Union is its main trading partner and an important source of foreign currency revenue. Morocco enjoys an advanced status trade agreement with the EU since 2008. In 2017, around 64.6% of exports from Morocco were to the EU and around 56.5% of imports came from the EU. In December 2018, the Morocco-EU agricultural trade deal was adopted by the European Parliamentary Committee on International Trade which is another step in strengthening the strategic relationship between the two countries.
Russia is another strategic partner for Morocco and the two countries are working on boosting exchanges across various sectors that also include agriculture. Products from Morocco are also finding a lot of takers in the Middle East markets.
Challenges to the agri-commodities sector in Morocco
- Saturation of domestic markets
- Limited support to farmers growing staple crops such as cereals and pulses
- Rainfall variability annually has an impact on economic growth
- Prevalence of small farms
- Complicated land title issues
- Increase in land prices
- Capitalization requirements to modernize the agricultural sector
Policy Initiatives of the Government
A plan called the Green Morocco Plan was launched in 2008 to enhance the competitiveness of the agricultural products of the country in the world marketplace. Agricultural exports in the country witnessed a year-on-year increase since the plan was launched.
Till 2013, the agriculture sector was exempted from paying tax. This policy faced a lot of criticism; critics said that many rich farmers and large agricultural companies are taking undue advantage of this policy and the poor farmers were found to be struggling with high costs. In 2014, corrective action was taken as part of the Finance Law, as per the norms of which agricultural companies with a turnover of greater than MAD 5 million would pay progressive corporate income taxes.
The agricultural sector in the country is divided into three major domains. First, there are modern and highly-capitalized farms that produce fruits and vegetables for export. Secondly, there are the reorganized large-scale agricultural units growing predominantly sugar crops, seeds, dairy, and vegetables, mostly for the local markets. The third sector comprises rain-fed agriculture growing grains, olives, pulses, red meat, and dairy products. Many growers continue to use traditional technologies and are still coming to terms with the use of fertilizers, pesticides, and mechanization.
In February 2020, the government of Morocco launched its second strategic plan for the agri-commodities sector called “Generation Green,” with the objective of substantially increasing the overall production of the agricultural sector by 2030, while also promoting human and social development. This plan aims to create a new agricultural middle class by supporting young entrepreneurs by mobilizing one million hectares of collective lands and creating 350,000 jobs focused on high-value agriculture.
Changing Trends in agricultural commodities trading
In addition to the increase in production, the performance of agricultural exports from Morocco is being defined by international trade agreements, transport costs, and logistics costs. It is imperative that the country adapts to changing consumer trends in the regions to which it exports its agricultural products. For instance, there is an increase in organic produce; the agricultural commodities sector in the country can adapt to this specific demand trend and make its foray into new markets.
The way ahead
The young farmers in the country today are engaging in innovative learning processes to garner higher crops and livestock yields. The idea is to produce higher quantities using sustainable farming methods while also building on the capacities of the human resources of the nation.