Growth opportunities: There are plans to increase the value and volume of agricultural output

Agriculture has always been a major component of the local economy in the Oriental region, historically vying with mining as one of the main revenue earners. However, like several other regions in Morocco, the Oriental has struggled to capture a larger part of the value of local production, often depending on raw exports or subsistence-level farming. A total of 77 projects were designated for the region under the national agricultural development strategy, the Green Morocco Plan (Plan Maroc Vert, PMV), which aims to optimise production, modernise the sector and increase value added. Regional authorities have highlighted several focus points necessary to encourage a sustainable increase in local production, as well as to move the region up the value chain, creating jobs and raising incomes.

PRIORITIES: The establishment of an agro-industrial park, the Berkane Agropole, in the region’s main agricultural province will boost value-added output while also lowering costs. This will be achieved by providing access to improved transport and logistics networks; packaging and conditioning services; and offering proximity to research and development facilities. Production costs can be particularly high in the east, given the higher cost of transport and lack of major container ports in the region. The agropole stands to raise sector employment and export revenue targets, provided that it attracts a diverse slate of projects, as planned.

Another regional priority under the PMV is to encourage aggregation. According to the Regional Agriculture Department (Direction Régionale de l’Agriculture, DRA), 63% of agricultural operations in the Oriental operate on 5 ha or less. Efforts to form farming collectives are beginning to bear fruit, particularly with regard to citrus, olive and date production. Also, as elsewhere in Morocco, PMV projects are working to introduce improved techniques, including mechanisation and more resource-efficient localised irrigation. The government offers a nationwide set of incentives for farming collectives that subsidises equipment acquisition and installation. In recent years, this has helped to expand the irrigated surface area to 107,334 ha, or 14.6% of the region’s utilised agricultural land.

The PMV and the regional development strategy aim to boost the agricultural sector’s contribution to GDP from €382m in 2012 to €537m by 2020. Ongoing programmes to encourage aggregation and resource efficiency should help the sector to reach its targets. The region’s weight in terms of national output is expected to increase as projects implemented under the PMV begin to enter production in 2014-15.

CITRUS FRUIT: Citrus fruit production plays a key role in the economic and social fabric of the region, particularly in terms of employment and sector revenue. The Oriental produced 254,000 tonnes of citrus in 2013. Local actors estimate that the citrus sector generates 2m workdays per year. Development of citrus is a key objective under the first pillar of the PMV; products such as oranges, clementines and processed goods like juice are high-value exports for the country. Several PMV projects have already been implemented in the Berkane province in order to increase the planted area and encourage aggregation. According to the Berkanebased agro-industrial group Kantari, citrus plantations have been expanded over recent years, and now cover 4000 ha, including some 288 individual producers.

Whereas many farming collectives in the Oriental region have yet to form a strong presence in foreign markets, the citrus segment has well-established export channels. As such, efforts to scale up production and expand into more value-added products stand to boost sector revenue considerably. The vast majority of agro-industrial citrus production is exported from the port of Nador to North America, Eastern Europe and Russia, or in containers from Casablanca to Europe.

Mohammed Ramdani, commercial director at Kantari, told OBG, “Moroccan citrus exports are going through a difficult period in 2013-14. Production has expanded under the PMV, but citrus exports are facing competition in foreign markets from producers such as Egypt, Turkey and Spain. Consumption in Europe has declined in recent years as a result of the economic crisis, so competition is likely to be tough in the near term. A better organisation of the profession and investigation of new markets are among the actions that may boost citrus exports.” With greater marketing efforts, the US, Eastern Europe and even the African continent could be interesting export markets in the future.

THE ORIENTAL BRAND: Most other products are sold from farm collectives via local distribution channels and then commercialised domestically or exported through other regions. However, the Oriental region, particularly the province of Berkane, is working to establish an international reputation for local products, and it stands to take a lesson from the success of citrus tivation. Berkane clementines obtained EU Protected Geographical Indication status in 2010, and are well known on international markets. Jamal Mimouni, the outgoing communications director of the Oriental DRA, culexplained, “Several products from the Oriental region, particularly dates and olives, are of superior quality and could succeed in foreign markets. Yet the marketing is largely insufficient. The DRA has worked in recent years to distribute branded packaging in an effort to make a name for these products internationally.”

OLIVES: The Oriental also has a natural advantage in the olive segment. Over 85% of the region’s cultivated land is located in the semi-arid Bour area, which is well adapted to olive cultivation. As of 2013, olive plantations covered a total of 83,369 ha, the second-largest crop by surface area after cereals; a total of 123,000 tonnes were produced in 2013, accounting for 5% of national production. According to the DRA, another 21,000 ha of olive trees were planted between 2009 and 2012, which should increase regional output once they fully enter production in the next two years. Mimouni told OBG, “Serious efforts have been made to encourage aggregation and increase the planted surface area for key crops such as olives, citrus and dates. In the next season, we will begin to see the impact of these projects on regional agricultural output.”

The region also produces 3-5% of national output of orchard fruit, excluding citrus, and vegetables such as tomatoes, courgettes and onions. Industrial sugar beet plantations produced 198,000 tonnes in 2013. The largest segment of agricultural land, at 390,000 ha, is dedicated to cereals. The region produced 195,000 tonnes of cereals in 2013. Most of local production is purchased by flour mills in the Oriental; however, local production is not sufficient to meet demand, as is the case throughout Morocco, and mills supplement this with imported flour from Europe, Russia and the US.

The local government is also working to support activity outside the main agricultural provinces of Berkane and Nador, in an effort to create revenue-generating activity throughout the region and slow rural-urban migration. For example, a €20.2m project was included under the PMV to scale up date palm production in the oasis of Figuig, in the arid south. The programme focused on preserving the province’s palm groves, introducing new water basins and installing resource-efficient drip irrigation systems. This provides an important source of value-added activity for Figuig residents and dovetails with measures to improve transport connections, tourism competitiveness and living standards in this under-served Oriental province.

ROAD TO MARKET: Improved transport infrastructure in the region has helped to open up new avenues. In particular, the Fez-Oujda motorway, the coastal Rocade Méditerranée connecting Nador to Tangiers and other north-western cities, and the railway from Taourirt to Nador have helped bring products to port at a much lower cost. Yet the region still faces obstacles that keep transport costs above those in other regions. Petrol prices remain higher in the east, since it must be shipped in from elsewhere; the ready supply of cheap Algerian petrol on the market has been cut as efforts to enforce border controls have intensified in recent years, which has in turn pushed up truck transport prices.

Finally, the Nador port still has limited capacity for agricultural exports. It does not have a container terminal, so all exports are shipped on trucks to Europe or in bulk. Container exports are transported to Casablanca, raising costs. “There are not enough regular shipping routes from Nador to Europe. Local consumption and imports are not sufficient to justify their creation,” said Ramdani. The impact of the economic crisis means this is unlikely to change in the near term, but maritime shipping options will increase with regional economic activity. In particular, plans to establish a trade and trans-shipment port, Nador West Med, 30 km from the existing port would stimulate the sector.