Oxford Business Group | 12 January 2008
Speaking at the opening of the 6th Annual Institutional Seminar on Agricultural Development in Rabat on December 12, Akhannouch emphasised the need for action. "The challenges to productivity and competition in agriculture in Morocco can be addressed only through a voluntary approach and sustained effort," he said.
According to the minister, the state must take a mediator's role between the sector and investors to speed up change. "Given the realities of the sector, the current situation of farmers calls for a redefinition of the state's role in the form of new relationships between the producers and industry players," he said, adding that the state must orchestrate programmes that facilitate innovation, financing and access to markets.
Such active state support of the agriculture sector is of little surprise given the lack of rainfall in 2007. Directly or indirectly responsible for the livelihoods of roughly half of the country's population, agriculture represents a souce of both concern and potential for the Moroccan economy.
The agriculture sector's most immediate need concerns the country's significant dry spell. The government has already begun to address this particular issue by organising an array of subsidies including the purchase of equipment to reduce water loss in irrigation systems.
In addition to addressing water-related issues, the ministry's new strategy must also address another major hurdle. Inheritance practices in rural Morocco dictate that land is transferred to successive generations and split into equal shares. This traditional practice has been responsible for the decreasing size of the average plot of farmed land. According to government statistics, roughly 69% of Moroccan farms consist of plots of less than 5 ha. Only 11,000 farms currently operate on lands in excess of 50 ha.
While small and medium-sized farming operations limit productivity levels, subsidies do not provide a viable solution in the long-term. As Morocco gradually integrates into the global market, its farmers will further fall behind more efficient and modernised foreign competitors, unless reforms are implemented. Moreover, World Trade Organisation and free trade agreement guidelines will apply greater pressure if the country fails to overhaul the sector.
To begin the restructuring process, the Moroccan government has pursued a strategy of leasing state-farms previously under the management of Société de Développement Agricole (SODEA). The tender procedure for leasing government lands has thus far been successful in attracting new sources of foreign direct investment (FDI) and skilled management to the sector. In 2004, 41,837 ha of agricultural leases were issued, generating Dh4.7bn ($610m) in revenue for the state coffers. According to government statistics, foreign holders of these leases injected Dh25.3m ($3.28m) into the sector in 2006.
A similar tender involving an additional 38,731 ha of state farmland was concluded in early December. While the final awarding of the leases will not be announced until early 2008, it has been acknowledged that a large number of bids were made by agricultural businesses from France, Egypt, Spain and the United Arab Emirates.Despite the success of the state-land lease programme, the government's new agriculture strategy must address the critical issue of agricultural land segmentation and the lack of economic cooperation among the country's 850,000 small-plot farmers, who currently represent the backbone of the sector. Implementing further reforms regarding these issues will enable economies of scale and attract greater interest from foreign investors.