This article is supported by the Friedrich Naumann Foundation Beirut Office. The opinions expressed here do not necessarily reflect those of the donor.

As Lebanon grapples with its economic turmoil, the agricultural sector stands at the crossroads of despair and hope. With challenges escalating since the onset of the economic crisis in October 2019, agriculture’s decline has been sharp, leading to rising food prices and pressing concerns about food security.

Agriculture plays a relatively minor role in Lebanon’s economy despite the country having the highest proportion of arable land in the Arab world. Spanning over 200,000 hectares (494,000 acres), the agricultural sector accounts for a mere 5 percent of Lebanon’s GDP and employs 8 percent of its active workforce. In rural areas such as Akkar, Dinniyeh, and Northern Bekaa, agricultural activities contribute substantially to the local GDP, constituting up to 80% of economic output. 

Beyond raw agricultural output, the sector plays a significant role in the nation’s agro-food industry, adding another 5 percent to GDP. This industry also employs an additional 8 percent of the workforce, making it a major economic employer. The Food and Agriculture Organization (FAO) has identified the agro-food sector as a prominent and rapidly growing source of employment in Lebanon. [1]

Previous estimates from 2018 paint an even more compelling picture of the agro-food sector’s importance. It accounted for a remarkable 38% of the country’s industrial output and made up 2.9% of its GDP, solidifying its position as the largest contributor to the industrial sector’s output. The agro-food industry was estimated at $1.6 billion and exhibited significant growth, boasting a Compound Annual Growth Rate (CAGR) of 9.5% between 2010 and 2018.[2]

A once-thriving sector, Lebanese agriculture was already struggling with issues like inefficient water usage, inadequate infrastructure, and limited access to finance. The sharp economic downturn compounded these problems, with political instability obstructing agricultural production and causing major spoilage and economic losses to both producers and consumers across the value chain. Furthermore, the pandemic- and politics-induced border closures heavily impacted exports, squeezing farmer revenues.

Deep-Rooted Agricultural Woes

Generally, Lebanese agriculture has been characterized by: (1) high production costs driven by high input prices (fixed costs and rent of agricultural land, among others), and (2) small-sized holdings, which are unable to take advantage of economies of scale. From heightened production costs reducing competitiveness to an over-reliance on seasonal low-skilled labor, the agricultural sector faces numerous challenges:

• Financial strain: Limited access to credit and the banking sector’s hesitation in supporting agriculture have stifled farmers’ abilities to invest and innovate. Lebanese farmers have always grappled with challenges in securing credit. Prior to the crisis, the banking sector was their sole source of financial support. However, banks in Lebanon often perceive agriculture as a volatile industry with unpredictable yields and markets, leading to their hesitance in backing farmers. The Kafalat program stood as the only lending source, but it too ceased operations amid the crisis.

• Labor challenges: A significant portion of Lebanon’s agricultural workforce hinges on seasonal labor, primarily sourced from neighboring Syria. This heavy reliance on external, often unskilled, labor, coupled with a high migration rate of Lebanese youth from their villages, have curtailed the introduction of modern techniques and best farming practices that a skilled workforce might offer.

• Supply chain barriers: Navigating the intricate supply chain presents its own set of challenges. Disparities between supply and demand, and often exploitative trade dynamics, further strain the agricultural sector. A lack of bargaining power and transparency paired with non-compliance with quality standards has hampered effective product marketing and export potential. These issues stem from a lack of trust between producers and middlemen, and disconnections in the supply chain, leading to quality and marketing problems.

• Infrastructure: Declining productivity, lack of agricultural roads and essential amenities, and decaying irrigation systems impede growth. The state of agricultural infrastructure poses yet another challenge. Based on the 2010 agricultural census, roughly 47,000 hectares of cultivable land remain unused, making up over 20% of total arable area. A combination of rising terrace maintenance costs and a significant rural exodus, especially in regions like Mount Lebanon (36%), has led to cultivators increasingly abandoning their land.

• Political and regulatory lapses: Weaknesses in public extension services, lack of adequate agricultural research application, and political interferences have restricted sectoral progress. The volatile political landscape has not been kind either. External factors, notably the Syrian conflict, have severed Lebanon’s overland routes, cutting off traditional export conduits to lucrative markets in the Gulf and Iraq.

Furthermore, as the world struggles with climate change, Lebanon's agricultural sector faces its own environmental challenges. Reckless use of pesticides, fertilizers, and costly water resources threaten the ecological balance and the very fabric of Lebanon’s agricultural resilience.

The Silver Lining: Potential Growth Opportunities

Despite this dark picture, the agricultural landscape is not devoid of hope. With rich culinary traditions and unique potential for agro-tourism and agro-food processing, the sector could leverage its inherent strengths to overcome current difficulties. International collaborations, government policies focusing on infrastructure, and favorable trade agreements could steer the industry toward prosperity.

The potential of specific crops and agro-products, especially those with comparative advantage and that offer competitive pricing on the global stage, could pave the way for increased agricultural investment. The blossoming wine sector stands as a testament to this potential.

In addition, by embracing innovation, Lebanese farmers might find themselves better equipped to tackle the crisis. Integrating advanced solutions, from automation and data analytics to smart farming practices, can herald a new era of agricultural prosperity. Collaboration with tech providers and startups promises a future where the sector is less reliant on imports and more efficient.

In these trying times, the role of both international and local organizations is paramount. Initiatives like cash-for-work programs offer temporary employment and could serve as a lifeline for the most vulnerable. A collaborative approach, among the government, civil society, and the international community could catalyze change.

As the agricultural sector stands today, it could benefit from a multi-pronged strategy encompassing production enhancement, improved marketing tactics, organizational restructuring, and proactive policy-making. Efforts should be directed toward capacity building, infrastructure development, financial support, and incorporating state-of-the-art agricultural practices. Infrastructure development, robust logistics, enhanced packaging, and export promotion are vital on the marketing front.

Collaboration lies at the heart of this rejuvenation effort. Public-private partnerships, coupled with the expertise of universities and research institutions, can drive quality control and best practices. Furthermore, the Ministry of Agriculture needs to play a more active role, emphasizing cooperative initiatives, farmer registries, and the overall enhancement of agricultural education.

At the policy level, there is a need to develop a comprehensive import-export calendar and stringent controls on inferior imports to modernizing market regulations. Lebanon can reclaim its agricultural legacy by fostering contract farming and ensuring that the interests of both investors and farmers are safeguarded.

Footnotes

[1] Food and Agriculture Organization (FAO). (2023). Lebanon at a Glance. Webpage. Retrieved from https://www.fao.org/lebanon /fao-in-lebanon/lebanon-at-a -glance/fr/

[2] IDAL - Sectors in Focus - Agri-Food (investinlebanon.gov.lb)