MEDFROL PROJET Market and Trade Policies for Mediterranean Agriculture: The case of fruit/vegetable and olive oil SIXTH FRAMEWORK PROGRAMME PRIORITY 8.1 Policy-oriented research Integrating and Strengthening the European Research Area Call identifier: FP6-2002-SSP-1 AGRICULTURE SITUATION REPORT FOR MOROCCO February 2005 By Es Said Azzouzi Head of project evaluation division Direction of planification and Economic affairs Ministry of Agriculture, Rural Development, and Fishery e-mail : azzouzi@dpae.madrpm.gov.ma Ali ABIDAR PhD,National school of Agriculture Meknès,Morocco Tel: (212) 55 30 02 39 / 40 / 41 Fax: (212) 55 30 02 37 / 38 e-mail: aabidar@enameknes.ac.ma Research conducted under the European sixth framework program (Priority 8.1) Integrating and Strengthening the European Research Area. Views expressed in this paper are those of the authors and do not necessarily reflect those of the institutions of affiliation, the Medfrol project or the EU. Any errors in the present report are the responsibility of the authors. 1
Contents 1. Introduction... 5 2. Natural conditions and land use... 6 2.1- Land resource potential and constraints.... 6 2.2- Water resource constraints:... 7 2.3- Land and water use:... 8 3. Performance of the agricultural sector... 9 3.1. Introduction... 9 3.2 Products:... 9 3.3- Intermediate inputs... 13 3.4- Machinery and equipment... 14 3.5- Water use... 14 3.6- Labour force and employment in agriculture... 15 3.7- Sources of income in rural areas... 16 4. Upstream and Downstream Sectors... 16 4.1- Upstream sectors... 16 4.2. Food processing sectors... 16 5. Food consumption... 17 Self-sufficiency ratios... 18 6. Trade in Agro-food products... 18 6.1. Structure of trade in agro-food products... 18 7. International competitiveness of Moroccan fruits, vegetables and olive oil... 22 8. Concluding remarks... 24 References... 26 2
List of tables Table 1: Water resources... 29 Table 2: Land use (in 1000 Ha)... 29 Table 3: Cereals production and acreage in 1000 Ha... 30 Table 4: Fruit plantation acreage in Ha... 31 Table 5: Fruit plantation production in tons... 32 Table 6: Early vegetables production in tons... 33 Table 7: Vegetables production (in tons)... 34 Table 8: Self sufficiency ratio for red meat... 35 Table 9: Poultry production (tons)... 36 Table 10: Milk Production (million litres)... 37 Table 11: Moroccan Agro-food industry... 38 Table 12: Milk and butter self-sufficiency ratios... 39 Table 13: Self sufficiency ratio and per capita consumption for sugar... 40 Table 14: Production, imports and self sufficiency ratio for cereals... 41 Table 15: Production, imports and self sufficiency ratio for edible oils... 42 Table 16: Moroccan commercial Balance by group of products (2002)... 43 Table 17: Agri-food exports (2002)... 44 Table 18: Moroccan agricultural exports... 45 Table 19: Moroccan imports of agricultural products... 47 Table 20: Domestic resource cost for citrus, tomatoes and olives.... 49 List of figures Figure 1- Trend of annual rainfall 8 Figure 2- Livestock production index 12 3
List of abbreviations GDP Gross Domestic Product DH Dirham BCM billion cubic meters LSI Large Scale Irrigation EU European Union SMSI Small and Medium Scale Irrigation NPK Nitrogen, phosphate, Potassium, FAO Food and Agriculture Organization of the United Nations MM 3 million meter cubic ITC International Trade Center USA United State of America RUV Relative unit value DRC Domestic resource cost 4
1. Introduction Agriculture is a key sector of the Moroccan economy, playing crucial social and economic roles. From 1998 to 2002, agriculture s contribution to Gross Domestic Product (GDP) varied between 14% and 17%, which places it second behind commerce and equal to the industrial sector. Agriculture employs 40% of the nation s labour force and 80% of the rural labour force. The country s food security goals are furthered with self-sufficiency ratios reaching as high as 100% for fruits and vegetables, 98% for meat, 87% for milk, 72% for cereals, 52% for sugar and 25% for edible oils. On average over the last five years, agricultural exports accounted for 12% of the nation s total exports. Morocco s economic growth is highly correlated with that of agriculture, which highlights the importance of this sector to the country s economy. In 2002, GDP grew at a rate of 3.2% with agricultural production growing at a rate of 5.6% while non-agricultural GDP grew by only 2.8%. While the upstream and downstream linkages between agriculture and the rest of economy account for some of this correlation, the bulk of it is due to fact that the incomes in rural areas are primarily derived from agriculture. Value-added crop production for the last six years was estimated to be 20.6 billion Dirham (DH), on average annually, representing 68% of the total value added in the agricultural sector. The total varied from 13 billion DH in 2000 to 34 billion DH in 1996, depending on climatic conditions. The fruits and vegetables sector occupies more than 700,000 Ha, of which almost 240,000 Ha is in vegetable production, and 460,000 Ha is in fruit production, excluding olives (see Table 1). The average, annual production amounts to about 7 millions tons with 3 millions tons of fruits and more than 4 millions tons of vegetables, representing 28% of the nation s total crop production. Annually, it generates 90 million workdays with packaging and processing activities providing an additional 30 million workdays, which is more than 22% of the employment generated by all agricultural activities. Annual exports of fruits and vegetables amounted to 9 billion DH on average over the period 2000-2002, which represented 11% of total Moroccan exports. In terms of acreage, olives with 560,000 Ha are the single most important fruit species produced in Morocco. This industry generates 11 million workdays annually, which is equivalent to 55,000 permanent jobs. On average, 550,000 tons of olives were produced annually over the last five years. Of this, 65%, 160,000 traditional units or 260 industrial units, were processed and 25%, or 50 units, became canned olives. Olive oil production represented, on average, 81% of annual domestic edible oil production during the last five years, and supplied 12% of the domestic demand for edible oils during the same period. The livestock production sector also plays an important role in Morocco. Two out of three farms among the 1 million in the nation are involved in livestock production with 18% of the rural population depending exclusively on livestock as a source of income. This industry contributes, on average, 10 billion DH each year to the GDP, which represents 25% to 35% of agricultural GDP, depending on the production level. Moreover, this industry contributes significantly to food security with meat; milk and its by-products; and eggs, having self-sufficiency ratios of 98%, 88% and 100%, respectively. 5
