Agriculture is an important aspect of economy of MENA region, despite the fact that the region suffers from water scarcity and is very dry. Various North African countries across Mediterranean Sea are highly reliant on agriculture like Egypt, Morocco and Tunisia. The contribution of agriculture to overall Gross Domestic Product varies greatly across these nations from about 3% in Kingdom of Saudi Arabia to 14% in Egypt. Large scale irrigation along with modernisation has supported extensive production of cash crops which includes fruits, vegetables, cereals, and sugar in the Middle East. The water scarcity along with high evaporation rate is responsible for such low percentage of agriculture in the nations in Arabian Peninsula. However, Agriculture is still of special interest to these countries as the whole Arabian Peninsula is majorly dependent on the imports for meeting it food demands.
As of 2015, the Agriculture sector in the MENA region is valued at USD billion and is expected to grow at a CAGR of 11.27% for the next five years. Agriculture sector is mainly driven by higher health consciousness, innovations in science and technology, rising disposable income and rising population. Only Saudi, UAE and Oman produces 70% of their consumption, whereas the remaining countries produces only 40-50% of food. Lack of farming land, scarcity of water and unfavourable climatic conditions are acting as the barriers for cultivation. Keeping in mind the growth in food consumption, the governments in these nations are taking all the measures to improve local production. New technology and latest methods of farming are being implemented to grow crops. Many storage facilities, slaughter houses and farms have been setup and many are in the pipeline.
Even though high rate of depletion of aquifers have forced few nations like Saudi Arabia to stop production of water intensive crops, the production of other crops are likely to continue. Brazil, USA, India and France dominates the agriculture market in the MENA region accounting for more than 70% of the total agricultural imports. The import reaches its peak just before Haj season not only because of the higher inflow of pilgrimage tourists but also because of increase in the domestic demand.
The report has been segmented on the basis of type of Agricultural products as well as on the basis of geography (country). The main segments on the basis of type of agricultural products includes horticulture, animal husbandry, pisciculture and staple crops including fruits and vegetables.
Key Developments:
1) The signing of Greater Arab Free trade Agreement (GAFTA) which aims to reduce tariffs and trade barriers, is likely to increase the intra MENA trade in the region. It is evident from the fact that trade among MENA countries have risen sharply in the last few years. As per IMF data, intra MENA trade has surpassed US $ 2.5 trillion.
2) The Syrian Crisis and the instability in the region has plummeted the availability of livestock and food production in the region mainly because of rising number of abandoned livestock, sinking of cultivated areas and the lack of fodder & vaccines. This has affected various small nations like Jordon, which imports food from Syria. Rise in Syrian refugees in Jordon has increased demand of food in the country. Thus, falling supply along with rising demand has skyrocketed the price of meat and allied agro products in many neighbouring nations.