Accounting for 15% of GDP in 2016, agriculture remains a key contributor to Morocco’s economy. The sector generates nearly 40% of employment and over 10% of exports, while the kingdom is the world’s top exporter of capers, white beans and argan oil, and is third in canned olives, and fourth in tomatoes and clementines.
Launched in 2008, the Green Morocco Plan (Plan Maroc Vert, PMV), the national agricultural policy, has played a key role in guiding sector development. The kingdom has also emerged as a key player in agricultural cooperation in Africa, thanks to the South-South Cooperation Tripartite Agreement signed with the UN’s Food and Agriculture Organisation (FAO) in 2014.
Despite successes, there is still room for improvement. In order to maximise growth potential in both domestic and foreign markets, it will be necessary to integrate the supply chain, and invest in production, marketing and distribution of higher-value-added goods. Ongoing initiatives to address this shortfall, consolidate traditional export destinations in Europe and explore new markets can contribute to these efforts.
WEATHER IMPACT: Although agricultural output has improved in recent years due to initiatives carried out under the PMV, it continues to rely on favourable weather conditions. Covering a surface area of 5.2m ha – equivalent to 60% of all domestic productive agricultural land – cereal is one of the kingdom’s main rain-fed crops and has thus fluctuated with the global climate. The cereal harvest in 2014/15, a season that saw abundant rainfall, reached 11.5m tonnes, whereas in the 2015/16 season, marked by the country’s worst drought in 30 years, it fell to 3.35m tonnes.
Although the impact on the Moroccan economy was significant, this drop was not as severe as past output falls in years of drought, thanks in part to investment in irrigation. In the 2015/16 season a 50% deficit in rainfall led to a 9% decline in sector GDP. As agricultural production contracted by 10%, according to the World Bank, overall GDP expanded at a rate of just 1.2% in 2016.
With increased rainfall in late 2016 through mid-2017, the sector performed better in the 2016/17 season: cereals production reached 9.6m tonnes. According to local media, precipitation levels rose by 51% year-on-year (y-o-y) between January and July 2017, climbing from 216 mm in the previous season to 327 mm. Nonetheless, this was lower than the average of 384.
The government also anticipated this to have a positive impact on fruit and vegetable output as a whole, and thus revised its economic growth rate estimate upward for 2017 to 4.5%, based on a cereals harvest of 7.8m tonnes. According to the High Commission for Planning (Haut Commissariat au Plan, HCP), the sector grew by 13.7% in the third quarter of 2017, a noticeable improvement over the 12.2% fall in the same period of 2016. This uptick supported the 3.8% GDP growth during the period. However, reports in late November 2017 of scarce rainfall caused concern that cereal production could face another challenging season in 2017/18.
STRATEGY: Under the PMV, which was launched in 2008 and runs until 2020, the government identified agriculture as the leading engine of economic growth. Within this timeframe, it aims to double the sector’s contribution to GDP, add 1.5m jobs, increase the sector’s export value to Dh44bn (€4bn) and make headway in the battle against poverty. The results have been satisfactory on a number of levels. Sector GDP increased by 57% between 2008 and 2015, totalling Dh115bn (€10.6bn) in 2015, according to local media. In addition, the value of agriculture and food exports has grown significantly, reaching Dh43bn (€4bn) in 2015.
The PMV’s contribution to the reduction of poverty and hunger in Morocco has been acknowledged internationally. The FAO commended the kingdom in 2015 for achieving its first Millennium Development Goal (MDG), concerning poverty and reduction of hunger, two years ahead of schedule. As reported by local media, 0.5% of the population suffered from hunger in 2013, compared with a 2015 MDG target of 2.3%, while just 0.3% lived in extreme poverty, compared with a 2015 MDG target of 1.8%.
TWO PILLARS: The PMV works through a dual approach to advance the sector. “The PMV has two pillars: the first is dedicated to the development of modern, high-added-value agriculture, while the second promotes the development of solidarity-based agriculture,” Soufiane Larguet, director of strategy and statistics at the Ministry of Agriculture, Maritime Fishing, Rural Development, Water and Forests (Ministère de l’Agriculture, de la Pêche Maritime, du Développement Rural et des Eaux et Forêts, MAPMDREF), told OBG.