The food processing sector accounts for 5% of Morocco s GDP; provides employment to 90,000 persons; and satisfies 70% to 100% of the country s needs for processed food products. Processed food products account for 20% of total exports for manufactured goods. In 2001, investment in this sector reached 2.9 billion DH, representing 25% of the total industrial investment. The performance of the agricultural sector is highly dependent on climatic conditions, since 88% of the arable land is rain-fed. Furthermore, over two-thirds of Morocco can be classified as arid and semiarid with low, variable rainfall and frequent droughts. In the past two decades, rainfall has been erratic, causing large fluctuations in agricultural production and income. Cereal production, which is the largest component of agricultural GDP, varied from 1.8 million tons in 2000 to 10 million tons in 1996. As a result, the agricultural GDP growth during the last 5 years varied between 17% and +28%, dramatically affecting the Moroccan economy. Drought is no longer considered an exceptional phenomenon but rather a structural one. Drought affects not only the agricultural sector, but other sectors of the economy as well because of the high correlation between the performance of the agricultural sector and overall economic growth. Sectors mainly affected by drought are commerce, food processing industries and services. 2. Natural conditions and land use 2.1- Land resource potential and constraints. Morocco covers an area of 71 million Ha, with 39.2 million Ha or 55% have an agricultural orientation. This latter is made of 8.7 million Ha of arable land, 5.8 million Ha of forested land at and 24.2 million Ha of grazing land. Arable land accounts for only 12% of the country s total area. The limited supply of arable land is aggravated by water scarcity. About 7.3 million Ha or 87% of the arable land is rain-fed. Furthermore, two-thirds of this area receives, on average, less than 400 mm of rainfall per year, while 2 million Ha of this land mass is stony or fallow, which seriously limits productivity. Morocco faces tremendous difficulties in maintaining the renewability and sustainability of the nation s natural resources. Of the 20 million Ha of land in watersheds located upstream from current or future dams, approximately 5 million Ha face significant erosion risks. With an average soil loss over 2000 tons/km²/year in the Northern region of Rif, Morocco exhibits the highest erosion rate in the world (Ministry of Agriculture, Rural Development, Water and Forestry, 2001). Furthermore, some studies have estimated the average, annual loss in the storage capacity of dams, due to silting, at 50 million M 3, or 0.5%, of total capacity (Ministry of Agriculture, Rural Development, Water and Forestry, 2001). In rain-fed areas, land resources are also threatened by wind and water erosion leading to losses in soil fertility and arable land. An estimated 2.9 million Ha of arable land is in urgent need of soil conservation practices in order to preserve the sustainability of its production capacity in the long run (Ministry of Agriculture, Rural Development, Water and Forestry, 2001). 6
The unsustainable use of ground water, along with salinity and water pollution from untreated domestic and industrial wastewaters, threaten irrigated lands. Salinity is the most visible expression of land degradation. Approximately 500,000 Ha located mainly in the large scale irrigation areas are threatened by salinity (Ministry of Agriculture, Rural Development, Water and Forestry, 2001). Rangelands are also in danger with approximately 8.3 million Ha of land now heavily degraded. These lands are located mainly in the eastern and the southern regions of Morocco. Furthermore, development takes more than 65,000 Ha of the country s best grazing lands annually (Ministry of Agriculture, Rural Development, Water and Forestry, 2001). Climate variability, low rainfall, dry seasons lasting 4 to 6 months, and the cold winters in altitudes over 1500 meters are the major determinants of land degradation. Water scarcity and the fragility of arable land resources are increasing as population growth encourages the proliferation of unsustainable production patterns. 2.2- Water resource constraints: Morocco s mean annual rainfall is estimated to 150 billion cubic meters (BCM). However, the renewable water resources never exceed 29 BCM. After accounting for potential storage and ground water development, only 20 billion BCM are divertible annually, with 16 BCM from surface water and 4 BCM from ground water. As a result of a sustained water mobilization effort, one hundred large dams have been built, increasing the storage capacity from 2.3 BCM in 1967 to 16 BCM in 2002. The total of 16 BCM for 2002 is almost equivalent to the total amount of surface water that can be obtained from divertible sources. Some 11 BCM are now allocated to agriculture, domestic and industrial uses. Irrigation accounts for 88% of the water use, while 8% goes for domestic use and 4% for industry. However, irrigation is likely to receive less than what is allocated because of fluctuations in rainfall. Morocco is also endowed with estimated ground water resources of 4 BCM. Some 32 deep aquifers and more than 46 shallow ones have been inventoried. However, they are not evenly distributed across the country. Areas with low rainfall are may not have a dependable source of ground water. Groundwater use has increased from 1.5 BCM in 1960 to 2.7 BCM today. Land area that has irrigation potential is estimated to be 1.664 million Ha, of which 1.364 million Ha would receive perennial irrigation and 300,000 Ha would receive seasonal irrigation. The actual irrigated area amounts to 1,004 million Ha, of which 672,000 Ha in large scale irrigation and 332,000 ha in small and medium scale irrigation. Despite these substantial achievements in irrigation, Morocco will be facing a growing water shortage by 2020. The per capita amount of available water is expected to fall from 700 M 3 per year today to 500 M 3 by 2020. Morocco will shift from being classified as a water stressed country to being a chronically water stressed one. Water scarcity will be exacerbated by the expansion of irrigated agricultural production and urban development combined with a slow growth in available supplies, a depletion of aquifers and the pollution of available resources. A number of watersheds are 7
