Home Economics & PolicyAnalysis Lebanon: are the hunger games behind us?

Lebanon: are the hunger games behind us?

Government absence is placing farmers and agro-industrialists in the hands of foreign donors

by Sarah Hourany

Food insecurity is at the forefront of global threats and its prevalence is intensifying. An estimated 54.5 million people are severely food-insecure in the Eastern Mediterranean region as a result of the impact of the Covid-19 pandemic, according to the World Food Programme. In Lebanon, a combination of economic, political, health and social factors are deterring the country’s ability to combat hunger risks. While the financial downturn has had an exorbitant impact on the daily lives of citizens and business, the country’s existing agriculture infrastructure was already calling out for greater attention, with too much dependence on foreign aid, organizations, and United Nations (UN) agencies. The situation has become even more challenging for a country hosting approximately 1.5 million Palestinian and Syrian refugees, adding further pressure to fragile socio-economic conditions. 

The UN’s Food and Agriculture Organization (FAO) points out that food security encompasses four components: availability, meaning the supply of food in an area; access, including the physical and economic ability of people to obtain food; utilization, in the sense of proper consumption of food; and stability, which refers to the sustainability of food production and supply. But where does Lebanon really stand? 

Agriculture: a strategic sector neglected for decades

The great famine of Mount Lebanon between 1915 and 1918 pushed policy makers at that time to add the predominantly agricultural areas of Akkar, the Bekaa Valley, and South Lebanon, over to Mount Lebanon to ensure that the latter is not susceptible to hunger again. 

For agricultural engineer Hanna Mikhael, successive governments from 1992 onwards failed to address agriculture in the same context as other productive sectors, he tells Executive. “With the limited budget allocated for the Ministry of Agriculture, the sector has been adopting a “begging” policy, counting on the non-sustainable financial support of the UN’s Food and Agriculture Organization, World Bank and non-governmental organizations (NGOs) rather than on a long-term national strategy,” Mikhael says, who also co-founded Izraa, a Facebook page providing agricultural and technical advice to 139,000 members.

The losses incurred in 2020 when Lebanon’s grain silos at Beirut’s port were pulverized by a deadly blast, and the outbreak of war in Ukraine, exerted additional pressure on the country’s wheat reserves. Mikhael advocates for the decentralization of grain silos to mitigate such risks. He also requests from municipalities and religious authorities to offer the vast areas of unutilized land that they possess to increase grain production.  

Agricultural economist Souhad Abou Zaki considers that increasing the local production of wheat and pulses is possible; if targeted, well-communicated, and timely subsidies are provided to give financial incentives to farmers to produce them, she tells Executive. While this would improve the local food safety status, it will not by itself ensure food sufficiency. According to Mikhael, the decades-long absence of an efficiently implemented agricultural strategy has exacerbated the sector’s fall amidst the crisis: “Ironically, the Ministry of Agriculture’s NAS [National Agriculture Strategy] for 2020-2025 is a replication of the previous two strategies of which almost no achievements were recorded.” 

First and foremost, the failed energy sector has been severely harming agro-industry. Long before the crisis, the sector suffered from recurrent electricity outages, and this has worsened in the last two years. “In terms of fuel, the global increase in prices combined with the rapid devaluation of the local currency and removal of subsidies led to a sharp surge from $2.64-3 per liter (at a rate of $1,507/LL1,000) in the late 1990s, to around $20-22 per liter at the exchange rate on the parallel market. This sharp increase added additional pressures on farmers and increased the cost of transportation of agricultural and food products,” Abou Zaki says. The irregular supply of energy places the sector at risk, given that power is a key input in all stages of agriculture, from production (equipment, machinery, water pumping), to grading, storage, packaging, transportation, and selling.   

The state of water supply and networks, which are essential for irrigation, are not much better. “The vast majority of small-scale farmers use traditional irrigation systems which leads to inefficiencies and waste,” Abou Zaki says, before adding that water pollution and contamination emanating from inadequate water pipes and sewage draining have significantly affected soil properties and quality. “Not only production losses are probable, but the productivity, quality, and safety of the locally consumed products are at risk,” she says. 

