Along with other ministries, the Ministry of Economy and Trade (MoET) constitutes the administrative framework of enabling institutions for food security in Lebanon. To understand the MoET’s recent initiatives in promotion of agro-food exports, the ministry’s strategic approach to food security, and its ongoing activities relating to agro-industrial enterprises and entrepreneurs, Executive sat down with Mohamed Abou Haidar, the general director of Economy & Trade at the MoET.
E The 2022 edition of a leading European trade show, the SIAL International food exhibition held in Paris in October, included Lebanese participation. Is it correct that you have participated and have been promoting Lebanese agro-food sector exports at this trade show?
E What is the Ministry of Economy and Trade doing to promote agricultural and agro-industrial exports in this ongoing phase of the Lebanese recovery process?
Besides SIAL, we have also participated in Expo Dubai for six months, and I need to recognize the efforts of the Dubai government who provided the pavilion to us. There were more than 900,000 visitors to the Lebanese pavilion. Among other sectors, such as IT startups, Expo Dubai was a hub for the Lebanese agro-food, especially noting that the Lebanese cuisine is very famous in the GCC countries. At SIAL Paris, Lebanese industrialists [were organizing a Lebanese pavilion] in collaboration with NGOs such as René Moawad Foundation and [Business Innovation and Enhance Export for Lebanon program] Bieel Fairtrade. Also in collaboration with the Ministry of Agriculture, and the Ministry of Industry, and the Ministry of Economy and Trade, we provided this pavilion to the Lebanese [food industries] in order to enhance exports to the EU. We did this since we can assure that those [agro-industrial products from Lebanon] are now up to standards of quality, [such as] the standards of the Codex Alimentarius (international food standards of the FAO/WHO, ed.) and the Libnor standards. These products of good quality were [at SIAL] and we [organized business to business] meetings for importers and exporters. This is because Lebanese importers can find a different diversity of products, and we believe that competition corrects the price. It is a good opportunity for [importers] to get a diversity of products in very good quality and very good price in order [for import products] to be available to the consumers in Lebanon. So we have two situations, [one] to enhance exports and get fresh dollars into Lebanon, and at the same time [the opportunity] to enhance diversity for Lebanese consumers.
E After the initial collapse of the Lebanese economy over two years ago, the hot topic debated in relation to food imports was substitution of imports by local foodstuffs. Importing opportunities had been getting scarcer because of the implosion of the Lebanese purchasing power and sudden payment obstacles. But when one exports for example potatoes, the consumers in the country will not be able to eat them. From your perspective, how should we evaluate this relation of imports, exports, and substitution?
As you know, 86 percent of our food is imported. At the same time, after the crisis, due to the [depreciation] of the Lebanese currency and the decreasing of the purchasing power, most of the [agro-industrialists] in Lebanon are trying to export, in order to recompense for what they may be [supplying at a loss] in our country. They are trying to recompense [their heightened local costs], especially if we take into consideration the high cost of fuel. The direct cost on food is now between 12 and 14 percent – and this is unbelievable.
E So out of each 100,000 lira that consumers have to pay in the supermarket, there are 14,000 lira that go to transport and fuel?
That’s it. Thus the industrialists try to export in order to get the fresh money, in order to import raw materials, and at the same time in order to [retain] the families [and] workers who are still working in their factories and industries. As we know, some of them have left Lebanon.
E In talking about ratios of agro-food exports in relation to imports and the promotion of Lebanese exports, were there actually any exporting contracts that were signed between the Lebanese and foreign importers at the SIAL or EXPO time?
This is a private sector [issue]. We did the B2B meetings for both of them and we left them to do their own business. Our targets are to enhance exports and to promote our products. At the end, the Chambers of Commerce, Association of Lebanese Industrialists, and some syndicates have their own business [dealings] and we do not interfere in these since they are private sector [activities], but provide the hub for them.