The first element focuses on the creation of segment-specific trade committees composed of sector professionals. The development of agricultural segments is supported by contract programmes, which bring together state and private sector stakeholders. The private sector plays a central role in the first pillar, whereas the government is the driving force of the second. In the latter, the state is called upon to develop a series of projects, ranging from diversification to the development of niche segments. The goal is to boost farmers’ revenue and alleviate poverty with support from international partners, such as banks and micro-credit agencies, in collaboration with cooperatives, associations and non-governmental organisations.
PROJECT PROGRESS: According to local media, 869 projects, or 96.5% of the total targeted by 2020, had been carried out between 2008 and 2016 under the plan’s first pillar. Combined, they covered a surface of 503,387 ha, benefitting 293,000 farmers, for a total investment of Dh53.86bn (€5bn). Similarly, as of December 2016, 166 aggregation projects – connecting small and large-scale producers to optimise the production process and achieve economies of scale – had been initiated, of which 56 were operational. These targeted 135,000 producers, covering 342,000 ha and 320,000 livestock units, following a Dh20bn (€1.9bn) investment.
Under pillar two, 616 projects were launched by end-2016, surpassing the target of 545 by 2020. Together, they accounted for investment of Dh15bn (€1.4bn), benefitting 740,000 farmers, the majority of whom were in Tangiers-Tétouan-Al Hoceima (17%), Fez-Meknès, (14%), Marrakech-Safi (12%) or Oriental (11%).
The World Bank’s Social and Integrated Agriculture Project, which is also part of pillar two, aims to support the implementation of land and biodiversity conservation measures in projects directed at smallholder farmers in Souss Massa and Marrakech-Safi. The cost of the project is estimated at $41.98m, of which $35.54m is provided by the government, while a $6.44m grant has been provided by the Global Environment Fund. This initiative is part of wider efforts to adapt African agriculture to climate change (see analysis).
In addition, under pillar two, Morocco introduced the Terroir du Maroc, or “Local Morocco”, initiative in 2015 to increase the visibility of domestic goods among local and foreign consumers. This scheme aims to regulate the usage of the local label, boost smallholder revenue and enhance the quality of products. It comprises a wide range of local produce, such as argan, saffron, dates, olive oil, olives, honey, couscous, lavender and capers. According to the Agricultural Development Agency (Agence pour le Développement Agricole, ADA), a body established in 2008 to implement the PMV, eight labelled-product stores currently benefit eight groups representing 60 cooperatives and 2600 farmers. As of 2017 another 10 stores were planned to be opened.
Although the labelling process is still in its early stages, it provides an alternative, sustainable-development option for farmers in challenging areas of the country, as well as significant growth opportunities in foreign markets such as Germany, France, the US, Russia, Japan and the UAE (see analysis).
SEGMENT-SPECIFIC CONTRACTS: In April 2017, two segment-specific contract programmes covering the 2017-21 period were signed during the ninth Foundations of Agriculture, a yearly sector event held in Meknès. The first programme targets the development of the agri-food industry, with a budget of Dh12bn (€1.1bn), of which Dh4bn (€370.4m) will be provided by the state. The scheme plans to establish 371 industrial units, which will create 38,500 jobs, turnover of Dh42bn (€3.9bn) and value added of Dh13bn (€1.2bn).
Focusing on agricultural machinery, the second programme will upgrade farm equipment and introduce new quality standards. It includes funding of Dh11bn (€1bn), of which Dh3.8bn (€351.9m) will come from state funds. Since the launch of the PMV, the government has created 21 segment-specific programmes, including 14 existing contracts focusing on the development of vegetables and another five on livestock.
Aziz Akhannouch, the minister of agriculture, fisheries, rural development, water and forests, told local media in April 2017 that results were generally satisfactory in most segments. Some – such as date palms, rice, sugar, milk, red and white meat, citrus, and orchards – were well on their way to achieving the goals set in their respective segment-specific contract programmes. In some cases – including cereals, early fruits and legumes, and poultry and eggs – production targets had already been met.
