In all MPC, there are certain key characteristics that also shape a rather uniform agro-food policy agenda that is applicable throughout the region. These characteristics are:
The low self-sufficiency rates and the reliance on imports The scarce natural resources and especially water
The high unemployment rates
The high poverty rates especially in the rural areas
The low productivity and competitiveness of domestic agricultural sectors
Hence, the main objectives of agricultural policies in the MPC can be summarised to the following (Lindberg, et al. 2006):
Increase the volume and yield of agricultural production Increase the competitiveness of the agricultural sector Achieve partial or total food self sufficiency
Support farmers’ incomes
Improve the living standard in the rural areas
Protect the natural resources with special consideration given to water
In addition, given the MPC’s willingness to participate in international trade organizations and increase their access to world trading markets, most MPC (not with the same pace however), have introduced a series of trade reforms in the recent years in an attempt to liberalise their own domestic markets and meet the requirements set by bilateral and/or multilateral trade agreements. Most quantitative import controls were abolished and tariff rates have been reduced (even before the 2007/08 food price crisis). Nevertheless, the MPC still have highly protective agricultural sectors; guaranteed prices for staple as well as industrial crops are a common practice in countries such as Morocco, Tunisia, Egypt and Syria, as are also input subsidies (i.e. fertilizer, pesticides, fuel, water etc) (World Bank 2008).
In Algeria, the plan to renovate the agricultural sector, the Plan du renouveau agricole et rural, accelerated in 2010 with the funds of DZD 1 trillion. Under this plan, a significant part of the debt owed by farmers has been written off, while the implementation of provisions for the disposal of private state land also accelerated and the first civil, joint-stock agricultural companies aimed at opening up the capital of agricultural holdings to national savings were created. (African Economic Outlook 2011).
In Egypt, the following objectives have been identified as the key ones to achieve a sustainable agriculture system:
Sustainable use of natural agricultural resources;
Increasing the productivity of both the land and water units;
Raising the degree of food security of the strategic food commodities;
Increasing the competitiveness of agricultural products in local and international markets;
Improving the climate for agricultural investment;
Improving the standards of living and reducing poverty rates in the rural area
In Jordan, the government has expressed considerable concern about its "food security" and its high food import bill. Therefore, it has plans to increase crop production since the last decade of the past century. However, despite increasing investment there is a slow pace of progress.
Consequently, Jordan is implementing a two-pronged agricultural development policy. The long-term strategy, which aims at increasing the total area under cultivation by better harnessing water resources to increase irrigation of arid desert areas for the cultivation of cereal crops. In the short term, the government is attempting to maximize the efficiency of agricultural production in the Jordan River valley through rationalization or use of resources to produce those items in which the country had a relative advantage.
Rationalization has started with a controversial government decision to regulate cropping and production, primarily in the Jordan River valley. Farmers there had repeatedly produced surpluses of tomatoes, cucumbers, eggplants, and squashes because they were reliable and traditional crops. At the same time, underproduction of crops such as potatoes, onions, broccoli, celery, garlic, and spices led to unnecessary imports. The government has offered incentives to farmers to experiment with new crops and cut subsidy payments to those who continued to produce surplus crops. Thereof, cucumber production dropped by 25% and tomato harvests dropped by more than 33%, while self-sufficiency was achieved in potatoes and onions.
The current agro - food policy objectives of the Lebanese Government are focused on:
Providing the necessary infrastructure such as roads, irrigation systems and extension and research services,
Securing a steady stream of reasonably priced produce for the Lebanese consumer, giving assistance and support to the local producers,
Creating suitable environment for competition and the efficient flow of information,
Coordinating market activities to protect the economy from the negative effects of market failure.
In Libya, the number of peasants who gave up farming to look for jobs in the oil industry and in urban areas rose dramatically throughout the 1955-62 period. Another adverse effect on agricultural production occurred during the 1961-63 period, when the government offered its citizens long-term loans to purchase land from Italian settlers. This encouraged urban dwellers to purchase rural lands for recreational purposes rather than as productive farms, thereby inflating land values and contributing to a decline in production.
Since the seventies the Libyan government had paid more attention to agricultural development.
The government has given inducements to absentee landlords to encourage them to put their lands to productive use and initiated high agricultural wage policies to stem the rural-to-urban flow of labour. These policies met with some success. Production levels began to rise slightly, and
many foreign workers were attracted to the agricultural sector, particularly from Egypt and Tunisia and subsequently from other African countries.