E Executive has been told that the Ministry of Economy and Trade has requested a multi-year strategy for food security to be developed for Lebanon with the support of the FAO and EBRD, the European Bank for Reconstruction and Development. What would the focus points of such a food security strategy be for the MoET?
As you know, after the August 4 blast [in 2020], there are today no silos in Lebanon. This means there is no strategic [storage] of wheat. The Minister of Economy and Trade, Amin Salam, got in touch with the World Bank and we got the approval for $150 million as a loan within the food security support framework that you mentioned. This is in order to provide wheat at the proper prices to the Lebanese citizens, knowing the Central Bank will no longer be able to subsidize this import. And it seems that during the upcoming days, we will start this program. This is in regard to a major part of food security strategy, especially since the start of the war between Russia and Ukraine. As you know, 80 percent of Lebanese wheat was imported from Ukraine and the rest from Russia. Also the crude [edible] oil also came from Ukraine and Russia. Packaged [edible] oil [was sourced] to 34 percent from Turkey; [however], Turkey was importing the crude oil from Ukraine. Although some of the peak prices of commodity food have since moderated, the cost of the [shipping in] vessels has increased and the cost of insurance has increased, so that we were facing a food security problem, worldwide and at the same time locally. But I have to highlight that some industrialists during the crisis had opportunities to start creating new products of high quality that will be available to our population. Regardless of the crisis, I think the agro-food sector and industrialists were in a good and safe situation.
E Food security indeed seems to be the topic of the year all around the world. What is the strategy that will address food security in Lebanon beyond the Ukraine crisis and the problems over the availability of wheat?
The Syndicate of Food Importers and the Association of Industrialists are finding alternatives. For example, during the first weeks and months of the crisis, they went to Croatia, Moldova, Romania, in order to get substitutes. They find solutions. We did not miss out on anything, but it was a matter of price. As you know, in Lebanon, the private sector is importing, not the government.
E Is it correct that at the Ministry of Economy and Trade you neither have a budget for import subsidization or for such things as paying for pavilions at international food fairs?
We were trying to promote exports at EXPO and I have to again thank the Dubai government for their support. At SIAL, the private sector and Fairtrade were supporting us. This is a success story for the [partnership] between the public sector and the private sector. This is what is most important for all of us. And we have to benefit also from the triple P law that was implemented in our Parliament. We need the public-private partnerships and this is a success story that the public and the private sector can do very good [things] if they work together.
E But was the PPP law from its inception, and also the applications that had been discussed at the CEDRE conference and in other partnership plans before the crisis, not mostly related to infrastructure and transport?
Yes, I know but [my point here] is about the concept of jumelage, and affiliation between the public and the private sector.
E Is there any specific design for PPPs in, let’s say the construction of silos at Beirut or Tripoli port? I know that EBRD did the per-feasibility study for silos at Tripoli port.
I need to tell you that we have two directorates in our ministry, the directorate of economy and trade and the directorate of grains and wheat. This is under the patronage of the other directorate. Frankly speaking, [I have] no idea.
E I have heard that there was a roundtable on food waste in the hospitality sector at the end of September, organized by the Lebanese American University, in which you participated.
Yes, [this event] was very good.
E Taking a look at the study on food wastage in the hospitality establishments that the roundtable was basing its discussion on showed me that the study’s data were collected by LAU researchers prior to the economic crisis.
LAU and AUB, and I announced during the roundtable a new competition for students for developing a proper awareness campaign, a video campaign, for raising awareness among citizens to reduce the waste of food, especially as they mentioned [in the study] that 35 percent of our food was lost.
E My question is actually about changes in food waste ratios since the crisis, and how the shocks on affordability of restaurant meals and access to food in general might have already been impacting behaviors. Given that the underlying data of the study were collected in 2018 and early 2019, wouldn’t it be very interesting for public and private stakeholders to gain insights into trends in this area that have emerged since the crisis?
I totally agree. I recommend that you keep in touch with the center of studies at LAU, Dr. Hussain Hassan, and with Dr. Mohammed Abiad at AUB.
