THE « GREEN MOROCCO · ¾The share of food imports in total imports has come up from 7.3% in 2006...

THE « GREEN MOROCCO »

Agricultural Development Strategy

“Facing rising food prices”

Mohamed AIT KADIPrésident of the General Council of

Agricultural Development, MAPM, Morocco

Montreal, September 2008

Outline

1.Impacts & Mitigation measures2.The new Agricultural Development Strategy:

« Green Morocco »

Outline

1. Impacts & Mitigation measures2.2. The new Agricultural The new Agricultural DevelopmentDevelopment StrategyStrategy: :

«« Green Green MoroccoMorocco »»

Sujets de discussionPrésentez les principales idées que vous allez développer

With its heavy dependence on imports of wheat, maize, oilseeds and energy for domestic consumption Morocco has been severely hit by rising world food and oil prices. This has raised serious concerns about food security, macroeconomic and social stability

1 Impacts and mitigation measures

Increase of 72% in aggregate food import bills (2006/2007)

Food import bill in 2007 was over twice what itcosted in 2003

FOOD BILLS INCREASES (% 2006/07)

-40

-20

0

20

40

60

80

100

120

140

160

180

Grains Sugar Dairy Oil (veg.) Oil seeds Others Total

P

FOOD IMPORTS (MDH)

7000

12000

17000

22000

27000

32000

2003 2004 2005 2006 2007


Increase of 72% in aggregate food import bills (2006/2007)

WHEAT IMPORTS

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

2003 2004 2005 2006 2007

Quantity (1000T)

Value (MDH)

Average Unit Price

1500

1700

1900

2100

2300

2500

2700

2003 2004 2005 2006 2007

DH/T

onne

Average Unit Price

WHEAT IMPORTS ORIGINS: VALUE (MDH)

0

500

1000

1500

2000

2500

3000

USA France CANADA GERMANY RUSSIA KAZAKHSTAN OTHERS

200520062007

WHEAT IMPORTS ORIGINS: QUANTITY (1000T)

0

200

400

600

800

1000

1200

1400

USA France CANADA GERMANY RUSSIA KAZAKHSTAN OTHERS

2005

2006

2007

WHEAT


Increase of 72% in aggregate food import bills (2006/2007)CORN IMPORTS

0

500

1000

1500

2000

2500

3000

3500

4000

2003 2004 2005 2006 2007

Quantity (1000T)Value (MDH)

Average Unit Price

1250

1350

1450

1550

1650

1750

1850

1950

2050

2003 2004 2005 2006 2007

DH

/T Average Unit Price

BARLEY IMPORTS

0

200

400

600

800

1000

1200

1400

2003 2004 2005 2006 2007

Quantity (1000T)Value (MDH)

Average Unit Price

1300

1400

1500

1600

1700

1800

1900

2000

2100

2200

2300

2003 2004 2005 2006 2007

DH

/T Average Unit Price


The share of food imports in total imports has come up from 7.3% in 2006 to 10.3% in 2007.

The rate of coverage of foodimports by exports declinedsubstantially in one yeardropping from 137% to 83%

The trade deficit grew by 40.8% and represented nearly23% of GDP

The current account showed, for the first time in 6 years, a deficit of about 0.1% in GDP

FOOD EXPORTS/FOOD IMPORTS

60

80

100

120

140

160

180

2003 2004 2005 2006 2007

FOOD IMPORTS/TOTAL IMPORTS (%)

6

6,5

7

7,5

8

8,5

9

9,5

10

10,5

11

2003 2004 2005 2006 2007


The inflationary effect of the rise in staple foodand oil prices in 2007 was mitigated by a numberof measures taken by the Government:

1.Freezing the mechanism of fuel prices indexation to oil price on internatinal markets;

2.Reducing/Suspending import duties on somestaple food (soft wheat, durum wheat, barley, UHT milk, powder milk and butter)


SUBDIZATION FUND EXPENDITURES (MDH)

-5000

0

5000

10000

15000

20000

25000

30000

35000

40000

2002 2003 2004 2005 2006 2007 2008

MDH

TotalOil productsFood products

Small farmers benefit more from such price increase, while poor consumers hurt(% change from the base year under the scenario without

any policy intervention) 9.4 9.1

3.0

-1.6-0.6

-5.5-4.5

-6

-4

-2

0

2

4

6

8

10

Income

Total food consumption

Grain consumption

Urban poor

Rural poor

Urban poor

Rural poor

Small farmer

Medium farmer

Large farmer

Source: New Morocco CGE model results

Import subsidy compensates the poor consumers but the small farmers lost the gains from the price increase

(% change due to import subsidy from the price rise scenario)

-8.3 -8.2

-2.7

1.60.7

5.84.7

-9

-7

-5

-3

-1

1

3

5Income


Grain consumption

Urban poor

Rural poor

Urban poor

Rural poor

Small farmer

Medium farmer

Large farmer

Subsidy equivalent to 7.5% of total government budget

Source: New Morocco CGE model results

Targeting the poor consumers through direct transfer benefits both

(% change due to the direct transfer from the price rise scenario)

1.0 0.8 0.6

6.8

4.8

6.1

4.6

0

1

2

3

4

5

6

7

Income


Grain consumption

Urban poor

Rural poor

Urban poor

Rural poor

Small farmer

Medium farmer

Large farmer

Direct transfer equivalent to 7.5% of total government budget

Outline

1. Impacts & Mitigation measures2.2. TheThe new Agricultural new Agricultural DevelopmentDevelopment StrategyStrategy: :

«« Green Green MoroccoMorocco »»

2 « The Green Morocco »Moroccan agriculture socio-economic stakes

2 « The Green Morocco »

20

2 Reform strategy built around 2 Pillars« The Green Morocco »

L'agriculture comme moteur majeur de développement économique et social

Refonte du cadre sectoriel et amélioration des facteurs transversaux

Pilier II

Mise à niveau solidaire:

Investissement social et lutte contre la pauvreté agricole

Pilier I

Développement d’une agriculture moderne:

Investissement industriel à haute productivité/ valeur ajoutéeApproche transactionnelle

autour de projets concretsApproche transactionnelle autour de projets concrets

Foncier Eau ALE Marchénational

Doing business

Interprofessionnelles

RefocalisationMinistère

2 « The Green Morocco »

2 CONCLUSIONPolicy actions to adapt and mitigate food price problem

1.National policies in Developing Countries1. Increase investment in agriculture, rural infrastructure and market access

for farmers

2. Expand social protection (rural and urban) for the poorest

2. Global policies and Development Aid• Eliminate agricultural trade barriers, incl. stop biofuels subsidies

• Expand aid to agriculture and rural services

• Increase support to science and technology and facilitate technologytransfer

• Expand food development aid incl. social protection, child nutrition

THE « GREEN MOROCCO · ¾The share of food imports in total imports has come up from 7.3% in 2006...

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