Agriculture remains a critical sector for the Moroccan economy. Given its major role in providing employment and disposable income, agriculture can impact the country’s annual GDP growth rates in a way that few other sectors can. The past decade has seen the implementation of the Green Morocco Plan (Plan Maroc Vert, PMV), which was launched in 2008 to increase agricultural output, make the sector more competitive and increase its resilience to the threats posed by climate change.
The PMV, along with an improvement of Morocco’s overall trade performance, has helped the sector progress with higher volumes of output and exports. However, water scarcity and desertification have become challenges to agricultural activity in many regions of the country. In addition, the prevalence of small-scale farming operations has made it difficult for certain segments of the farming population to modernise agricultural practices and expand.
Other aspects of the sector have seen palpable improvement. Irrigated land has increased significantly since the launch of the PMV. The sector has continued to attract foreign and domestic investment, and increase the amount of value added for the processing of agricultural goods. Cooperatives have made a deep impact on value chains and employment, and emerging product segments based on the country’s competitive advantages are showing potential to become valuable avenues for growth. More broadly, the development of the sector remains linked with overarching government goals of reducing rural migration into the kingdom’s cities through the improvement of socio-economic conditions across various agricultural regions.
Agriculture accounts for 13% of total GDP, according to mid-2019 government figures. Its socio-economic impact, however, is much larger, as it provides about 38% of national employment and nearly 74% of jobs in rural areas.
“Despite the PMV, which set out to reduce the volatility of agricultural activity, variations in our yearly economic growth rates showcase that Morocco is still very dependent on the sector,” Souhail Chalabi, deputy director-general at BMCE Capital, told OBG. “We have still not been able to make the agricultural sector less dependent on the weather.”
This vulnerability is largely based on the country’s significant production of cereals, which occupied 59% of Morocco’s agricultural land as of mid-2019. Since most cereal production areas depend on rainfall, annual GDP growth rates vary significantly. A 2019 study from the Ministry of Economy and Finance showed that between 2008 and 2018, Morocco’s annual cereal production could either push annual GDP growth up by 1.7% or reduce it by 1.6%.
In 2008 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) launched the PMV. The plan deployed substantial public resources and mobilised private investment to make the agricultural sector more competitive, as well as increase its value-added through agro-industrial activities. It also aimed to support agricultural incomes and enhance the productivity of smaller-scale farmers.
The plan achieved most of its stated goals and increased the overall value of the agricultural sector. It did this largely through the development of several traditional Moroccan crops and regional products, better promotion and marketing, and the improvement of integrated supply chains that rely on aggregation and industrial processing. Furthermore, the strategy introduced a number of better management practices for water resources by subsidising the expansion of drip-irrigation infrastructure.
The improvement of production and export values was notable over the implementation period of the PMV, especially for certain high-value segments of agricultural output. Olive production, for instance, expanded by an annual average of 7.4% during the 2008-18 period, while citrus production and red meat production rose by 6.3% and 4.8% on average, respectively.
Higher production volumes drove exports up from Dh39bn ($4.1bn) in 2014 to Dh54.9bn ($5.7bn) over the first 11 months of 2018, according to the Office des Changes, which oversees the country’s foreign exchanges. Exports of fresh, dried and frozen fruits increased by a yearly average of 13.5% over the 2008-18 period. Frozen and fresh vegetable exports expanded by 8.5% yearly over the same period, and fresh tomato exports rose by approximately 5.6%. The plan helped to increase the role of high-value export-oriented crops, such citrus and other tree crops, as well as horticulture, mostly by expanding cultivated areas. Under the PMV, an additional 400,000 ha of fruit and olive trees were planted, according to figures from the World Bank.
As in a number of other sectors, the EU remains a key partner, purchasing roughly 60% of Morocco’s agricultural exports as of October 2019. For example, France and Spain alone bought over 73% of Morocco’s fresh tomato exports in 2018. The same year, Spain, Italy and Portugal accounted for around 86% of the kingdom’s shellfish exports.
These developments helped enlarge the sector’s overall value. Before the start of the PMV, the annual growth of the agricultural sector’s value added averaged 2.2% during the eight years between 1999 and 2007. At the same time, non-agricultural value added and GDP growth rates stood at 4.7% and 4.2%, respectively, according to figures from the Ministry of Economy and Finance. This tendency reversed following the implementation of the PMV, which boosted annual growth rates for agricultural value added to an average of 6.9% over the 2008-18 period, compared to an average 3.8% rate for annual GDP growth and 3.2% for non-agricultural value-added growth during the same time.