already experiencing water shortages, which will impose costly water transfers from well endowed watersheds to poorly endowed ones. Some of the more intensively used aquifers are now considered to be under stress with saltwater intrusion in the coastal regions. In addition to the high volatility, average, annual rainfall level is decreasing over time as shown in Figure 1. In mm 1000 Figure 1: Trend of annual rainfall 800 600 400 200 0 60 65 70 75 80 85 90 95 2000 Annual rainfall Trend Water quality and environmental issues are becoming a major challenge for decision makers. Domestic and industrial effluents from neighbouring cities are polluting many rivers and the situation is considered bad or very bad for eight streams out of 19. 2.3- Land and water use Overall cropping patterns are dominated by cereal production. Of the total cropped area of 8.97 millions Ha, on average over the last five years, 5.3 millions Ha were used to produce cereals, which represents 61% of total arable land. Fallow land accounted for the second most important use, covering over 25% of the area cropped, with fruit plantations representing 11%. Legumes, industrial crops, vegetables and fodder crops each represent less than 4% of total arable land. Rain-fed area, which accounts for 88% of arable land, is dominated by cereal production that cover 65% of the cropped area, followed by fallow land that occupies 21%. Olive groves and legumes occupy each 4% while fodder and industrial crops occupy 2% and 1%, respectively. Irrigated area can be divided into two types: large scale irrigation (LSI) and small and medium scale irrigation (SMSI). In large scale areas, cereals remain the predominant crop accounting for 32% of the cropped area, followed by olive orchards at 15%, industrial crops of sugar cane and sugar beet at 14%, vegetables at 13%, fodder crops at 11%, citrus at 6% and legumes at 2%. The SMSI areas are very diverse, and include modern and traditional irrigation techniques. They are located in mountain valleys, along the main rivers, in coastal plains, or over aquifers. The production systems vary from specialized crops for exports to subsistence farming based on cereals. Overall, these areas are also dominated by cereals production at 29 % of the cropped area, which is than that of rain-fed and LSI areas. Vegetables rank second 8
with 24% of cropped area, followed by the olive groves (11%), fodder crops (9%), citrus (6%), industrial crops (3%), and legumes (2%). Although irrigated land accounts for only 12% of the arable land, it contributes significantly to the production of basic food products, supplying 80% of the sugar beets, 100% of the sugar cane, 75% of the milk and 80% of the vegetables. Between 33% and 45% of the total value added by the agricultural sector comes from products produced on irrigated land, depending on the level production for the season. It also produces 75% of agricultural exports. In addition to being a major contributor to food security by boosting food production, the irrigated production sector employs 1.65 million people, which accounts for one-third of the rural jobs. It has promoted agro-industry; helped stabilize domestic production; and played a crucial role in alleviating drought effects. It has also raised productivity and incomes significantly by bringing modern agriculture to small farms. The flow of people from rural to urban areas has been reversed in some areas and the resulting natural resources conservation has relieved the pressure on areas with a fragile ecology. 3. Performance of the agricultural sector: 3.1. Introduction According to the 1996 general agricultural census, around 1.5 million farms in Morocco use an arable land mass of 8.7 millions Ha. Five different types of land ownership can be found in the country: private property (75.8%), collective ownership (17.7%), State domain (3.1%), Guich (another form of collective ownership: 2.8%), Habous 1 (0.6%). Almost 24% of the arable land, which amounts to more than 2 millions Ha, is affected by usufruct, and due to these type of property use rights, investment and intensive production patterns are discouraged. Land use rights are unevenly distributed and severely fragmented. Around 70% of the farms have less than 5 Ha and use 24% of the arable land. Farms having more than 20 Ha represent 4% of the total farm number but use 32% of the total arable land. The challenges of facing small farms are further aggravated by severe fragmentation. The average number of parcels per farm is 6.4 with an average parcel size of 0.92 Ha. 3.2 Products Cereals are the major crops grown in Morocco, both in terms of acreage and production (Table 1). These crops occupied an average, annual acreage of 5.3 million Ha, about 61% of the total arable land, for the period 1990-2002. Barley is the cereal most frequently planted with a 41% share of total cereal acreage, followed by soft wheat at 33% and durum wheat at 20%. Cereal yields vary considerably from one year to the next because cereal is grown mostly in rain-fed areas. The yields are also often low compared to the maximum yields that could be attained, according to the extension service. The erratic fluctuation of cereal production is well illustrated by its production index 2. This index varied from a minimum of 1 Land affected by individuals (liberality) to serve a community purpose, often to support mosques operating expenses, through the generated income. They re administrated by the Ministry of Habous and Islamic affairs that often rent them to farmers. 2 The base 100 is the average of the three-year period: 1999-2001. 9
