Agriculture in the southern and eastern Mediterranean requires productive partnerships between the public and private sectors
The Fertile Crescent that stretches from the Levant to Iraq has long been known as the birthplace of agriculture and the cradle of ancient civilisations which it fed and watered for thousands of years.
But now the region is under serious threat from climate change, struggling to produce enough food for its growing population. Local producers face a dramatic reduction in natural resources – land and water in particular.
FAO, EBRD and the UfM Secretariat are convening high-level policymakers, financing institutions and CEOs from leading agribusiness companies, to deepen relationships between the public and private sector and develop initiatives to increase agricultural investment in this region.
While agriculture in the region uses approximately 85 per cent of available freshwater, these resources are among the lowest in the world. Freshwater levels have decreased by two-thirds over the last 40 years and are expected to fall a further 50 per cent by 2050. 45 per cent of agricultural land is exposed to salinity, depletion of soil nutrients, or wind and water erosion.
The challenge of providing food across the region will increase further as the population of 280 million continues to expand rapidly and as higher incomes and a more educated urban population lead to changing consumption patterns aiming at quality food products.
Most countries will have to rely on imports to meet demand, putting pressure on their already fragile economies.
For far too long in this region agricultural policies have been driven by the public sector, leading to neglect and a lack of investment.
The time has come to develop an inclusive approach that can respond to the needs of a transforming society; systems that are not only more efficient in terms of production and the use of labour and resources, but also more effective in terms of food security, job creation and environmental sustainability.
This will require productive partnerships between the public and private sectors, which will need to explore new ways of working together.
The public sector has a crucial role to play in providing an environment that supports private sector investment, by promoting transparency and good governance, essential tools to foster transition and to promote market liberalisation.
In a more conducive environment for investment, private-sector involvement in agribusiness can increase financing for infrastructure and logistics to better manage food imports and exports, reducing food waste and relieving some of the burden on national budgets.
The farming sector in the region remains very fragmented, with many small producers operating in the informal sector. This adds to the difficulty of unlocking the region’s potential, making it harder to be systematic about gaining access to technology, know-how and financing.
In the past, this was also the case in northern Mediterranean countries such as Italy, Portugal and Spain. There, solutions were found through efficient aggregation and the development of cooperative systems, applied research and more structured food chains.
The availability of knowledge exchange as well as more sophisticated import and export planning to match supply and demand can contribute to better use of resources and higher-value local production.
The EBRD will continue to support countries of the southern and eastern Mediterranean region as they pursue policies that will open up opportunities for increased private investment. It has already provided financing in excess of €150 million, and mobilised additional private investment, to help develop dairy, olive oil and meat processing as well as to improve logistics in agricultural commodity trade.
Over the next three years, the EBRD will strengthen food security in the region by investing over €300 million in both smaller farms and firms and larger processing companies in the agribusiness sector. This support will be an opportunity for producers to differentiate their goods on the market and could lead to further development of processing activities.
Improved food safety and quality standards linked to efficient regulation and access to finance can pave the way for these countries to increase the supply of food for their own populations. It can also enable them to enter European Union markets with high-quality products and to increase exports to neighboring regions, such as the Gulf and eastern Europe.
Gilles Mettetal is Director, Agribusiness, and Iride Ceccacci is Food Security Economist for the EBRD