Lebanon’s Investment Development Authority, IDAL, figures twofold in the task of promoting the national agriculture and agro-industry sectors. Under the 2001 investment law 360, the agency offers incentives to investments into strategic sectors of the economy, including agriculture and agro-industry. For the past three years, the IDAL mandate also extended to supporting agricultural exports through the Export Plus program offering farmers transportation subsidies and quality certification for produce. In February 2004, IDAL and the nation’s agro-industrialists signed a collaboration for an Agro Market Access Program (Agromap). EXECUTIVE talked to IDAL chairman and managing director, Samih Barbir, about the agency’s achievements and plans in relation to the agro sector.
Where does IDAL set its priorities in supporting agriculture and agro-industry?
In Lebanon, we don’t have large volumes in agricultural production. Therefore, our main priority is quality. The successful experience of Export Plus of having two international firms implementing quality control has proven to be a very important factor in marketing Lebanese agricultural products abroad.
When you discuss Export Plus as a success story, where are the highlights, and what are the areas still in need for development?
The level of success is simply the fact that we witnessed an increase in our exports. In the first year, it was a big increase of 15%, in the second year, 5%, and last year, it was stabilizing. But one has to look at it in a different way. Before the launch of Export Plus, we were on a downward slope. Exports were dropping and the whole sector was suffering a lot, due to many problems. Maintaining a stable level of approximately 360,000 tons in exports per year is a success in itself. We experienced some additional difficulties, such as some bad weather hitting Lebanon over the last two years, the devaluation of the currency in Turkey and the war in Iraq, all of which affected our export markets.
In your statistics, 99% of agricultural exports went to GCC countries, plus Syria and Jordan. What can IDAL do to improve agro exports across other markets?
The GCC are the natural market. The Iraqi market is a new one that we are trying to enter right now. But our main objective is to enter European markets. We are doing a lot of contact work with all the embassies here, especially Eastern European ones. As a first target, we are trying to enter those countries that have the least obstacles.
Your 2003 report states that about 5% of agricultural products destined for exports to Arab countries were rejected in quality inspections. Would the same quality requirements apply to produce destined for Europe?
Exports to Europe would have to meet higher and different quality requirements. They have some very strict controls on pesticide residues and other issues that are not required by Arab countries. That is why we have to inform those farmers prior to starting to control their products.
On the other side of the coin, IDAL has the mission to draw in investments. How is this progressing as far as attracting agricultural investors?
We offer the same incentives to projects in all the sectors listed in the [Investment Development] law, as are tourism, ICT, agro-industry, industry in general and agriculture. The only difference is that agricultural projects have the lowest minimum investment requirements to qualify for incentives.
How have agricultural and agro-industry projects fared in terms of attracting investors?
We have two agro-industry projects that are being processed under the one-stop-shop service. The law is still relatively new and the incentives are new. It takes some time to let people know about it. We are planning to do a campaign by the middle of this year, to promote those incentives. But definitely, compared to tourism, it is still very shy.
Can you name an amount for the value of one of those two projects, to give an idea of the magnitude?
The project that has progressed further is for $4.3 million. Don’t expect to get big figures in this industry.
How much funding for agricultural export promotion do you have at your disposal?
The Export Plus program was approved for LL100 billion spread over the four years, 2001 to 2004.
How much have you dispersed to date?
A bit less than LL30 billion each year. We can handle the program until the end of this year. We might need some more [funding] but there is no problem in that. Theoretically, it should be covered.
Under the new Agromap project, you are sponsoring participation of Lebanese exhibitors in trade shows in Beirut, Paris, and New York. How does this interlace with the promotion of agricultural exports under Export Plus, where you described the strongest markets and prospects as being in the Gulf and Eastern Europe?
With Agromap, we are targeting a different sector, agro-industry, and are promoting Lebanese agro-industry products. We are doing this as a pilot project in 2004 and I wanted to reach the Arab, European and North American markets, to see what the impact would be. We will evaluate each event right afterwards and depending on those three events, we could consider going into another round with a bigger budget in 2005.
Did you allocate equally to each fair, Horeca in Beirut, the Fancy Food Show in New York, and Sial in Paris?
Between the US and France, there will be equal space. Lebanon will be bigger. Here, much more people will come because they do not have the transportation issue. Horeca also accounts for biggest amount in the budget.
How was the response from the industry?
The first results are very good. For Horeca, we have about 35 industrialists and for the Fancy Food Show about 15. We are over-subscribed but I wouldn’t call that a problem. We will have the luxury to choose the best products to represent Lebanon abroad.
What will you provide to the companies that qualify for participation?
We will have a Lebanese pavilion, and we will cover 100% of the rent and the stand decorations. Exhibitors will have to cover their transportation and other costs.