40.3 in 1995, corresponding to one of the most severe droughts of the last century, with a production of 1.8 million tons, to 307 in 1996, corresponding with the record production of 10 million tons (see appendixes). The average yield since 1990 is almost one ton per hectare, resulting in an average annual production of 5.2 million tons for the period 1990-2002. Production is mostly made of soft wheat (44%), followed by barley (30%) and durum wheat (22%). The acreage in fruit plantations amounts to around 980,000 Ha (Table 2), of which 11% is arable land. Olive trees are the predominant specie, covering 560,000 ha and accounting for 57% of fruit plantation acreage, followed by almond trees at 14%. Citrus covers 76,000 Ha (8%), while vineyard covers 50,000 Ha (5%) and, pome and nut fruits (excluding almond trees) occupy 57,000 Ha (6%). Irrigated olive orchards cover an area of 200,000 Ha and are concentrated in the three provinces of Marrakech, Kalaa and Beni Mellal. This area accounts for 50% of the nation s olive production and 75% of the canned olives. Olive production faces a number of challenges, including the traditional, inefficient irrigation techniques, and the producers inability to organize themselves in order to achieve grater efficiency in production and marketing. Olive acreage tripled during the last three decades. This expansion is due in large part to a government incentive program that including the distribution of free olive seedlings in 1988. Yields average 1 ton/ha across all acreage types and 1.8 tons/ha in irrigated areas. Such figures are low when compared to other Mediterranean countries. In addition, yields vary considerably from one year to another due to the olive production alternation phenomenon 3, to poor technical production practices and erratic climatic conditions. Average olive production for the last five years is about 550,000 tons (Table 2). Of this, 65% is processed while 25% is used for table olive production and home consumption or losses account for the remaining 10%. Olive oil production is around 50,000 tons annually on average for the last five years. However, more than 85% of this oil is petrol oil (World Bank, 1993) that does not meet the quality standards recommended by the International Olive Oil Council. According to some estimates (Lahlou, 2000), olive oil production with less than 1.5% acidity, which includes virgin, extra-virgin and fine, does not exceed 3,000 tons. This situation stems from antiquated processing units and the lack of integrated marketing channels that can efficiently transmit quality signals from consumers to producers. Citrus acreage amounted to 76,000 Ha in 2002, with productive groves accounting for 68,200 Ha (Table 2). This acreage has been has not increased over the last 30 years. The implementation of a national action plan, that provided investment subsidies and included the goal of expanding production by 2000 Ha/year for the period 1998-2005, was not effective. Water shortages and market risks, combined with a lack of long-term market visibility have prevented the expansion of citrus production. 3 The production alternation phenomenon is a biologic phenomenon that characterises olive trees and that results in an up and down trend of yields: a good yield in a given year is automatically followed by a low yield the year after. 10
Citrus production is irregular with an average, annual production of 1,282,940 tons over the last five crop years (Table 3). Citrus yields are low compared to other Mediterranean countries and fluctuate significantly, depending on varieties, technical production practices, geographic regions and climatic conditions. Average yield for all varieties combined is 19 tons/ha, which is low compared to other major producing countries, such as the USA at 40 tons/ha in Florida and 35 tons/ha in California. The overall average yield varies between 14 tons and 20 tons/ha. Average yields vary from 20 to 22 tons/ha for Maroc Late variety, 15 to 18 tons/ha for Navel and 12 and 15 tons/ha for Clémentine. Nearly 78% of production includes the three varieties of Clémentine, Navel and Maroc Late. Furthermore, over the last five years, yield is trending downward, decreasing by 25% to 30% in total. Citrus production is affected by several structural constraints including: aging orchards, water shortages and high water pumping costs, and a lack of certified, high quality seedlings adapted to local conditions and climatic conditions. The vegetable sector occupied 242,000 Ha annually, on average, over the last five years. Primarily, potatoes, tomatoes and onion are produced, with acreages for 2001-02 of 62,000 Ha, 31,000 Ha and 12,500 Ha, respectively. Production averaged 5 million tons, of which 75% are in-season vegetables, 20% are early vegetables and 5% are processed vegetables. Early vegetables are cropped along the Atlantic coast from Larache to Agadir (Table 4). Total acreage amounted to 24,500 for the crop year 2001-02, showing a 17% increase as compared to the 1996-2000 average, and by 2% as compared to 2000-2001. Total acreage was relatively stable until 1998, and then it began to grow at the rate of 5.8 % per year for the next four years. While early vegetables acreage increased from by 17% from 1990 to 2002, production doubled during the same period, increasing from 600,000 tons on average during the period 1990-1995, to 875,000 tons for the period 1996-2000, to 962,000 tons in 2000-01 and to 1.1 million tons in the 2001-02 crop year. This improved performance stems from a substantial improvement in productivity linked to the introduction of new varieties, the adoption of better production techniques, such as micro-irrigation and better disease management and the use of greenhouses. Tomatoes and potatoes are the major early vegetables crops. In 2001-2002, tomatoe acreage was around 5,900 Ha and represented 24% of early vegetables acreage. This acreage is 25% higher than the previous year due to strong prices and improved disease management. However, since 1990 average acreage stabled at around of 5,500 Ha. During the same period, tomatoe production increased considerably, from an average of 355,000 tons during the period 1990-1995 to 524.000 tons in 1996-2000 (+48% increase). During the crop year 2001-02, it reached 565,000 tons, a 28% increase relative to the year before (446,000 tons). This production represents 51% of the total production of early vegetables Potatoe acreage, stable with an annual average of 10,000 Ha since 1990, represents almost 50% of early vegetables acreage. In 2001-02, acreage has even decreased by 35% as compared to the 1996-2000 average and by 26% relative to the previous crop year. Production followed the same trend, decreasing from an average of 154,000 tons during the period 1996-2000 to 130,000 tons in 2001-02 (-16%). This decline is mainly due to a poor export performance. 11