Agricultural development became the cornerstone of the 1981- 85 development plan, which attached high priority to funding the Great Man Made River (GMMR) project, designed to bring water from the large desert oasis aquifers of Sarir and Al Kufrah. Interest free agricultural credit was provided by the National Agricultural Bank, which in 1981 made almost 10,000 loans to farmers at an average of nearly 1,500 Libyan dinars each. The substantial amounts of funds made available by this bank may have been a major reason why a large number of Libyans, nearly 20% of the labour force in 1984, chose to remain in the agricultural sector.
Agriculture and rural development are strategic issue for Morocco given its importance for the economic development of the country. Currently, the government policy aims at strengthening human and physical resources that are needed to reach the goals of the 2020 strategy for rural development. The overall vision is quite remarkable, it deals with a couple of key instruments including the Agricultural Development Fund (ADF), the Green Morocco Plan (GMP), the National Strategy for Development of Water Sector, the Fisheries Plan, the environmental policy, the agro-food industry and distribution incentives and the consumption support policy.
On the production side, public policy in Tunisia as regards staple food commodities has always tried to seek a compromise between the desire to boost producer prices so as to support farm incomes and, at the same time, take advantage of the relatively low prices that have prevailed at the world market during several decades. In actualities and in the case of cereals, this resulted in putting a ceiling on domestic producer prices during all of the seventies, eighties and nineties. This situation prevailed practically all the way through the world food crisis of 2007 and 2008. In the meantime, Tunisian cereals imports kept increasing, mostly in terms of quantities. The resulting public compensation was initially somewhat manageable, anywhere between a third and half of the price of imports for Durum wheat and 50 to 75%, in the case of soft wheat. During the food crisis period (2007 and 2008), the amount of subsidies got multiplied by 2 or 3 and, during some months of the year 2008, by 4. On the consumption side, public policy has been for a long time that of maintaining cereals prices low to preserve the income purchasing power of the middle to poor income segments of the population.
Studies have shown that the Tunisian universal subsidy program allocated to the cereals sector, as practiced during the seventies and early eighties, resulted in an uneven distribution of public budgets between various segments of the population, particularly the rich and the poor. While public subsidies were designed to help the poor, in the first place, they ended up helping rather the least needy; i.e., the higher income brackets of the population. This has resulted in a major economic reform that the country went through during the eighties and nineties.
During recent decades, attempts were made to identify ways to target the subsidies to the truly needy people of the country. First timid attempts were made to target food subsidies to the poor by gearing them towards economically inferior products (large size bread, bread made by bakeries located in remote areas, etc.). Then there was the adjustment in the weight of bread itself, which was gradually reduced from initially near a kilo per bread to about 400 grams, nowadays. In a parallel fashion, timid but continuous increases in the prices of basic bread, as well as other basic cereal by-products, were initiated. Apart from what is usually considered in the country as basic food commodities; i.e., other categories of bread and cereal by-products destined to pastries became marketed freely of any administrative control.
As indicated above, Tunisia has recently known political uprising which led to a change of the President of the country but also of Interim Governments on three different occasions. Presently a significant amount of work is being done to lay the groundwork for democratic elections for the
first time in the history of the country. It is expected that by the end this year a new Government would be put in place and, among other things, a new agricultural policy will be designed. To what extent the new set of agriculture and food policies will inherit past policy trends, is anybody’s guess. Will it reinforce previous public commitments to market liberalization, as materialized by the country’s adherence to most world trade agreements (WTO, EU, Arab State trade agreements, etc.), or will it be more social in nature by reviving some features of the old protectionism era, is hard to tell. From the lessons that were learned during this uprising which revealed the existence of major poverty pockets and a very skewed distribution of growth between the costal zones and the western inland areas, it may be fair to assume that future agricultural and food policies will be more social in nature in that they will be put a major emphasis on inequity reductions between population segments and geographical zones of the country.
This should imply continuous government intervention in the economy, but interventions that will likely be aimed at reducing income disparities between the western and coastal areas of the countries, on one hand, and between various segments of the population, on the other. This could take the form of additional taxation for the rather well off parts of the country or the population and designing appropriate mechanisms to further support the other parts or segments.
