Instead of opening Lebanon’s struggling agriculture sector to lucrative export markets, free trade agreements have sent the country’s farmers into a tailspin. Imports have flooded the market, meaning farmers are now unable to sell to their domestic market.
The consequences of the EULebanon Association Agreement, signed in March 2003, have been particularly grave. Critics say farmers were unprepared for the difficulty of reaching the high standards of EU produce, and have received little support from Europe and the Lebanese government. “The various trade agreements [were] signed solely for political reasons; nothing has been done to prepare [farmers],” an agricultural engineer, speaking in a personal capacity, said.
The problem has intensified with the signing of other FTAs, like that with the European Free Trade Association (Efta). Efta members are European countries that lie outside the EU; the agreement thereby enlarges the number of Western producers now free to export their produce to Lebanon. Before these, Lebanon was a signatory to the Greater Arab Free Trade Area (Gafta) agreement, which includes Syria, Egypt, Kuwait and the UAE. Gafta, adopted in 1997 by the Arab League, was intended to create an internationally competitive Arab economic bloc. Further agreements including the Agadir Agreement, which forms a nexus of trade between Mediterranean states, are also being negotiated. The mixed success of Gafta provides a kind of template for how other FTAs can be expected to pan out: farmers who can swim with the tide of reduced government support and grow what the market wants will prosper; the rest will sink.
On the surface, the EU-Lebanon Association Agreement, ratified in February 2006, is more than fair. Free access to the EU market was granted in March 2003, while the gradual lifting of tariffs imposed by Lebanon will begin in 2008, finishing in 2025. The agreement provides for EU assistance to Lebanese farmers to ease them through the transition. Unfortunately, agricultural trade between the EU and Lebanon is not an equal fight: Lebanese farming techniques are no match for Europe’s heavily subsidized and super-efficient agribusiness: there is a ready market in Lebanon for quality European goods, but little interest in the EU for substandard Lebanese goods.
Reason to fret. Adib Saad, professor of plant pathology at American University of Beirut, says, “Small farmers are disadvantaged compared to European farmers, and Lebanon is still too fragile to be exposed to free trade due to the disorganization of the [agriculture] sector.” Some analysts have claimed that Lebanon will never benefit from access to European markets because they are not interested in Lebanese produce. “There is plenty of reason to fret,” Saad says. “Farmers have not yet upgraded their crops and are still unprepared to compete with subsidized imports. They must rehabilitate [the sector] before opening it up. Still, the agriculture sector needs cash to implement modern farming methods and enable it to compete with heavily subsidized programs, mainly in Egypt and Jordan.”
Production and labor costs are higher in Lebanon than in other Arab countries, and the government has been criticized for providing farmers with technical assistance. Farmers in other countries in the region can expect aid through subsidies and assistance with irrigation and mechanization.
Supporters of free trade agreements say FTAs will bring foreign investment to Lebanon and help the country in its bid to join the World Trade Organization. “The problem is not linked to the agreements, but lies in the slackness in improving the agriculture sector,” said Michel Akl, president of the Association of Importers, and a distributor of agricultural supplies.
Robert Moughanie, an expert in exporting to Europe, disagrees that local farmers have no market to sell to. He says European markets are hungry for quality fresh fruit and vegetables, but that protracted delays in improving produce quality have come at great cost to farmers. Even though the export agreement with the EU was implemented in 2003, not a single apple had been shipped to Europe yet, he said.
“The main barriers that hinder the export of apples to Europe are an excess of toxins [because of] the way Lebanese farmers use fertilizers and pesticides in their production,” said Moughannie. “Lebanese fruit has a unique taste if it is produced under the right conditions, mainly Bio-agriculture and sustainable agriculture. In these two types of production, pesticides and fertilizers are used in limited quantities so as not to harm the environment. The creation of two marketing boards, one for Bio agriculture – organic agriculture – and one for sustainable agriculture, will help develop the quality of Lebanese agricultural produce for export by encouraging Lebanese producers to shift to these two types of production and discouraging use of pesticides or fertilizers that does not respect international health standards,” he says.
European tastes. Antoine Howayek, head of the Association of Lebanese Farmers, says, “The European Union intended to assist farmers, but nothing has happened. Agricultural produce should conform to European tastes, so farmers will have to focus on such crop varieties as [baby] potatoes that are widely consumed by Europeans.”
A French agricultural engineer agreed that farmers will have to start producing what consumers in Europe want. “The apples are visually unacceptable and conserved under dreadful conditions, which make them unable to be exported,” he said. “In this regard, farmers have to upgrade the packaging and the look of fruits and vegetables. If this is done, a purchaser will be probably be found,” he said.
At present farmers are searching for new niche markets based on fears that they can no longer depend on their biggest export market, Arab countries, which make up 90 percent of Lebanon’s fruit and vegetable exports, mainly apples, bananas, tomatoes, potatoes and onions.
“Arab countries, our main importers, have already started producing agricultural products and elaborating an export policy,” said Akl, of the Association of Importers. “They can’t be conceived of as emerging markets anymore,” he said, citing the example of Saudi Arabia, which now competes with Lebanon. Egyptian and Syrian citrus fruit production has also expanded, and Lebanon can no longer compete on price, which is why farmers have switched from citrus to bananas, which are not yet grown in Syria or the GCC. It is estimated that 70 percent of Lebanon’s citrus groves have been converted to banana plantations.
Meanwhile, Arab countries are making it harder for Lebanon to export to them in order to protect their budding food production industries. “There has recently been a drop of foreign markets open to Lebanese agricultural exports. Export activity has declined recently because of the high protection imposed on imports from Lebanon,” Akl said. “Lebanon has lost its vital agriculture position due to the rapid growth of agricultural production in neighboring countries. Unlike Lebanon, these countries allocate a higher budget for this sector, providing more technical and financial support.”
By contrast, no financial assistance was earmarked for farmers following the summer war with Israel last year, where damage to the agriculture sector is estimated at about $280 million, according to the Food and Agriculture Organization (FAO). The FAO found that many of the estimated 200,000 farmers employed workers who earn between $300 and $500 a month, making them among Lebanon’s poorest citizens. In the depressed rural areas of Baalbek, Hermel and Akkar, where the population relies on agriculture, farmers struggle to survive. In some parts, mainly in the south, farmers suffer from water shortages, but can’t take full advantage of the abundant rainfall that falls in Lebanon because the government charges a levy for drawing river water.
Stung by criticism that it has neglected agriculture, the government has promised it will implement a plan to improve water and land management and take a greater interest in development of crops suitable for export. Criticism has also fallen on the farmers, accused of dragging their feet over adopting progressive techniques and switching to viable crops. What remains in Lebanon’s favor is the tremendous potential of its generous allotment of underutilized prime agricultural land and high rainfall. Said Saad, of the American University of Beirut: “Lebanese farmers have great potential to produce high quality produce.”