The dependence of the sector’s value added on weather patterns has started to be somewhat mitigated, due to the reduction of the relative weight of cereal production in the overall structure of the sector. In a mid-2019 report, the Ministry of Economy and Finance estimated that while an 81% decrease in cereal production caused by drought lowered the sector’s value added by 41% in 1995, a similar drought-driven decrease of 71% in 2016 only shrank agricultural value added by 13.7%.
A key goal of the PMV was to boost private and public investment volumes. To do this, the authorities introduced new support measures, such as backing agricultural goods to facilitate higher productivity and added value in order to capture export markets. The government provided a greater focus on large-scale agriculture infrastructure development, while also encouraging private investment through subsidies allocated by the country’s Agricultural Development Fund.
From 2008 to 2017, the state’s overall investment in the sector expanded from Dh3.5bn ($364.6m) to Dh9.5bn ($989.7m) annually. Of this, annual state support to encourage private investment rose from Dh1bn ($104.2m) to Dh3.2bn ($333.4m) over the same period. By 2017 the percentage of government expenditure allocated to the encouragement of private investment in the sector had reached 34% of annual government spending on agriculture, up from 29% at the start of the programme.
By increasing the amount of financing going towards the support of private investment, the authorities were able to trigger Dh56bn ($5.8bn) of private investment into the sector for the 2008-17 period, at an annual average of Dh6bn ($625.1m). Support for private investment had key long-term benefits for the sector. As much as 47% of investment support financed by the Agricultural Development Fund went to establishing irrigation systems and land structuring, while 21% was allocated to helping producers increase mechanisation.
The plan’s execution also benefitted from international support. The World Bank provided several financing initiatives, including $400m in loans during the 2011-14 period to improve wholesale markets and slaughterhouses, and set up food safety management mechanisms, and $220m in investment operations for irrigation projects. The World Bank’s Global Environment Facility provided $10m in grants to support climate change adaptability and land conservation efforts. Further multilateral support was secured in 2015 with the provision of $132m in financing from the African Development Bank to help fund the PMV, following an initial €105m from the institution.
In 2014 the authorities performed a review of the PMV’s implementation up to that point. The report yielded several recommendations for the rest of the plan’s execution, including a stronger emphasis on the backing of investment in food-processing activities and market diversification, speedy implementation of reforms regarding the domestic market and improved food safety regulations.
Cereal production remains a key segment of the country’s agriculture sector, with wheat and barley as the main crops. Although the area allocated to cereal production has been reduced over the years, cereal output is still an essential measure of the sector’s performance. The 2019 cereal crop harvest results amounted to 2.7m tonnes of common wheat, 1.3m tonnes of durum wheat and 1.2m tonnes of barley. This represented a decrease of 49% compared to cereal output during the previous harvest, leading the authorities to issue tenders to US and EU suppliers to import roughly 3.7m tonnes of cereals before the end of 2019.
The annual production of citrus fruits such as tangerines, oranges, lemons and limes is also an important asset for the sector. The majority of the country’s citrus output is consumed locally. Out of a total production of 2.6m tonnes in the 2018/19 season, only 792,000 tonnes were exported, according to figures by the US Department of Agriculture (USDA). However, irregular weather patterns in 2019, which brought hotter than expected conditions in some citrus-producing areas in the south of the kingdom, were forecast to cause citrus production to fall by 32% in the 2019/20 season, to around 1.7m tonnes. Heat stress affected various citrus crops at blossoming times throughout the season. Lemon and lime production was expected to decline by 11% to 40,000 tonnes. Mandarin and tangerine output was expected to settle at 910,000 tonnes for the 2019/20 season, a 34% decline relative to the 2018/19 season.
Citrus remains a major export segment. Besides the key markets of the EU, a handful of other countries are becoming increasingly important export markets. For instance, mandarin and tangerine exports to Russia increased by 64% in the 2018/19 season, reaching 337,290 tonnes, while Russian imports of Moroccan lemons and limes rose by 39%. Meanwhile, exports of oranges to Canada increased by 25% that same season, reaching 10,511 tonnes, while lemon and lime exports grew by 43%.
Because of its importance to domestic and foreign markets, the citrus segment benefits from significant subsidies and support programmes. For instance, new citrus plantations get a subsidy of $1145 per ha, which helps add drip irrigation systems. Farmers building citrus conditioning areas can also get a 30% subsidy on the cost of construction.
Olives are another important segment for Moroccan agriculture, though its full potential has yet to be reached. At the start of the PMV, the government had set the goal to establish over 1.2m ha of olive plantations and to reach an annual production of 2.5m tonnes. A programme contract signed between the state and segment stakeholders for the 2009-20 period has underwritten production and processing-capacity increases for the segment. The authorities are aiming to boost the exports of olive oil to 120,000 tonnes and table olives to 150,000 tonnes by 2020. However, during the 2018/19 season, Morocco only exported 34,000 tonnes of olive oil and roughly 77,500 tonnes of table olives.
