Recent drought has highlighted the weaknesses of the Moroccan agriculture sector, with the government stepping in to help. In the long term, privatization and consolidation of farm holdings will be more important, as emergency subsidies, in securing its future.
Directly and indirectly, agriculture provides the livelihoods for half of Morocco’s population, and has suffered a great deal of late, due to the drought in 2007. Given its importance as an export sector as well, the government is keen to take action. It is already tackling the most immediate issues by increasing subsidies on products such as equipment which reduces water loss in irrigation systems, but broader reform will be needed.
At the Institutional Seminar on Agricultural Development in Rabat on December 12, the Minister of Agriculture and Fisheries Aziz Akhannouch called for a “sustained effort” to increase output and competition. He said that the state would play a key role in improving coordination between investors and agriculturalists.
“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.” Akhannouh also added that the government would initiate programs to promote innovation, financing and access to markets.
Beyond the immediate moves to tackle the water shortages, the government has stepped up its policy of leasing state farms to the private sector. In December it offered 38,700 hectares of farmland previously managed by Société de Développement Agricole (SODEA) for tender. The system has had the desirable results of bringing in capital and management experience through foreign direct investment (FDI). The leasing of 42,800 hectares of land in 2004 brought in $610 million, and new foreign management brought in $3.3 million in 2006. The new farm offerings have attracted interest from France, Egypt, Spain and the United Arab Emirates.
The fractured nature of farmland
Despite this success, the majority of the Moroccan agriculture sector remains fractured and increasingly uncompetitive.
Landholdings in Morocco are very small — 69% of farms are smaller than five hectares, and only 11,000 farms are larger than 50 hectares — due to inheritance traditions that divide family land between offspring.
The fractured nature of the farms limits productivity and means that most farms are too small to make much of a profit. Therefore they struggle to make necessary investments in equipment, vehicles to take food to market and new staff to boost output. Larger, more profitable farms would have the cash to spend on better irrigation systems and to lessen the effects of droughts, like last year’s. Farmers will have better access to the financing, innovation and markets rightly highlighted by Akhannouch.
So Morocco’s attempts to remain competitive and increase exports as it integrates into the global market are hampered. The World Trade Organization and Morocco’s trading partners are likely to apply increasing pressure on Morocco to overhaul the way agriculture is organized.
The understandable cultural and emotional attachment to the family land, and the government’s reluctance to contradict it, has stalled the process of consolidation. But the fact remains that the global market has no such sentiments, and unless reforms can be introduced, small farms are unlikely to grow, and may go out of business.
