The future of local food security heavily relies on the arduous efforts of policymakers and decision-takers to develop a nationwide roadmap and save what is left of the agro-food sector at the macro-, meso-, and micro-levels. It was inevitable that the connected events of the Lebanese pound’s devaluation and US dollar shortage were going to have a detrimental impact on the largely dependent-on-imports sector. Agricultural imports account for more than 80 percent of food supply. The country does not only import food products but also a large proportion of agricultural inputs, like seeds, fertilizers, and pesticides. As a result, the agriculture and the food processing sector (agro-food sector) has been heavily impacted. But as the sector calls for help, the government has been failing to sufficiently respond, with the majority of the country’s remaining public resources being allocated to the industrial and financial sectors, according to a 2021 paper Agricultural Sector Review (ASR) by the Food and Agriculture Organization of the United Nations (FAO).
Since 2019, to contain a growing food security problem and in light of the government’s absence, private sector and international NGOs have stepped up to address farmers’ limited access to financing, poor infrastructure, the internationally-disrupted supply chain, and outdated farming practices. Long standing policy maker inadequacy, alongside the dysfunctional Circular 331 – introduced in 2013 to encourage Lebanese banks to invest in start-ups, incubators, accelerators and venture capital funds – has pushed local incubators and accelerators to design new strategies to scale up and accelerate growth of micro, small and medium-sized enterprises (MSMEs). This also includes start-ups in the idea or early stages, particularly those in the agriculture and the food processing sector.
Half a billion dollars in funding
According to the ASR, a high informal employment rate has always been an obstacle to the growth of the agriculture sector. Only a small share – around 8 percent – of the total agriculture labor force is formally employed, according to a 2019 McKinsey paper. Over the past couple of years, incubators have dedicated a lot of efforts to revive rural and culinary tourism in the countryside and focus on formalizing employment.
One notable ongoing program, funded by the German Federal Ministry for Economic Cooperation and Development, and implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit in partnership with Berytech, is the Rural Entrepreneurs in Agri-Food program which aims to support businesses and startups in the sustainable rural economic development field. According to the Lebanon Agri-Food Initiatives Mapping and Gap Identification report developed by the Lebanon Reforestation Initiative, the current support for the sector reached more than $475 million. This support is channeled through international organizations such as the FAO, United Nations Development Program (UNDP), the World Food Program, the International Labour Organization, or through the World Bank and the European Union (EU). On the other hand, bilateral support to the agriculture sector is also provided by several countries like France, Germany, Italy, Holland, among others.
Berytech: Technical and business support in return for innovative solutions
Berytech designed the Agrytech program in early 2017 to provide financial, technical, and community support to start-ups and small to medium-sized enterprises (SMEs) with engineering and tech solutions across the agro-food value chain. Since then, the program is strengthening linkages among same-sector businesses. In response to the declining economy, in 2020 Berytech launched the Agri-Food and Cleantech (ACT) Smart Innovation Hub which aims to support innovation in the agro-food and energy industry for developing solutions around the increasingly present environmental and food security challenges. Berytech also hopes the program will have a long term impact on the entrepreneurial scene, by proposing policy reforms and establishing a lobbying structure.
Soha Nasser, an agro-food specialist at Berytech and manager of the special edition of the Agrytech Accelerator Program, says that the aim behind the Agrytech program is to help turn the local economy from a service-based economy into a manufacturing-based economy. By organizing outreach activities such as ideathons and hackathons, in partnership with different universities, Berytech helps entrepreneurs from the agro-food sector turn their ideas into viable and investment-ready businesses.
“The applicants for the special edition of the Agrytech Accelerator Program need to have a minimum viable product with a scalability potential beyond the local market and the potential to create sustainable job opportunities in the Lebanese market,” Nasser tells Executive. To grasp the situation of the market and define gaps, Berytech’s research and development department conducts a needs assessment survey.
However, despite that the sector is becoming more appealing to young Lebanese entrepreneurs, Nasser concedes that sometimes they have a hard time finding the right talent, especially due to the emigration of skilled youth since the start of the crisis. Berytech identifies some of the areas facing the most challenges: farming, food-industry packaging and marketing, the rangelands and forestry, fishing and aquaculture, and the area of management support. Berytech encourages applicants under the Agrytech Hackathon and Accelerator Program to consider ideas for these fields as a top priority while conceiving their businesses. The main programs under the agriculture and food sector at Berytech are:
• The Agrytech program;
• Bestmedgrape: an EU-funded project that aims to help businesses turn their wine-making waste into health products;
• Transdairy: an EU-funded project that is enabling technological transfer among research, industry and SMEs applied to the dairy value chain;
• QOOT: an agro-food innovation cluster aiming to internationalize the local agro-food sector;
• The Future Agro Challenge: a global competition for food and agribusiness startups addressing national, regional, and global challenges.