While tomatoe and potatoe acreage have been stagnate, other fruits and vegetables have been growing at a double-digit rate, indicating increased product diversification. The new products are mainly strawberries whose acreage was multiplied by 5.5 times since 1992, increasing from 292 to 1890 Ha, melon under greenhouses, whose acreage increased from 270 Ha in 1992 to 2,045 Ha, (that is an increase by 6.6 times), and French beans, whose acreage increased from 900 Ha in 1990 to 2,325 Ha in 2002, (that is almost a 160% increase). In addition to this product diversification, early vegetables production has been shifting from open field to greenhouses in order to take advantage of off-season export opportunities the EU. Tomatoe acreage in greenhouses increased by 60% from 1992-93 to 2001-2002; while tomatoes acreages in open field decreased by 32%. Early vegetables yields vary depending on varieties and the climatic conditions of the crop year. The average yield for all species fluctuates between 26 and 44 tons/ha, depending upon the crop year. Tomatoe yield improved significantly from 50 Tons/ha in the early 1990s to 99 Tons/ha, on average over the last five years. This increase is due to improved technical production practices and new varieties. Potatoe yield is stable and does not exceed 20T/Ha. As for the other crops, their yield shows an upward trend due to new, more productive varieties. Seasonal vegetables are cropped in all regions and are destined exclusively to the domestic market. The total acreage for the crop year 2001-02 was 201,000 Ha, which is 6% lower than the previous year and 5% lower than the 1996-2000 average (Table 5). However, with respect to 1990-95 average, acreage in 2001-02 increased by 11%, while production increased by 43%, indicating a substantial gain in productivity. Seasonal vegetable production is diversified. Potatoes, tomatoes, carrots, turnips, melon and water melon represent 68% of acreage and 78% of production. Total production amounted to 4.2 million tons, increasing by 13% from the year before and by 15% compared to the 1996-2000 average production, in spite of a slightly decreasing acreage. This increase is due to favourable climatic conditions during the seeding period especially for tomatoes, potatoes, onions, melon and watermelon. However, annual fluctuations in production are caused by climatic changes since many of these crops are grown in rain-fed areas. Processed vegetable acreage was around 6,000 Ha versus 7,800 Ha the previous year and 10.800 Ha on average during the period 1996-2000. Total production declined to around 192,000 tons from 249,000 tons the previous year and averaged 262,000 tons during the period 1996-2000. Tomatoes are the predominant vegetable in this category with 97% of total processed vegetable production. Livestock production data since 1990 shows the existence of two distinct periods. From 1990 to 1996, production was relatively stable with the index hovering around 80. From 1996 to 2002, the production index increased steadily at an annual growth rate of 4.7% per year, reaching 105.4 in 2002 (Figure 2). 12
Figure 2: Livestock production index 110 100 90 80 70 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: www.fao.org An average increase in poultry production of 11% per year since 1995 is credited with causing the bulk of the increases in the livestock production index since 1996. Milk production has also been increasing steadily but at a lesser rate of 5%, while red meat production has been erratic, although a slight upward trend is present. A major part of the red meat production, especially that from sheep, occurs in rain-fed grazing areas, making it vulnerable to climatic conditions. Red meat production amounted to 320.000 tons in 2002, showing respectively 13% and 27% increases with respect to the 1996-2000 and 1990-1995 averages. Since 1990, production increased at annual rate of 2.2% per year (Table 6). Poultry meat production amounted to 315,000 tons in 2002 (Table 7), which represents an increase of 29% with respect to the 1996-2000 average and of 154% with respect to the 1990-1995 average. Over the period 1990-2002, poultry production increased at a rate of 7% per year. Milk production amounted to 1.2 million litres in 2002, showing 18% increase compared to the 1996-2000 average and 40% increase with respect to the 1990-1995 average (Table 8). Over the last 12 years, milk production has been increasing at 2.7% per year. Livestock production is affected by a variety of structural issues and technical production challenges. Frequent droughts, insufficient economic infrastructure in rural areas, small herd size (85% of cattle breeders have less than 3 animals and 68% of sheep breeders possess less than 30 animals), and insufficient human capital due to illiteracy, seriously impede the development of livestock production. Furthermore, constraints related to limited genetic resources, especially for cattle and goats, inefficient production practices and insufficient producer organization also limit the development of this sector. 3.3- Intermediate inputs According to the 1996 General Agricultural Census, only 50% of farmers use fertilizers. This rate varies from 46% for the farms under one hectare to 73% for farms above 100 Ha. 13
The quantity of fertilizers used during the crop year 2001-2002 amounted to 954,000 tons. The consumption of fertilizer has been growing at a yearly rate of 8.3% since 1996. This volume is however far below the annual optimum for fertilizers estimated at 2.5 million tons. The average number of fertilizing units (NPK) per cultivated hectare has been stagnating at 45 units (NPK) since 1990. In addition to the negative effects on crop productivity, the low use of fertilizers depletes the soil. After accounting for the crops withdrawal, researchers estimate a deficit of 69% in Phosphorus exits. In 2002, total pesticide sales amounted to 523.7 million DH, of which 45% is insecticides, 27% is fungicides, 13% herbicides. In volume, sales amounts to around 9,000 tons, of which 53% are made of fungicides, 37% of insecticides and 10% of herbicides. These products are mostly used for vegetables (34.5%), fruits (20%), and cereals (14%). Pesticides are generally underused, especially for cereals. According to a survey on the use of pesticides for cereals, only 520,000 Ha were treated, which represent around 11% of cereal acreage (Ministry of Agriculture, Rural Development, and Fishery, 2002). 