Agriculture was one of the sectors that were targeted for structural reform in order to stabilise the Turkish economy. Aside from promoting allocative efficiency in the agricultural sector, reforms were necessary for fiscal stabilisation. “The Agricultural Reform Implementation Project (ARIP)”, was launched in 2001 and implemented during 2001-08. The project was underpinned by the World Bank and it was also a pre-condition of obtaining International Monetary Fund (IMF) support for the macroeconomic stabilisation programme, which aimed to reduce the high inflation rate and stabilise the general price level. Under ARIP, Turkish agriculture policy has been oriented towards closer alignment with the EU’s CAP. Under the reform programme, agricultural related measures have been taken in four main areas: i) reducing output intervention purchases financed from the budget leading to price cuts; ii) phasing out price support, credit and fertiliser subsidies, and replacing them by a less distorting direct income support (DIS) scheme to farmers based on a uniform per-hectare payment; iii) withdrawing the state from direct involvement in production, processing, and marketing of crops; and (iv) making available one-time transition grants to farmers. ARIP is implemented to set up NFRS and provide technical and financial assistance to restructure ASCUs, to facilitate the reform program described above. Within the reform framework, indirect support policies (price and input subsidies) were phased out at the end of 2002 and replaced with the DIS programme. DIS payments (about USD 90 per ha) were independent from crop type and quantity of agricultural production and were made to those farmers (individual persons or legal entities) dealing with land-based agricultural activity, regardless of the status of land tenure. Farmers must be registered in the National Farmers’
Registry System (NFRS), which was initiated in 2002. DIS payments were started in 2002 according to NFRS for land between 0.1ha and 50 ha. Agricultural land either needed to be tilled or otherwise sustained for agricultural use. Farmers must be associated with agricultural activity for minimum of one production season (8-10 months) on the same land. State-owned land; deserted or inaccessible agricultural land with no current use; forestry areas and communal property, such as pastures, were excluded from DIS payments. Additional DIS payments were granted to farmers who undertake soil analysis, practice organic farming or utilise certified seeds on their land.
Payments for soil analysis were limited to a maximum area of 6 ha. DIS payments were applied to over 16.4 million ha of land (around 63% of total agricultural land) and have benefited 2.8 million farmers (89% of the total).
A key element of ARIP was the privatisation of SEEs and the restructuring of ASCUs. The state-owned Turkish Sugar Company (TURK SEKER) and the state-state-owned Tobacco Company (TEKEL)
were to be privatised, whereas the TMO and quasi-governmental ASCUs, which had previously administered support prices for certain commodities, were to be restructured. ARIP supported the implementation of the 2000 ASCU Law. Prior to this date, most of the ASCUs had been acting as government purchasing agencies, and were highly overstaffed and lacked working capital. It foresaw to lay off, with severance payments, more than half of the workers in the ASCU system (WB, 2001). In addition, TRY 250 trillion was made available from the budget as a credit to the ASCUs in order to increase their working capital.
The third element of ARIP comprised one-time payments to farmers to cover the cost of switching away from crops in excess supply, such as hazelnuts and tobacco, to alternative activities (net imported products). Initially, the programme intended to cover the costs of shifting from producing hazelnuts, tobacco and sugar beet to the production of oilseeds, feed crops and corn.
Participation in the scheme has been limited, and is mostly made up of tobacco farmers, as with the privatisation of TEKEL, prices are determined by a bidding mechanism.
The ARIP has been amended and extended to the end of 2008. The amendment included new sub-components such as cadastral works, rural development activities and agri-environmental policies.
The ARIP, which is restructured by the ASP, is supported by a World Bank Loan Agreement.
Projects started up in this context are: Land Consolidation, Village Based Participatory Investments Programme, Licensed Warehousing investments and the Conservation of Agricultural Lands for Environmental Purposes (ÇATAK). However, the Agricultural Strategy Paper and the 2006 Agriculture Law appeared to re-couple part of the DIS payment, and support linked to production was defined as a key instrument of agricultural policy. As a result, starting from 2005, the weight of DIS payments in total budgetary support to agriculture has decreased (from 19% of PSE in 2002 to 3% in 2008).
The share of crop-specific deficiency payments and support to livestock production has been increasing. Some concessional credit became available once again in 2004 (about USD 30.5 million in 2004), albeit under strict conditions that it should target producers aiming for higher-quality output, such as those using higher-quality livestock breeds. The new items in the policy agenda, such as the environmental protection schemes, crop insurance support and rural development projects have not been able to have an equal share of funding.