Agriculture in Lebanon: The glimmer of hope?

From Hezbollah Secretary-General Hassan Nasrallah to filmmaker Nadine Labaki, everybody wants the Lebanese agriculture back on track. Forgotten for decades, the agricultural sector could be one of the Lebanese saving graces. Let’s see why.

lebanon agriculture
Lebanon imports 80% of its needs, whether agricultural or agro-industrial products. © David Axe

Lebanon should not avoid all the laws of gravity. As elsewhere in the world, agriculture should be the backbone for our country since it caters to the most basic human need of satiating hunger through secured food security. However, and there is always a but.

The current food crisis

In a report as mentioned in Le Commerce du Levant, the Centre de Recherche et d’Etudes Agricole Libanais (CREAL) states rather plainly that if Lebanon does not take steps to help farmers this year, its agricultural production is likely to collapse. CREAL, which collects data on the agricultural sector, has projected a production drop in agriculture to be around 40% of Lebanon’s total share in GDP.

Some crops could see a decline of 70% in value while others could see a drop of more than 50% in volume, compared to 2018 harvests. The picture becomes extremely concerning when these declines affect common food items including onions and potatoes, which incidentally are among the worst affected crops.

The steep decline in the availability of agricultural produce can be directly traced to the banking and financial sectors.

Since the end of the 1975-1990 war, local farmers, wholesalers and resellers have been living on credit, with their current cash flow financed by credits from the input of import companies, which see it as a means of guaranteeing the sale of their seeds, fertilizers and other phytosanitary products.

“Nothing has been done for the development of the food production sector. Trade has almost always been promoted through, inter alia, the signing of free trade agreements. This has been at the expense of local agricultural products, whose costs make them less competitive vis-à-vis foreign products; which are, in addition, all subsidized,” said Moussa Freiji, founder of the Tanmia group and president of the association of poultry farmers.

For a sector which had been bleeding dry, the final blow came when banks imposed a freeze on credit lines.

“Those who didn’t have a sound management of their finances will find it difficult to survive,” said Riad Saadé, director of Creal. “There will be business closures, including some of the biggest names in the sector.”

Although the debts by themselves are not himalayan compared to the humongous scale of the Lebanese economy, its just $140 million in arrears according to Creal, the fact of the matter is that since the non-repayments of debts are blocking the import of new seeds, fertilizers and other quality phytosanitary products.

“There is an urgent need to decide a moratorium on agricultural debt to allow the sector to recover. Otherwise, the catastrophe will take place in 2021,” opined Riad Saadé. “Then, we’ll really no longer have any means to recover.”

Looming food crisis

“In general, Lebanon imports 80% of its needs, whether agricultural or agro-industrial products,” said Maurice Saadé, representative of the UN Food and Agriculture Organization (FAO) in Lebanon.

Agricultural imports are in a free-fall. In December 2019, agricultural imports dropped to around 32% compared to the same period of the previous year, according to Lebanon’s customs authority. When you correlate that with the fall of Labanon’s GDP share of agriculture, the potential shortages emerges from the shadows. While some products may completely dissapear from the market in the near future, “Nobody will die of hunger in Lebanon,” said Maurice Saadé in reference to Lebanon’s well known resilience.

“Apart from the fact that agricultural prices very rarely follow inflation in the same proportions, these prices are continually subject to competition from Syrian products smuggled in their vast majority and sold to Lebanese wholesale markets,” said Riad Saadé.

This is likely to ultimately limit consumer price inflation and potentially even offer a way out for some in the agro-industrial businesses, which could source some of their raw materials from Syria.

While Lebanon’s agriculture industry has taken a major beating, its agro-industry is in much better shape since a majority of them continue to have access to foreign currencies to pay their foreign suppliers. This is particularly true for the poultry sector, which is being able to continue its import of poultry feed by securing foreign currency from moneychangers. This however comes at a cost since it “means a rise in our costs of about 20%, which has been reflected on our selling prices,” said Moussa Freiji.

For Lebanon, the real danger may not stem entirely from food shortages but from its socio-economic impact given that its affects 250,000 to 300,000 households who depend, in whole or in part, on agriculture. “Agriculture and agro-industry account for 25% of private jobs,” said Maurice Saadé.