3.4- Machinery and equipment Moroccan agriculture is under-mechanized with only 50% of the farms using machinery. The number of tractors is estimated at 43,000 (1996-97 figure), owned by 36,000 farms, while the estimated need is 77,000 tractors. In terms of horsepower per hectare, the mechanization rate is estimated at 0.35 horsepower per hectare versus an FAO standard of 0.5. Soil plowing equipment is not diversified. The ratio of equipment per tractor is 2, while the recommended ratio is 4. Cover crop and disc equipment represent 70% of the equipment total. The number of cereal seeding machines is 3,200, assuming one machine for 11 tractors. This situation will last at least for the next few years since annual sales do not exceed 200 units. The number of combine harvesters is insufficient and has been stable around 3100 units during the 1990s, which corresponds to a ratio of 650 Ha per combine harvester, versus a recommended ratio of 450. The high volatility of cereal production due to successive dry seasons has caused this under-investment. 3.5- Water use Cropping patterns in large scale irrigation 4 are dominated by cereal crops that cover 37% of these perimeters (180,409 Ha), followed by the fruit plantations that occupy 25.5% (124,815 Ha). Industrial crops (sugar beet and sugar cane) and fodder crops that each represent 14% of the cropped area (around 70,000 Ha). Vegetables crops that generate a high value added do not exceed 5% of the cropped area (22,300 Ha). This cropping pattern results in a low crop intensification rate 5 of 96% for the period 1996-2001 (Benjelloun, 2002) versus the goal of 120%, which reveals a low use of irrigation equipment and infrastructure. The intensification gap is equivalent to a loss of 2.5 billion DH in terms of value added. 4 Data on cropping patterns for small and medium scale irrigation are not available. 5 Ratio of total cultivated acreage over the usable agricultural land equipped with irrigation infrastructure. 14
The total volume of water allocated to irrigation amounted 2,827 million M 3 (MM 3 ) per year on average over the last ten years. But this volume varied from a minimum of 2,130 MM 3 in 2001-02 to 3,588 MM 3 in 1996-97, depending on available water resources. It varies from one area to another since the different area are not endowed with the same water resources. At the parcel level, water consumption is 5300 M 3 /Ha on average and varies according to the crops in place: 15000 M 3 /Ha for alfalfa, 11,800 M 3 /Ha for rice, 8500 M 3 /Ha for sugar cane, 8000 M 3 /Ha for citrus, 7500 M 3 /Ha for vegetables, 5500 M 3 /Ha for sugar beet, 3000 M 3 /Ha for olive trees and 2600 M 3 /Ha for wheat. Overall, fruit plantations dominate the demand for irrigation water employing, on average, 40% of the irrigation water. This increases in dry seasons when water is rationed, in order to keep these perennial crops productive in the future. Cereals, industrial crops (sugar cane and sugar beet) and fodder crops, which occupy around 71% of irrigated area, consume around 53% of allocated irrigated water (Ministry of Agriculture, Rural development and Fishery, 2001). Vegetables cover 5% of the irrigated acreage and consume 7% of the allocated water. Gravity irrigation is the prevailing system and covers 971,000 Ha, which represents 83% of the total irrigated area. Sprinklers systems, designed for sandy and hilly soils, cover 155,400 Ha (13%), while micro-irrigation systems cover only 4% (44,000 Ha). The adoption of this latter system is increasing at a rate of 2,700 Ha per year. The efficiency rate is 40% for gravity irrigation system (80% in the irrigation network and 50% at the parcel level) and 60% for sprinkler systems (85% in the irrigation network and 70% at the parcel level). In order to promote water saving irrigation techniques, efforts are underway to encourage the use of micro-irrigation systems. The conversion to micro-irrigation would 30% to 40% of the water used by the current irrigation systems, in addition productivity gains of 40% to 100%, depending on the crops, and cost savings of 30% due to decreases in fertilizer use. 3.6- Labour force and employment in agriculture Agriculture provides the majority of rural jobs. Over the last four years, the contribution of the agricultural sector amounted to around 82% of the rural employment, followed by services (10%), industry (4.5%) and building industry (4%). Over the last four years, women s share in the active rural population varied between 28.5% in 2002 (versus 22.5% in urban areas) and 33.9% in 1999 (versus 24.4% in urban areas). Unemployment varied between 3.9% in 2002 and 5.4% in 1999 in rural areas versus a range of 18% to 22% for urban areas. 15
3.7- Sources of income in rural areas Rural population represents 46.2% of the total population in Morocco but earns only 31.3% of the national income. Rural incomes are mostly derived from agriculture since independent agricultural activities provide for 43.6% of income (31.2% from crops and fruit plantations and 8,4% from livestock activities). Including the consumption of home produced food products (9.1%), the total income of agricultural origin represents 52.7%. Non agricultural sources of income are mainly wages (18.6%), income transfers (7.8%) and independent non agricultural activities (6.1%). 4. Upstream and Downstream Sectors 4.1- Upstream sectors Over the last years, agriculture has made a substantial progress in becoming more in integrated with the rest of the Moroccan economy. Currently, agriculture buys about 5 billion DH from upstream sectors. Intermediate consumption increased from 12.5% of the value of agricultural production in 1960 to 28.8% in 1996. 4.2. Food processing sectors The food processing sector includes 1745 industrial units, which represent 24% of the country s total industrial units (Table 9). This sector includes three sugar refineries, 13 sugar plants, 14 grain oil plants, 170 modern olive processing units, six cooperatives and five private milk processing companies. In 2002, the total production value of the food processing sector amounted to 57 billion DH, which represents 33% of total industrial production. With more than 20 billion DH of value added, it is one of the most important sub-sectors contributing 33% of the industrial GDP. Exports, composed primarily of fish products (65%), amounted to almost 10 billion DH, which represent 20% of the exports for manufactured products. An analysis of the performance of different food processing sub-sectors for the year 2002 shows that in terms of value added, even though flour making is the most important in terms of the number of companies (53%), it only