Jordan modernising agricultural sector to boost earnings

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Jordan’s development was mainly driven by irrigated agriculture in the Jordan Valley. Demand for agricultural water use in Jordan now highly exceeds the available supply. Photo – Foeme.wordpress.com

Jordan is in a strong position to leverage its competitive advantages as an agricultural producer, and the agricultural sector is becoming more modernised and export-oriented, a report published said on Thursday.

According to findings released by Oxford Business Group, the country is placing an emphasis on increasing output and quality, as well as nurturing niche areas. Jordan is facing unprecedented challenges, especially unrest in neighbouring Syria, Iraq and Egypt.

The Hashemite kingdom is an exporter of fresh produce and exported 13,761 tonnes of fruit and 204,916 tonnes of vegetables to Syria in 2011. Amman uses transit routes that run through Iraq to deliver agricultural goods to Turkey and Europe, which are important markets for its agricultural sector. The war in Syria has brought Jordanian exports to a complete halt since July, hitting Jordanian farmers really hard.

According to international press reports, Jordan’s agricultural sector has lost $30m as a result of violence in Syria and the closure of several border exits as a result.

Jordanian agriculture ministry officials are considering other options for resuming farm exports again by transporting produce to Turkey through Iraq and using the port of Aqaba on the Red Sea. Using Syrian airspace is also an option.

However, none of the options are easy to follow as they’re time consuming and expensive, but given the lure of higher winter prices in Europe, Jordan might consider the exports of peppers, cucumbers and strawberries, and bear the increased transport costs.

According to the UN’s Food and Agriculture Organisation, agriculture is a vitally important economic sector despite the country’s arable land comprising of just 1.1%. The agricultural sector contributed 4.4% of GDP in 2011, while accounting for 15.3% of export earnings. Jordan banks on a favourable climate, a geographical location at the heart of the Middle East with access to Europe, a skilled agricultural workforce, and good trading relations with a number of countries, the Oxford Business Group report underlined.

According to Anwar Haddad, the executive director at the Jordan Exporters and Producers Association for Fruit and Vegetables, the sector’s potential could be increased manifold if the growers are given modern equipment and technology, and accreditation. The ministry of agriculture has taken some right steps and has worked on increasing the number of certified agribusinesses in Jordan. The OBG report noted that the first Jordanian farm that acquired a Global Good Agricultural Practices certificate was back in 2006. The number has risen to 100 since then, it noted.

According to the central bank in Amman, the country’s increase in capacity is supporting export growth and domestic supply, with 919 registered agricultural companies propping up at the end of 2011, from 841 in 2010. Total invested capital in agriculture increased from JD100.9m ($141.99m) to JD332m ($467.19m) over the same period.

In addition to increasing exports, Jordan is seeking to diversify its export markets. An April 2011 deal with Saudi Arabia ending a 20-year ban on imports of Jordanian vegetables, the Oxford Business Group report said.

The country is also the world’s eighth-largest producer of olive oil and currently only around 7000 tonnes per year is exported, mostly to the Gulf. The government is putting emphasis on expanding the existing base of production, as well as moving up the value chain and increasing overseas sales.  The OBG study said that Jordan will inevitably require capital investment, better quality control, a more consistent output and a new emphasis on branding.

“Progress in recent years in attracting investment and raising output shows that the sector’s strengths as a value exporter to Europe and the Middle East and North Africa region are becoming more apparent, particularly in higher-value segments,” the report concluded.

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