The programme has nonetheless achieved some improvements, mostly on the production side. Between 2009 and 2018 plantations rose to 1.04m ha, a 35% increase, while processing capacity improved over the same period, going from 700,000 tonnes to 1.7m tonnes per year, or 70% of the objective set out by the authorities. Competition from other olive oil-producing countries such as Tunisia, Spain, Italy and Portugal will require the kingdom’s oleiculture segment to increase its integration and processing capabilities and enhance quality controls in order to capture a bigger share of international olive oil markets. Current government support mechanisms include a 10% subsidy on investment costs for olive processing and bottling facilities.
The production of sugar is one of the most critical segments of the kingdom’s agro-industrial capacity. Cosumar, the country’s only sugar refinery, remains Morocco’s largest agro-industrial player. In 2018 the company produced 5m tonnes of sugar producing-plants, namely beetroot and sugar cane, over an area of 80,000 ha, posting a turnover of Dh7.6bn ($791.8m). The firm’s activities include the aggregation of 80,000 growers.
Installed capacity at Cosumar is currently at 1.65m tonnes of refined sugar, but this is significantly over annual domestic consumption levels, which were at 1.2m tonnes in 2018. The company exports sugar to 44 countries and is expanding operations abroad. For example, it is building a sugar refinery in the northwest of Saudi Arabia with a production capacity of 840,000 tonnes, as well as a sugar conditioning unit in Guinea with a capacity of 50,00 tonnes, in partnership with local light manufacturer Sogecile. Much of the sector’s initial development arose out of favourable conditions at home. Indeed, sugar consumption levels remain high in the kingdom, with an annual average of 35 kg per person in 2018.
A big focus of Morocco’s agriculture policy in recent years has been the creation of production clusters across the kingdom, with the aim of allowing farmers to share production, distribution and marketing methods in order to improve their competitiveness. This has not only made the sector more productive overall, but it has also permitted smaller growers to be effectively integrated into larger value chains.
Clustering has been especially important for Morocco, as the majority of the country’s farmers command small plots of land. “The average size of plots is less than 2 ha, which makes it difficult to develop economically thriving agriculture,” Faouzi Bekkaoui, director of the National Institute for Agricultural Research of Morocco, told OBG.
On a smaller scale, agricultural cooperatives, which enable the integration of smaller and often artisanal producers into larger production chains and provide easier access to international markets, have flourished under the PMV’s implementation. Cooperatives are increasingly seen by policymakers as a way to reduce rural poverty and create employment opportunities. As of 2015 there were about 11,000 agricultural cooperatives in Morocco, according to the UN Food and Agriculture Organisation. The simplification of their legal status in 2014 also made it easier and cheaper for farmers to develop new horizontal partnerships. This has helped the development of cooperatives for milk production, olives and olive oil, dates, fruit, honey and argan oil, among other products. “The cooperatives have been assisted by government policy, which has contributed to them becoming more resilient and diversified. Many of them started with the production of argan oil and have now moved on to cactus products and others segments,” Bekkaoui told OBG.
The sector’s most valuable processing activities are taking place on a larger scale. The agro-industrial segment is made up of nearly 2080 companies and employs more than 143,000 people, according to 2018 figures from the USDA. That year, agro-processing was worth $19.4bn, with 70% of the market accounted for by retail distribution and the remaining 30% by the food industry. The segment mobilised around $2.8bn in imports of food-processing ingredients in 2018.
In 2017 the Moroccan government signed a programme contract with agro-industrial stakeholders, which involved investment commitments of up to Dh12bn ($1.2bn) over the 2017-21 period. The majority of the investment is set to be committed by the private sector, at Dh8bn ($833.4m), with the MAPMDREF and the Ministry of Industry, Investment, Trade and the Digital Economy contributing an additional Dh2.8bn ($291.7m) and Dh1.8bn ($187.5m), respectively. The deal is set to accelerate sector growth and allow for the creation of an additional 38,000 jobs across the segment by 2021. One key aspect will be the expansion of conditioning, transformation and distribution networks for operators.
Another objective is boosting the volume of agro-industrial exports, which the authorities expect to grow by an additional Dh13bn ($1.4bn) annually by 2021. As a point of reference, from Dh29.3bn ($3bn) in 2010, agri-food exports rose by 96% through to 2018, reaching Dh57.3bn ($6bn), or 21% of total exports that year. As of late 2019 the project created by both ministries had already led to an investment of approximately Dh5.1bn ($531.3m) across 194 related agro-industrial projects, achieving 43% of the 2021 investment targets and 65% of the objectives in terms of job creation, according to local media.