Road facilities play a significant role in the improvement of agricultural production, but with the lack of proper maintenance, costs and losses certainly increase. Abou Zaki considers that the post-harvest infrastructure, practices, and management are weak and way below international standards. For instance, wholesale markets are not organized or monitored, which generates large amounts of food waste. “Adequate agricultural storage facilities are either limited or very costly to rent. A significant number of small-scale farmers and agricultural cooperatives rely on assistance from local or international NGOs to invest in infrastructure (greenhouses, machines walls, irrigation) given their inability to secure funds from their own limited profits, nonetheless this support may not be always sufficient or suitable,” she adds.  

The deteriorating situation of farmers, the sector’s human capital, should not go unnoticed either.  “Feed materials, grains, pesticides, fertilizers, and other agricultural inputs are purchased in US dollars while the farmers are selling in local currency, making them vulnerable to the constant currency fluctuations. To make matters worse, farmers are rarely compensated when their harvests are lost due to bad weather conditions,” Mikhael says. This requires the establishment of emergency funds for farmers and agribusinesses in the event of crop, livestock, or even physical infrastructure losses due to climate change or natural disasters, as per Abou Zaki.  Besides, the rental prices of lands have surged. “Rethinking land-related laws such as ownership, land transfer, inheritance, and registration to resolve conflicts over land ownership and incentivize investment in the land and agricultural infrastructure is a major recommendation,” Abou Zaki says. These worsening conditions will not push farmers out of the sector, as most of them are occupationally immobile. But it will impact agricultural production and negatively affect the country’s food security position, according to Mikhael.  

The industry sector: private initiatives ensure production viability  

With the devaluation of the Lebanese pound, the Ministry of Industry’s budget has become negligible and is barely covering the institution’s operating costs, the advisor to the caretaker Industry Minister, Adib Dib tells Executive. The sector is therefore counting on foreign aid, but this is either getting reduced or suspended due to the political impasse across government. A solar energy project with the United States Agency for International Development (USAID) has not materialized and another industrial cities’ project with the UN Industrial Development Organization has been halted, he says.  Besides, the road conditions have been deteriorating, with Zahle’s industrial city being a striking example of such decaying infrastructure. While the Ministry of Public Works and Transport is responsible for highways, internal roads are the municipalities’ responsibilities. But again, the accumulated revenues of the latter have lost 90 percent of their value, as per Dib. “The ministry is exerting enormous efforts to improve the infrastructure state of Lebanese factories, but it doesn’t possess a magic wand,” Dib says, before elaborating that despite protectionist policies adopted to improve local production, external local and regional conditions are creating challenges. 

Nicolas Abou Faysal, President of the Association of Bekaa Industrialists, shares a more positive outlook for the industrial sector. “The rate of LL1,500 to the dollar era was an illusion and therefore our GDP was overestimated. Today, the incurred costs are real, but our production is real too,” Abou Faysal tells Executive. He expects the balance of trade deficit to gradually shrink over the next five years and says that there are no major food security risks in Lebanon. The sector is currently booming with over 15 new factories built in the last two years in Zahle, providing high-quality products which are replacing imported ones. On the infrastructure level, Abou Faysal explains that the industrialists adapted to the changing conditions by resorting to solar systems to ensure a consistent source of energy and by installing or enhancing their water purification systems. The decaying road conditions, for Abou Faysal, are not new and therefore do not constitute a factor harming production. Yet, the pan-Arab highway project signed in 2003 and not yet finalized could give a boost to local production. 

To minimize corruption, especially on the customs level, Abou Faysal proposes strengthening the roles of economic attaches at Lebanese embassies abroad, by giving them the authority to verify and approve shipments being exported to Lebanon. This will reduce the risk of fraudulent customs declarations and protect local producers. The establishment of a special economic zone in Zahle, conducive to investments, is also vital to increase the number of local food production companies, Abou Faysal says. A similar plan for Tripoli was approved in 2008. The plan was finalized and the funds were secured in 2018, but the government failed to approve its development, as per a statement by Hassan Dennaoui, acting chair and general manager of the Tripoli Special Economic Zone.  

Overall, and across the agricultural and industrial sectors, private initiatives and donors’ support have kept production ongoing. The latest Ease of Doing Business Index issued by the World Bank ranked Lebanon 143rd out of 190 countries, reflecting a rather weak position on many levels, including infrastructure, which can hinder much-needed investments. If no strategies are put in place, Lebanon’s competitiveness will be further weakened, at a time when the global economy’s future is looking mixed to say the least. 

Support our fight for economic liberty &
the freedom of the entrepreneurial mind

Sarah Hourany

An economist, journalist and social entrepreneurship expert.

View all posts by

You may also like