Lebanese Center for Policy Studies - Economic Policy Research

Strategic Options for the Agriculture and the

Agri-Food Industry in a Dynamic Global Environment

Introduction

Objective

The objective of this report is to examine the competitiveness of the agro-food sector, assess its performance, and examine its prospects. To this end, the study aims:

to outline the main characteristics of Lebanon's agricultural and agro-food sectors;
to examine the competitiveness and efficiency of the agro-food sector;
to identify the products that Lebanon has a comparative advantage in with respect to the countries in the region;
to examine the agricultural production and marketing system, with a view to determine the main problems and constraints facing the sector with particular emphasis on the Baalbek-Hermel Region;
to identify the main features of the Government policies and programs related to both sectors;
to outline the main international developments and changes and assess their implications;
to recommend strategic options and policy measures that will foster development in rural areas and promote agro-industrial exports.

Methodology

The team of researchers working on the project used several approaches to meet the objectives of the study. In brief, the approaches used are as follows (find a detailed explanation of the methodology in appendix 1):

Collection of data from various sources including the Central Administration of Statistics, Bank of Lebanon Annual Reports, Saade, Ministry of Agriculture, Industrial Census published by the Ministry of Industry, and CCIAB.
Reviewing the literature on international changes and developments that cover issues such as globalization, Uruguay Round of Trade Negotiations, environmental concerns and issues, trends in global consumption and agricultural marketing.
Conducting field surveys in Lebanon and other neighboring countries including Egypt, Israel, Jordan, Palestine, and Syria. In the case of Lebanon, the criteria of selecting the companies interviewed are export orientation, market share, and size of enterprises.
Conducting a field survey with the farmers of the Baalbek Hermel. The interviews were conducted informally with the Local Development Community Committees in the communities of Hermel, El-Qaa’, Nabi Othman, Laboueh, Irsal, and Baalbek, Chief Technical Advisor and staff members of the United Nations Development Program, Members of the Program who initiated Local Development and Credit Committees, and Program Local Committee in the region.
Analyzing the competitiveness of the agro-food sector in Lebanon and the comparative advantage of Lebanon’s main competitors using the conceptual framework of Porter. In his seminal work, Michael Porter has constructed a model that analyzes the competitiveness of an industry by examining 6 factors which include: factor, demand, related and supporting industries, firm strategy, structure, and rivalry, government regulations and policies, and chances. These elements individually and as a system determine the competitiveness of an industry.
Analyzing the comparative advantage of Lebanon’s agro-food products by using Balassa’s quantitative approach. This requires the collection and analysis of data on exports and imports at the level of category and sub-category of products. The analysis examines the agro-food trade balance of Lebanon vis-à-vis Cyprus, Egypt, Israel, Jordan, Syria, and Turkey.

Plan of the Report

The report is divided into five chapters:

Chapter I presents the main features of Lebanon’s agricultural and agro-industrial sectors.
Chapter II studies the competitiveness of the Lebanese agro-food sector. This chapter consists of two sections: Section A examines the competitiveness of the agro-food sector with a special focus on the factor, demand, supporting and related industries, and firm structure, strategy, and rivalry conditions. On the other hand, section B analyzes the competitive advantage of Lebanon’s main competitors: Egypt, Israel, Jordan, and Syria with the objective to draw out lessons to be learned. This chapter has been analyzed within the conceptual framework of Porter.
Chapter III identifies the products that Lebanon has or may have a comparative advantage in with respect to the countries in the region.
Chapter IV presents the main findings of the Baalbek-Hermel rapid appraisal report and highlights the main problems and constraints the agro-food sector is facing in that region.
Chapter V presents the conclusions, policy implications, recommendations and strategic options that will foster development in rural areas and promote agro-food exports.
Finally, the annexes include the methodology adopted in the report, a brief survey on the previous studies on agriculture and agro-food sectors, four country reports, tables, charts, and graphs.

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