Among early fruit and legumes, red berries have demonstrated significant potential for development, thanks to growing exports in response to increasing international demand. Although production targets have yet to be achieved, export targets have been exceeded. During the 2015/16 season Morocco produced 268,000 tonnes of red berries, of which 96,000 tonnes were exported. The segment-specific contract programme targets production of 360,000 tonnes of red berries, and 80,000 tonnes of exports by 2020.
Oil seeds, cacti, date palms, carob, citrus fruit, argan, olives and organic produce have strong growth potential if key obstacles are addressed. For example, inefficient distribution networks, inconsistent packaging, crop diseases and export market diversification must be addressed to develop citrus fruit markets (see analysis).“There is potential for development in many segments, targeting both domestic and foreign markets,” Larguet told OBG. “As production targets are gradually met across the board, it becomes increasingly important to address supply-chain challenges at other levels, such as transport, distribution and marketing.”
BOOSTING AGRI-FOOD: The signing of a segment-specific contract programme for the agri-food industry reflects a shift in government priorities. With many segments gradually meeting production targets, attention has moved towards developing value added in agricultural products through the transformation of primary inputs, and the creation of better distribution and marketing outlets. To this end, the contract focuses on incentivising investment in the creation of new production capacity, supporting the development of exports and modernising marketing circuits, especially with regard to large distribution networks.
In April 2017 Akhannouch told local media this should benefit priority agri-food products, especially biscuits, chocolates and confectionery, pasta and couscous, fruits, legumes and citrus, processed agricultural products, olive oil, milk, and red and white meats. In addition, the government has deployed a number of measures to support supply-chain integration and the development of the agri-food industry. It has done this by creating six new agricultural production sites – two of which, in Berkane and Meknes, are already operational – and by reforming slaughterhouses and wholesale markets.
At Dh116bn (€10.7bn), agri-food accounted for 30% of industrial GDP in 2016, while exports reached Dh26.6bn (€2.5bn). The industry created 143,000 jobs, or 25% of industrial employment. However, a lack of investment has stagnated growth. According to local media, higher taxes and difficulties accessing finance have created obstacles to investment. This has incited efforts to improve, especially through a segment-specific contract that created an agro-industry development fund aiming to raise Dh1bn (€92.6m) to support small and medium-sized enterprises (SMEs). In April 2017 negotiations were also under way between the government, the private sector, and local and international donors, including the African Development Bank (AfDB), to create a private equity fund to improve the competitiveness and productivity of agri-food SMEs.
The government has also sought to facilitate access to land in order to attract investment. The complex legal structure surrounding the land registry system remains a challenge for attracting investment in agriculture. As of 2016 the government made 100,000 ha of land available to private investors through public-private partnerships (PPPs). This generated Dh14bn ($1.3bn), slightly less than the target of Dh15.2bn (€1.4bn).
FINANCIAL SUPPORT: Since its launch in 2008, the PMV has secured Dh28.68bn (€2.7bn) worth of international assistance. With Dh5.29bn (€489.9m), or 18.5% of the total, allocated by the end of 2016, the World Bank was the leading provider of international funding, ahead of the AfDB with Dh3.67bn (€339.8m), Qatar with Dh2.87bn ($265.8m), the US with Dh2.8bn (€259.3m) and Saudi Arabia with Dh1.98bn (€183.3m). The EU was also a main provider of assistance, with Dh1.6bn (€148.2m), while the European Bank for Reconstruction and Development (EBRD), the European Investment Bank and EU member states – especially France, Belgium and Germany – also contributed significantly.
The Moroccan government allocated Dh7.17bn (€663.9m) to the PMV by end-2016. The financial sector played an important role, with Crédit Agricole Maroc lending Dh45bn (€4.2bn) to related initiatives over 2009-18. An estimated Dh90bn (€8.3bn) is required for the 2017-20 period, according to the MAPMDREF.