Fair Trade Lebanon: Helping food processors meet local and international sales standards
Fair Trade Lebanon (FTL) is a local NGO created in 2006 with the aim to equip small producers and food processing cooperatives in rural regions with the needed skills to become export ready, through technical training and the acquisition of necessary certification to enter different markets. The local agro-food sector accounted for 11.7 percent of total exports, according to the last reported statistics in 2019, by the Investment Development Authority of Lebanon.
FTL has three projects running consecutively:
• Support business innovation and enhance export for Lebanon (BIEEL): a project targeting local agro-food exporting SMEs to enhance exports by improving access to international markets, equipping businesses with the right certifications to meet international market standards, and providing alternative financing solutions or export-enhancing loans. The main financing institutes are Cedar Oxygen Fund, IM Capital, Crowdfarming, and Al Fanar.
• Shabake: works to strengthen the resilience of Lebanese civil society in order to improve crisis prevention and management programs, funded by the Agence Française de Developpement and implemented by Expertise France and FTL. One part of the project is supporting women’s food processing cooperatives in the Bekaa by providing them with technical and marketing training.
• MedArtSal: an EU-funded project focused on the sustainable management of salt harvesting and artisanal salt production along the Mediterranean, including in Italy, Spain, and Tunisia, as well as Lebanon.
Other accelerators and incubators like Smart ESA, Bloom, and Nucleus Ventures are not providing customized support for agro-food businesses in particular, but are working closely with different partners to tailor support for the increasing number of applicants in all sectors.
Bloom’s Personal and Professional Business Accelerator
“Under the Lebanon Growth Accelerator (LGA) program, Bloom is collaborating with six other accelerators, to support 50 businesses and help create around 250 jobs locally,” Dara-Maria Mouracade, programs lead at Bloom, tells Executive. Among the 50 participants who benefited from Bloom’s support, Mouracade named nine businesses in the agro-food and agricultural inputs sector: Dooda Solutions, Garbaliser, Agro Cedrus, House of Lilies, Compost Baladi – Cultiva, SunCode, Del Libano, Melqart’s Forest, and Aquavita. According to Mouracade, Bloom, in partnership with local and regional accelerators, incubators, and funds provides mentorship programs for entrepreneurs to help them grow on a personal level all while supporting the growth of their businesses. The main challenges facing agriculture that Bloom wants to address under the LGA program are reducing the cost of imports, increasing access to finance, creating innovative ideas to outdated farming practices, and finding solutions to the disruptions in the agricultural value chain caused by the aftermath of Covid-19 and the current Russian-Ukrainian conflict.
Nucleus Venture: Connecting innovators to the world
“Nucleus Ventures (NV) does not have a specific program addressing the food security challenge. In partnership with Steve Wozniak, co-founder of Apple Inc., NV offers boot camps in the EMEA region [Europe, Middle East, Africa] and focuses on talent building for the most in-demand tech careers,” Farah Chamas, Beirut’s NV programs director, tells Executive. The crisis impacted the orientation of the support provided by the accelerator. “Before the crisis, NV adopted a sector-agnostic approach, which means that we were working with various businesses to solve the problems of multiple sectors. The crisis helped us become more sector-focused, we work on providing businesses with grants rather than convertible loans or other financial products and we prioritize working with SMEs in the renewable energy sector.”
In the energy sector, NV helps implement the Energy Innovation Hub program, co-funded by the EU and UNDP. Accelerators from Nucleus Ventures help businesses with growth potential and in securing deals with partners around the globe. Besides focusing on acceleration, NV helps upskill local talents through courses and programs. Under the multiple programs that NV is providing, beneficiaries in the agro-food sector include Bubble Kitchen, Aquavita, CaraBio, Suncode, and Partners with Sun.
Which program to choose?
Choosing the right accelerator program to match your business might leave you flummoxed, but the different outreach activities that accelerators launch online may help entrepreneurs anticipate what to expect. In addition, accelerators are working closely with universities to source talents and help conceptualize ideas at an early stage. ESA’s Business School Accelerator, Smart ESA, customizes solutions for entrepreneurs from all sectors and provides different programs for businesses starting from the seed stage to the expansion stage.
However, despite the growing attractiveness of the agriculture sector among the emerging generation of entrepreneurs and the range of accelerator programs, there is also an issue of mismatch between the offer and the demand; sometimes the offer is not very much aligned with the demand. For instance, apple growers struggle to sell their high-quality fruit every harvesting season and still no concrete solution has been provided, on a governmental level or even from an innovative business approach.
Global and local trends have been driving the need for innovation in the agriculture and food processing sector long before this year’s food security debate kicked off. Without a doubt, at this moment in time, with the increasing number of accelerators, incubators and enthusiastic participants, being a disruptor in the agro-food sector is critical to address the sector’s poor infrastructure, specifically with rising concerns over polluted water, food poisoning, and arbitrary decision making.