“Developing this sector could offer great employment potential,” said Serge Zamora, a Lebanese economist and senior analytical consultant. “This potential is not restricted to people cultivating the lands and taking care of the livestock; but also ensures vacancies to people working in processing, marketing, packaging, and transport.”

With a surge in the prices of basic commodities in supermarket prices midst challenging living conditions in Lebanon, many have resorted to growing crops for themselves. The situation faced by the Lebanese people is indeed very challenging.

While the Lebanese government has established a Food Security Committee, in practicality it has yet to meet even once. In fact, the ministry saw its budget cut by 11.4% this year to $50 million.

The decline in funding is mainly bearing on the too few subsidies that the ministry has so far granted to small farmers. “Yet, the crisis may be an opportunity,” said Moussa Freiji.

“Within three or four years, this may create a different dynamic,” added Maurice Saadé. “The number of farms may decrease, but those which would survive should become more efficient”.

According to experts, this is wishful thinking, with the “message of hope” aimed at encouraging players in the agriculture sector to hold on despite existing challenges.

A glimmer of hope

Despite the neglect of the agricultural sector by previous governments, the sector has potential for development and various opportunities due to the country’s arable lands, moderate climate, and freshwater resources.

With the parliament passing legislation in April 2020 legalizing the planting of cannabis for industrial and medical purposes, there is a glimmer of hope for the agricultural sector. According to  American consultancy firm McKinsey & Co., the legalization of cannabis cultivation could spawn up to $1 billion per year in government returns.

Since agriculture has large environmental footprint, it is crucial that sustainable agriculture practices be followed without compromising the ability of future generations to meet their basic food requirement. To this end, initiatives and programs, including “Zari’et Albi” which encourages local communities to grow their own food on rooftops, balconies and backyards, should be wholeheartedly supported and replicated.

If many Lebanese resorts to growing crops for themselves, it could not only ensure self-sufficiency but also soften the need to import food, especially the ones that can be produced locally, such as fruits, cereals, vegetables, dairy products and industrial crops. Not only will this stabilize the local economy, it limit the outflow of foreign currencies.

Aquaculture is another ray of hope, which could improve food security, provide social opportunities, provide job opportunities for women and the youth. For 90% of its seafood requirements, Lebanon depends on imports from Turkey, Egypt, Vietnam, and Thailand, buying around 35,000 metric tons (MT) of fish and shellfish such as sea bass, sea bream, red mullet, tilapia, shrimp, and tuna.

Domestic production of seafood is negligible, with just 4,000 MT coming from fisheries and 1,200 MT from inland aquaculture.

To support the sustainable development of aquaculture, the government has partnered with the General Fisheries Commission of the Mediterranean (GFCM) of the Food and Agriculture Organization of the United Nations (FAO).

“We are proud of our strengthened collaboration with FAO and the GFCM. Increasing the supply of fishery products and knowledge of the value chain, will improve the quality of life, create employment, and promote food security,”said Lebanese Minster of Agriculture Abbas Mortada.

“The FAO in general, and the GFCM in particular, have always been dedicated to building the necessary capacities for Lebanon to achieve the 2030 Development Agenda and Sustainable Development Goals. Among the most important of these is SDG 2, aimed at ending hunger, providing food security and improved nutrition, and promoting sustainable agriculture, whether on land or in the water,” said GFCM Executive Secretary Abdellah Srour.

Support from the European Union

In an effort to help the people of Lebanon towards food security, the European Union launched a project aimed at promoting sustainable agricultural development. Towards this end, it has outlined a plan aimed at developing agricultural productivity to boost the income of local farmers. The project will provide short-term jobs to 100,320 person and increase the income and livelihood of 2,170 vulnerable families.

The EU has allocated $25,255,192 towards this project in its budget which will be handled by the United Nation’s FAO, in partnership with IFAD and WFP, in collaboration with the Agriculture Ministries of Lebanon and Jordan. The program is expected to last until September 2022.

Furthermore, the EU has also recently announced a donation of $35 million for supporting Palestinian refugees in Lebanon, who are living in abject living conditions which has been further exacerbated by the coronavirus-induced COVID-19 pandemic.