As a mechanism to link small producers with large agro-industrial players, the World Bank provided $200m towards the Strengthening Agri-Food Value Chains Programme. The programme, which will run until late 2022, is focused on improving the competitiveness of small and medium-sized agricultural processors, integrating them into larger value chains.
Processing has also become more relevant for maritime resources. Fishing, which is overseen by the Department of Maritime Fisheries within the MAPMDREF, has grown both in terms of its impact on national growth and employment figures. The government’s Halieutis Plan, which focuses on the development of fisheries over the 2009-20 period, has galvanised economic activity. “The Halieutis Plan has implemented a positive dynamic in the fisheries sector through sustainable management of sea resources. It has also increased processing and value-added activities, and established a development framework for aquaculture,” Younes Ayouch, director of strategy and cooperation at the Department of Maritime Fisheries, told OBG.
Production volumes rose by 20% between 2010 and 2018, reaching 1.4m tonnes, and the sector directly employs approximately 98,000 people in processing and associated activities. The sector’s value increased from Dh6.7bn ($698m) to Dh11.6bn ($1.2bn) over the same period, while exports of fish and seafood reached $2.4bn in 2018.
“The fisheries sector is already equipped with the right infrastructure and benefits from an automated, digitalised system that guarantees transparency. It is now time to diversify the sector, develop the processing segment and bring more added value to the economy,” Amina Figuigui, managing director of the National Fisheries Office, told OBG.
A new sector development plan, which is scheduled to cover the decade from 2020 to 2030, was being drafted as of early 2020. The authorities expect to put more emphasis on the ongoing expansion of aquaculture by channelling investment into new aquaculture farms (see analysis).
Morocco is particularly exposed to the effects of droughts and water stress, a vulnerability that has been showcased several times, as in the 2015/2016 season when national GDP growth was cut by around 1.5% because of the severe drought that affected the kingdom in 2015, according to the World Bank.
“Access to irrigation water remains one of the most prominent challenges for Moroccan agriculture. In order to address the situation in the long run without driving up the country’s energy bill, Morocco will have to increase the use of drip irrigation systems, as well as wastewater treatment,” Youssef Moamah, CEO of irrigation solutions firm CMGP, told OBG.
At the moment, around 20% of Morocco’s agricultural land is irrigated, with the remainder not supported by irrigation systems. Consequently, years with insufficient rainfall have a significant impact on agricultural output, as around 60% of agricultural production comes from the 20% of territory that benefits from irrigation, according to Bekkaoui.
Irrigated lands are an essential component of the sector’s output. According to figures by the MAPMDREF, irrigation accounts for 99% of sugar production, 82% of vegetable output, 100% of citrus production as well as 75% of milk production. The PMV has worked to not only increase irrigated areas, but, when possible, substitute traditional irrigation systems for drip irrigation through the National Programme for Water Savings in Irrigation, which has operated with a budget of Dh9.5bn ($989.7m). As of early 2020 as much as 585,000 ha had been equipped with drip irrigation systems across Morocco, facilitating 1.6bn cu metres of annual savings in water consumption as of 2018. “Water economy has been identified as a government priority, and subsidies from 80% to 100% are offered to farmers investing in drip-irrigation systems,” Marouane Benmouama, head of North-west Africa at irrigations solutions specialist Netafim.
However, the expansion of irrigation infrastructure has led to new challenges, including the lack of adequate training in equipment operation, leaving the country without the necessary workforce to support the increase in irrigated territory. “While the state has heavily subsidised the acquisition of irrigation material, there is still a lot of work to be done on the training side, as we often notice misuse of the equipment by farmers,” Simohamed Azzouz, managing director at Magriser, told OBG.
Irrigated land is set to continue surging in the coming years. Through to 2027 the MAPMDREF aims to increase the area covered by drip irrigation systems to 940,000 ha, which, if achieved, will allow annual water savings to hit 2.5bn cu metres.
Morocco’s agriculture sector has grown exponentially since the implementation of the PMV in 2008, and the overall positive trend is likely to continue. Growth has materialised through better agricultural output and higher export volumes for some of the country’s strategic crops. This expansion has been very positive for the Moroccan economy as well as for those whose jobs depend on agriculture.
The overall positive impact of the PMV has nonetheless brought new challenges. Although agricultural production was raised significantly, the slow establishment of adequate refrigeration space and transport networks to carry produce to market in a timely manner has led to instances of spoilage. Mechanisation levels have improved, but many smallscale farming operations continue to face obstacles to finance their equipment needs.
Mitigating the effects of climate change will also determine the future of agriculture in Morocco. Although government measures have helped align water-saving measures with sector practices, water management will be increasingly critical as higher temperatures become the norm and population growth puts further pressure on hydraulic resources.