generated 5% of the total value added in food processing. The fish processing industry accounts for 11% of the food processing firms and contributes to 65% of Morocco s agri-food exports, and 15% of agri-food value added investments. The beverages industry, with only 1.7% of the food processing firms, generated 21% of agri-food value added and 22% of agri-food investments. The dairy, and oil and fats industries accounted respectively 3% and 6% of food processing firms in Morocco and contributed to the agri-food value added with respective shares of 15% and 8%. The fruit and vegetables processing sector is composed of 107 industrial units (6% of the whole food processing industrial units). It generated 477 million DH of value added, which represented 3.9% of the total food processing value added, and its exports represented 17% of Morocco s total processed food exports,. Almost 70% of the processed fruit and vegetables production was exported to the EU markets and many benefited from advantageous access conditions. The majority of the products exported include condiments 16
such as olives and canned gherkin; canned vegetables such as green bean, tomato paste, mushroom, peeled tomatoes; canned fruits, mainly apricots; and jam, vegetable and fruit juice, mostly citrus; frozen and deep frozen fruits and vegetables such as strawberries and artichokes; and dried, dehydrated or crushed fruits and vegetables such as apricots, tomatoes, and pepper. Fish, along with fruits and vegetables, are the main contributors to the agro-food processing trade balance. They represent 82% of the total food processing s exports. Over the period 1998-2002, the agri-food industry performed well compared to the manufacturing sector in general, especially in terms of exports and investments. Agri-food exports increased steadily at an average rate of 9% per year (42% over the whole period) versus a rate of 5% for the manufacturing sector (23% over the whole period). Investment increased as well but varied more than exports. It increased by 19% from 1998 to 2002 (4.4% per year on average) versus 6.6% for the manufacturing sector (1.6% per year on average) for the same period. As for value added, it increased by 11% for the agri-food industries (2.6% per year on average) versus 13% for the whole manufacturing sector (3.1% per year on average). While the number of persons employed remained stable in the agro-food industries, it slightly decreased (-3.7%) in the manufacturing sector. The strong performance of the food processing sector as a whole over the period 1998-2002 could be attributed to processed food firms that are not involved in fruits and vegetables. Indeed, the processed fruit and vegetable sector experienced declining trends for its production, value added for all the above indicators from 1998 to 2002. Thus, its production decreased by almost 20% between 1998 and 2002, other indicators such as value added, investments, exports and number of processing units, declined respectively by 41%, 39%, 23% and 16.5% for the same period. 5. Food consumption According to the 1998-99 consumption survey, food expenses represent, on average, 43.1% of the household budget (versus 45,5% in 1991). This percentage is higher however in rural areas, reaching 54.2% as compared to 38.4% in urban areas. Consumption patterns are not diversified and are dominated by plant products, especially wheat for bread, couscous and semolina and sugar which offer cheap calories compared to animal products. The rural population also consumes more vegetables than the urban populations. Rural population consumes more cereals (23.5% versus 16.9% for urban population), more fats (9% versus 6.1%), more sugar (4.8% versus 2.7%). Urban households, on the other hand, allocate higher shares of their food budget to meat (25.6% versus 22.6% for rural households), milk products and eggs (7.8% versus 4.8%), fruits (5.3% versus 3.9%), and fish (3.1% versus 1.6%). The per capita food consumption are among the lowest among the southern Mediterranean region, except for cereals, whose per capita annual consumption is among the highest in the region (240 Kg). Per capita consumption is 106 Kg for vegetables (versus a range of 100 to 200 Kg); 63 Kg for fruits (versus a range of 60 to 95 Kg); 19 Kg for meat 17
(versus a range of 15 to 70 Kg); 33 Kg for milk (versus a range 15 to 150 Kg); and 13 Kg for edible oils and fats (versus a range of 10 to 25 Kg). The per capita food consumption did not change significantly between 1991 and 2000, however several small changes did occur. Wheat consumption decreased by 3.4% (174 Kg versus 168 Kg) and milk consumption showed a slight decrease (34 versus 33 Kg), while the consumption of other products also increased, including a 13% increase for sugar (35 versus 31 Kg), a 4% increase for vegetables (102 versus 106 Kg), a 5% increase for fruits (63 versus 60 Kg), a 14% increase for fish (8 versus 7 Kg), an 8% increase for oils and fats (13 versus 12 Kg). Meat consumption was stable at 19 Kg. Self-sufficiency ratios Morocco policies aimed to achieved the self-sufficiency for basic food products such as cereals, sugar, oils, meat and milk during the 1960s and 1970s. Structural Adjustment Programs, instituted in the mid-1980s, were also aimed at increasing food security. Over the last three years (2000-2002), self sufficiency ratios reached 98% for red meat, 88% for milk, 53% for sugar, 42% for cereals and 12% for edible oils. For fruits and vegetables, this ratio exceeds 100%, making Morocco is net exporter of these products. Trend analysis shows the self sufficiency ratios for red meat were 99 percent in 2002 and have been at this high level for many years(table 8). This is due to high import tariffs and to the existence of a growing poultry sector that provide a substitute for red meat. Milk and butter ratios are less stable than red meat ratios, varying respectively from 79% to 90% and 29% to 45% (Table 10). A slight upward trend from 1990 to 2002 exists. Production originates mostly from irrigated areas and is therefore less subject to climate risks. Sugar s ratio showed a downward trend since 1990. From an average of 59% for the period 1990-95, it dropped down to 50% for the period 1996-2000. After an improvement in 2001 (55%), it dropped again to 48% in 2002 (Table 11). Productivity problems and shortages of irrigation water in recent years are the primary causes for this trend. The cereals self-sufficiency ratio fluctuated from one year to another depending on climatic conditions since these crops are generally produced on rain-fed land (Table 12). As for edible oils, the self-sufficiency ratio has been decreasing from 52% in 1990 to 34% in 1995 and 12% on average from 2000 to 2002 (Table 13). Decreased profitability of sunflower due to low yields, which is the main source of edible oils, have caused this decline. 6. Trade in Agro-food products 6.1. Structure of trade in agro-food products Morocco s exports amounted to 43.6 billion DH, while import reached 127.6 billion DH producing a 2002 trade deficit of 43.1 billion DH, which is 11% of GDP. Exports covered 66.2% of imports. Exports and imports of food products, beverages and tobacco represent respectively 20% and 12% of the trade balance. 18