IRRIGATION: In April 2017 the MAPMDREF announced that irrigation projects were set to benefit from a series of loans and donations. The same month, the UN’s Green Climate Fund approved a €51.5m loan to support a hydro-agricultural development project in the area of Boudnib, which is connected to the Kaddoussa dam in Oued Guir, as well as the Saïss Water Conservation Project. The EBRD also offered a €120m loan for the Saïss project, while the French Development Agency provided a €41m loan to the Boudnib initiative. These projects are being developed under a PPP framework, but the government is still a key contributor. “Subsidies given by the Ministry of Agriculture amount to around €300m, 40% of which is meant for irrigation,” Simohamed Azzouz, CEO of irrigation company Magriser, told OBG. “By 2020-21 subsidy capital volumes, which mostly benefit farmers, are likely to significantly decrease, as greater levels of self-sufficiency are expected.”
Under the PMV, irrigation systems are being modernised with support from two programmes: the 10-year National Irrigation Water Saving Programme (Programme National d’Economie d’Eau en Irrigation, PNEEI) and the Irrigation Extension Programme ( Programme d’Extension de l’Irrigation, PEI). The PNEEI is set to equip 550,000 ha of land with drip irrigation systems by 2020, while the PEI aims to channel dam water to irrigate 160,000 ha, investing Dh21.5bn (€2bn) by 2020. Although irrigated agriculture accounts for 15% of cultivated areas, it comprises 45% of sector value added and 75% of exports. Thus, efficient irrigation techniques are essential, especially due to changing climates and irregular rainfall. According to the National Meteorology Department, Morocco could face a 2-6°C increase in average summer temperatures, along with a 20% average fall in precipitation by the end of the century.
FISHERIES: Thanks to the country’s 3500-km coastline, fisheries have been a significant driver of economic growth. Launched in 2009, Plan Halieutis, the fisheries development plan, sets out a number of goals to reach by 2020, including growing sector GDP to Dh21.9bn (€2bn), increasing domestic annual consumption to 16 kg per person from 9 kg in 2009, creating 115,000 direct jobs onshore, producing 1.66bn tonnes of fish and increasing the value of exports to Dh3.1bn (€287m).
The kingdom has already made notable progress. In February 2017 Akhannouch told local media that fisheries contributed Dh15bn (€1.4bn) to GDP in 2015, growing by an annual rate of 7.7% since 2007. Exports were worth Dh19.4bn (€1.8bn) in 2015, reflecting annual growth of 8% since 2010 and representing 48% of agro-industry exports. In 2016 production reached 1.46m tonnes, an annual increase of 4.4% between 2010 and 2016. In addition, 94% of the catch reportedly followed sustainable practices in 2016, compared to 5% in 2007. With 1.35m tonnes in 2015, Morocco was ranked the 17th-largest fish producer in the world – and the largest producer in Africa – by the UN FAO in its “State of the World Fisheries and Aquaculture 2016” report.
In 2015 Morocco exported 218,000 tonnes of frozen fish worth Dh8.1bn (€750.1m), 169,000 tonnes of canned and semi-canned seafood (Dh6.3bn, €583.4m), 163,000 tonnes of fish meal and fish oil (Dh2.5bn, €231.5m), 26,000 tonnes of fresh or living products (Dh2.1bn, €194.5m) and 6000 tonnes of other fishery goods (Dh500m, €46.3m). As of 2015 the kingdom exported these products to 133 countries. Europe was the leading destination, with Dh11.8bn (€1.1bn), followed by Asia (Dh3.6bn, €333.4m), sub-Saharan Africa (Dh2.4bn, €222.2m) and the US (Dh600m, €55.6m).
There is further potential for export growth. “World demand for fish meal is around 6m tonnes, but the current output is 4.8m tonnes,” Hassan Sentissi, president of the National Federation of Seafood Processing and Development Industries, told OBG. “Morocco is looking to seize this opportunity by increasing production and creating employment opportunities.”
OUTLOOK: The sector development plan has benefitted agricultural productivity and resiliency. Relatively favourable weather is promising in the short term, and numerous initiatives, such as incentives and measures to ease access to land, improve irrigation systems and contribute to segment-specific growth, are set to bolster prospects in the medium to long term.
Adding value to agricultural products remains an area for further progress. The contract programme incentivises the enhancement of production capacity, development of exports, and modernisation of marketing and distribution. The kingdom is also set to continue playing a key role in supporting growth of agricultural yields and battling the effects of climate change.