E But you at the MoET don’t have newer data on this issue?
Frankly speaking, no.
E With regard to the collaboration between the Ministry of Industry, the Ministry of Agriculture, and the Ministry of Economy and Trade, also noting that you mentioned the two directorates that are working at the MOET, and knowing that there are other departments such as the commission for regulation insurance that would have a role to play in securing our food sustainability at the country level, is there a standing committee in charge of collaboration, or an established procedure for the coordination between all these public institutions?
I am in good collaboration between the Ministry of Economy and the Ministry of Industry, especially on the level of the [Director Generals] and with the Ministry of Agriculture, and with all public sector [institutions], and also especially with the Chamber of Commerce when there is any issue regarding food security. We have also to take into consideration that the minister [Salam] is the head of the governmental subcommittee on food security. So he will usually give me the updates and instructions on things that need to be done. At the same time, I am working with my colleagues, the DGs, on this matter and find solutions whenever there is a need.
E For how many years have you served in the role of DG?
E And before that, you were overseeing the consumer protection unit at the MoET?
[Consumer] Protection and Quality. I was for five years working with UNDP in the Ministry of Economy and Trade.
E So from your experience, how is the Consumer Protection Unit able to function today when it comes to price supervision and quality of food that is for sale in the Lebanese markets? Some people tell me that they buy food as cheaply as possible but don’t always know where it comes from and have had quality issues.
First of all, the Consumer Protection Directorate is working with not more than 60 inspectors, while we have 22,000 mini-shops, 180 supermarkets, and 160 bakeries [to supervise] and [outside of the food retail market] over 4,000 private [electricity] generators and 3,000 gas stations. With regard to food security, everything that is imported could not be in the market unless we get the proper laboratory test [results]. If it is up to standards, it will be in the market. Before imported food is in the market, it should be cleared, and this is what is happening.
E Can you exclude that gray imports would come in across the land borders, such as smuggling of poultry or tomato products?
We are checking everything. Everything is checked either under the umbrella of the Ministry of Agriculture, Ministry of Public Health, research labs, or the Ministry of Economy and Trade. Regarding the internal products, the Ministry of Industry is doing a good job with the industrial [establishments] in order to organize and supervise their activities. At the same time, the Ministry of Agriculture, also in collaboration with us, is trying to compensate for the lack in our staff. We also addressed a letter to the syndicate of supermarkets in Lebanon and told them not to accept any new Lebanese product that is published for the first time, before informing us and getting the results of the lab tests. Also the Ministry of Industry informed them that they have to obtain the certificate that the company is registered at the Ministry of Industry, in order to avoid those fraud industries.
E I had the opportunity of interviewing the then-Minister of Economy and Trade shortly after the Lebanon Economic Vision, or McKinsey plan, was released a few short years ago. In the context of providing the Lebanese producers with guidance on export opportunities and promoting agro-food products abroad, is the McKinsey plan of help to you today?
What happened before 2019, is not 100 percent applicable now. But in the end, in the McKinsey [plan], there is a solid infrastructure regarding high-tech, agro-food, industry; everything was put. For sure, this is very good. We have to take it into consideration and perhaps have to do some fine-tuning about this part. There are also new studies published with the minister in collaboration with ESCWA. I think all those studies need one keyword: execution. They have to be executed.
E In the international arena, there have been some controversies about the concept of food sovereignty, meaning the need and ability of countries to develop their own local foods and small indigenous agro cultures, versus the issue of food security, which is sometimes associated with corporate control of agribusiness, genetically modified organisms, and dominant roles of multinational groups. What is your personal view on such controversies? Do you prefer for Lebanon to be champion in food sovereignty or a success in food security?
We need both of them. Since [the country] is trying to move from a rentier business model to a productive business model, I think you first need to secure the security of your population. At the same time, since our raw materials are imported and we are historically importing everything, we need to be exporting, so I think we need both.