Morocco s agri-food exports are not highly diversified and are concentrated on five types of products that represent 83% of total agri-food exports in 2002 (Table 17). - Shellfish and mollusc exports were 5.23 billion DH, representing 31% of agrifood exports; - Canned fish exports were 2.77 billion DH, representing 17% of agri-food exports. - Fresh citrus exports were 2.31 billion DH, representing 14% of agri-food exports. Clémentine and oranges are predominant in these exports with respectively 48% and 47%. - Fresh vegetable exports were 1.93 billion DH, representing 12% of agri-food exports. Tomatoes and potatoes are the main products in this group with shares of 59% and 10%,respectively. - Processed fruit and vegetable exports were1.63 billion DH, representing 10% of agri-food exports. Olive exports dominate at 52%, followed by canned apricot and fruit and vegetable juice with shares of 10% and 6% respectively. The remainder is made of canned vegetables (green bean, tomatoes paste, mushroom, peeled tomatoes), canned gherkin, frozen and deep frozen fruits and vegetables (strawberries, artichoke), dried, dehydrated or crushed fruits and vegetables (apricot, tomatoes, pepper). Analysis of agricultural trade shows that exports increased, in volume, by 22% between 1990 and the period 2000-2002, and increased in value terms by 57% (Table 18). The slight annual increase in volume (2% on average) can be explained by the lack of export diversification in terms of the products and in terms of the markets and a loss of competitiveness for some products such as potatoes, oranges and some processed fruits and vegetables. The growth since 1990 in the value of agricultural exports has been, on average, 5% annually. It stems mainly from increases in the category of fresh vegetables that increased by 58% in terms of volume and 162% in terms of value between 1990 and the average 2000-2002 (or 10% a year growth rate from 1990 to 2002). Tomatoes are the driving force behind this growth, since its exports value grew at a rate of 9% a year on average from 1990 to 2002. Citrus exports were stable in terms of volume, but increased in value by 48% between 1990 and the period 2000-2002 (or 3.6% a year between 1990 and 2002). While the export of orange varieties other than Clementine were stable both in terms of volume and value, Clementine s exports increased by 163% between 1990 and the average 2000-02, which corresponds to a 9% annual growth rate. Potatoes exports remain stagnant during the same period in spite of annual variations. Processed fruits and vegetables exports showed a slight decrease both in terms of value and volume. Canned olives exports grew at 5% a year on average, but did cot compensate for the decrease in other products such as beans, gherkin and cucumber, and fruit and vegetables juices. 19
As for olive oil, exports are sporadic due to quality problems and production volatility. To illustrate this volatility, exports increased to 1,600 tons in 2001-02 as compared to 84 tons the previous year. Morocco s agri-food trade exhibits limited market diversification. The EU absorbs 76% of Morocco s agricultural exports, with France is the main EU market. According to ITC (International Trade Center) data, 81% of tomatoes export goes to France. The two markets that absorbed 83% of the country s processed leguminous vegetable s exports are France (61%) and Spain (22%). Prepared or preserved vegetables exports are mostly destined to France (39%) and the US (26%). Citrus exports markets are less concentrated with the two leading markets absorbing only 45% of the total (Russia: 29% and France: 16%). Outside the EU, Russia and the US are privileged markets for citrus and for prepared or preserved vegetables, respectively. Food imports are composed of basic food products for which domestic production is less than domestic demand (Table 19). Three basic food products represent 72% of agro-food imports. Cereals with 8 billion DH imports on average over the last three years, represent 53% of agri-food imports. Cereals rank number one for imported agricultural products. More than half of cereal imports consist of soft wheat (52%), followed by durum wheat and maize with respectively 20% and 16% in total cereal imports. Edible oils with 1.5 billion DH imports represent 10% of total agro-food imports. Edible oils are imported mainly in the form of soybeans, crude edible oils and soybean grains. Sugar with imports amounting to 1.5 billion DH, represents 10% of total agro-food imports. Agri-food imports have increased considerably since 1990 and have significantly deteriorated the agricultural trade balance. Imports more than tripled since 1990, increasing in volume from 2.1 million tons to 6.6 million tons (average for 2000-2002) and in value from 4.8 billion DH to 15.3 billion DH over the same period. The rise in agri-food products imports over this period is due to primarily to a years of low rainfall and a steady increase in population. Sources of agri-food imports are not diversified. According to the ITC data, all of soybeans imports originated from two countries: USA (55%) and Brazil (45%) and more than 70% of soybean oil originated from Argentina (45%) and Brazil (26%). All cane and beet sugar is imported from Brazil (94%) and South Africa (6%). Tea is essentially imported from China (98%). The import sources for cereals are more diversified. The two leading exporting countries provide only 52% of the barley (28% from Russia and 24% from Ukraine) and 43% of the wheat (25% from Canada and 18% from France). In the case of wheat, durum wheat is mostly imported from Canada and soft wheat comes from France, USA, Ukraine, Argentina, Australia and some countries of Eastern Europe. 20