Meat Trade News Daily | 24 Nov 2009
Morocco has the resources to press ahead with farm sector reform, even if many foreign investors are unwilling to commit for now, industry officials said.
Foreign investment in the north African country had fallen by a third in September compared to a year earlier, according to government figures, as the global banking crisis made investors loath to venture into new markets,
Morocco has said it needs to muster 150 billion dirhams to upgrade and diversify agriculture, which suffers from droughts and poor yields.
A 10-year farm reform drive seeks to replace cereals, which account for 75 percent of Morocco's arable land of 7.5 million hectares, with more lucrative crops such as olives and boost food exports as trade barriers fall.
Gulf Arab investors should be ideal partners for the plan as their countries need to secure food supplies after prices rose sharply.
Yet big inward investment deals have been largely absent.
At a two-day conference near the Moroccan capital Rabat, local officials sought to convince Gulf investors that heavy bureaucracy and complex land ownership rules, long seen as decisive obstacles, are a thing of the past.
The charm offensive has worked in some cases -- Saudi Arabia's Tabuk Agriculture Development Co. said it planned to invest about $10 million in Moroccan olive farming early next year. It started looking at opportunities in Morocco in 2008.
And an Abu Dhabi-based private sector investment firm told Reuters this week it had signed a contract to lease up to 700,000 hectares of farmland in southern Morocco and would invest 30 million euros.
Commitments so far are relatively small but Moroccan industry officials are staying upbeat, saying foreign investment is very welcome but not essential for its farm reform plan to succeed.
"There is already a commitment from (Moroccan) state and financial institutions," Tarik Berkia, a managing director at Moroccan bank Credit Agricole, told Reuters.
"The money is there. If there are big scale projects, we could call upon foreign funds. That does not mean foreign money is not welcome."
He said there was keen interest in farm projects from French, Australian, Spanish and Italian investors.
Some Gulf investors at the conference said they were starting to sit up and take notice of Morocco's farm sector.
"All the world is worried about food security and Gulf countries are investing in Sudan and Western Asia," said Ali Hamid al-Missifri, first executive manager at Qatar International Islamic Bank. "I think there's now an opportunity to go to Morocco -- it's a very important agricultural country."
Other delegates said they were still put off by Moroccan red tape and the relatively small size of farm units generally on offer."I'm not coming here to invest in small land," said Saad al Swat, chief executive of Tabuk Agriculture Development Co. "We're not talking about 500 or 700 hectares. Our farm in Saudi is 35,000 hectares... With a small farm, nobody is going to notice your input in the economy."