UfM, FAO and EBRD seek to boost food security in the Mediterranean region

Business Development and Employment

5 May 2015, Barcelona. Boosting sustainable agricultural production and trade is one of the main priorities for the southern and eastern rim of the Mediterranean, where most countries produce insufficient quantities of food staples. For this reason, the Food and Agriculture Organization of the United Nations (FAO), the European Bank for Reconstruction and Development (EBRD) and the Union for the Mediterranean (UfM) co-organised the “Private Sector Forum on Food Security in the Southern and Eastern Mediterranean Region”, a two-day conference (5-6 May) to deepen relationships between the public and private sector – from farmers and their organisations to small, medium and large agribusiness enterprises – and to develop initiatives to increase investment in agricultural and food systems.

Opened by the Mayor of Barcelona, Xavier Trias, the Secretary General at the Ministry of Agriculture, Food and Environment in Spain, Carlos Cabanas Godino, and the Catalan Conseller for Agriculture, Livestock, Fisheries, Food and Natural Environment, Josep Maria Pelegrí, the Forum has gathered high-level policy-makers, financial institutions and representatives from the private sector, research centres and academia. The Forum offers the opportunity to discuss how the public and private sectors can collaborate to bolster food security in the region by enabling sustainable private investment in a region characterised by population growth, natural-resource constraints and a structural deficit in the production of staple food.

Trade flows are growing

The countries of the southern and eastern Mediterranean region import half of their basic crops. Imports of agricultural food products to the region have risen by US$ 69 billion, or 63 per cent, between 2002 and 2013. Meanwhile, exports have risen fivefold since 2000, to US$31 billion, including dramatic increases in fruit and vegetable shipments to the Middle East and North African markets.

In 2013 the region imported 29 million tonnes of wheat. It is increasingly dependent on imports for key staples such as grains, sugar and vegetable oil, which supply the majority of calories consumed. Furthermore, moving grain from port to mill can cost up to four times more than the global standard, due to slow turnaround times for vessels, storage costs, and high product losses.
This high demand for basic food products is mainly due to rapid population growth in a region which has limited and fragile natural resources – in particular, land and water – and an acute vulnerability to climate change. The region also suffers from under-investment in agriculture and insufficient private sector participation.

During the two-day Forum, participants will examine ways to tackle these challenges. Discussions will focus on how to boost local production of fruit and vegetables for export; further diversify import suppliers and export markets; enhance procurement policies supplemented by well-designed strategic-reserve policies; better structure food value chains; increase investment in research and development; and make import processes cheaper. Furthermore, stronger regional integration of agricultural markets would help countries cope with supply shocks and would mitigate changes in food prices.

At the Forum, EBRD Vice President Philippe le Houérou noted: “In recent years, food security has become one of the EBRD’s priorities. A dynamic, competitive and inclusive agribusiness industry, driven by private sector participation, can be a powerful force to promote food security. In the next three years, the EBRD aims to invest over €300 million in the region’s agribusinesses, from SMEs and family farms to larger agro-processing companies, to reinforce the private sector role in enhancing food security. We are also combining our efforts to put in place policies that encourage investment, to build more efficient import value chains, and to encourage more inter- and intra-regional trade, which will help achieve this potential.”

Southern and eastern Mediterranean countries could shift from a model in which they seek to meet all of their own food needs, to an agricultural self-reliance model based on using comparative advantages. Under this model, export earnings generated by food products appropriate to the region are used to purchase imports of food goods that are not suited for local production.

Making the most of valuable water

While the Mediterranean region is an ancient agricultural heartland, it faces growing constraints on natural resources. Its population on the Southern and Eastern rim is expected to grow significantly, reaching 360 million by 2030. At the same time, climate-change forecasts suggest that precipitation levels in the region could decline by 10 to 40 per cent by 2050.

“To become as efficient as possible, investments in the agricultural sector must make the best use of scarce natural resources in the region. For example, every drop of water has to be used with extreme care and to generate the highest possible value,” said Laurent Thomas, FAO Assistant Director-General for Technical Cooperation.

He further noted: “FAO is active in providing policy and technical advice to member countries dealing with water scarcity as a corporate priority for the region, and I praise all actors investing in water-saving technologies. Other FAO priorities for the region include building resilience for food security and nutrition and supporting small-scale agriculture for inclusive development.”

A forthcoming FAO analysis will show that natural-resource constraints support the region’s comparative advantage in growing higher-value crops such as olives and other fruit and vegetables. Higher export levels of products in which the region enjoys a comparative advantage would also help cushion the effects of potential global food-price inflation such as the increases that shook much of the region in 2008.

Mobilising all private players, mapping priority initiatives

Although agriculture in the region is increasingly dynamic, it is also characterised by a myriad of smallholders and small rural enterprises. This profile poses a particular challenge for policy-makers.

“Youth employment is a burning issue in the region. We see agriculture as part of the solution because it can generate sustainable sources of income and jobs in rural areas”, said UfM Secretary-General Fathallah Sijilmassi. “Small producers and enterprises should be properly included in agricultural food chains”. He also noted that this Forum falls within the UfM strategy for private-sector development as a driving force to foster regional integration in the Mediterranean region.

As experience shows, agricultural economic growth is most effective when it is inclusive, allowing smallholders access to credit and market opportunities. Participants explored the role that cooperatives can play in procuring key inputs, and agreed that the domestic private sector can bring an array of innovative solutions to the region’s food security equation.

To help realise that potential, FAO, the EBRD and the UfM have reiterated their willingness to ensure that the voices of the private-sector and farmers’ organisations are heard in policy forums at regional and national levels.

Complementing the EBRD’s promise of investment, the institutions are committed to mobilising technical assistance that can support policy platforms. These platforms would consider issues such as Egypt’s grain import infrastructure, Tunisia’s olive oil sector, Morocco’s horticultural sector, the role of cooperatives, as well as water-efficient technologies and agricultural practices across the region.