Lebanon’s produce going nowhere
Beirut - The protracted conflict in Syria coupled with the economic crisis in Egypt and difficult access to the Gulf countries’ markets has dealt severe setbacks to Lebanon’s agricultural exports, including its main crops of apples and bananas.
More than two years since the closure of the transit route through Syria in May 2015 made it impossible for Lebanese exporters to reach markets in Jordan, Iraq and the Gulf by land, the government has failed to find a plausible alternative route.
“The ability to maintain and improve access to export markets is most critical for the performance of the agriculture sector,” said Antoine Howayek, president of the Lebanese Farmers’ Association. “The government has been incapable to find a good temporary alternative to the closure of the land route to help farmers and exporters overcome the crisis caused by conflicts and tensions in the region.”
Lebanese agriculture depends heavily on exports to Middle Eastern markets, which dropped at least 35% since the closure of the land route. Exporters now send their merchandise by sea at a much higher cost.
“The government should have declared a state of emergency in the agricultural sector and devised an emergency plan,” Howayek said. “We have suggested that the government buy a number of ferries to transport the Lebanese products for free and maintain a regular access to outside markets without incurring many extra costs on the farmers and exporters to no avail.”
After protests by cultivators two years ago, the government subsidised refrigerated trucks with drivers by $2,000. Trucks and refrigerated containers are ferried to ports in Egypt, Saudi Arabia and Aqaba in Jordan and then continue to market by land.
Fruit, including apples, citrus, bananas and grapes, make up Lebanon’s main exports, accounting to 46% of total agricultural exports in 2015, compared to 42% for vegetables, particularly potatoes and leafy greens.
Syria has traditionally been Lebanon’s largest trading partner for agricultural produce, especially bananas, followed by Egypt for apples.
“We used to export 95,000 tonnes of bananas to Syria but after the war started, our banana exports dropped to 35,000-30,000 tonnes,” Howayek said, adding that the overall agricultural exports to Syria sharply declined in the past five years. They were down more than 32% in 2015 compared to 2012 levels.
The economic crisis in Egypt has also taken a toll. It had been the largest importer of apples from Lebanon, accounting for more 65% of total apple exports, said Naim Saleh, president of the Fruit and Vegetable Exporters Syndicate in Lebanon.
“We were deeply affected by the foreign exchange crisis in Egypt, which imports an average of 80,000 tonnes of apples annually,” Saleh said.
“One kilo of apples selling at 8 Egyptian pounds used to be equivalent to almost $1 before 2016. The farmers then made a profit of 750 Lebanese pounds (50 cents) per kilo. Today, $1 makes 20 Egyptian pounds. While the price of the kilo in Egypt did not change, the profit for the Lebanese farmers is down by more than half at 300 Lebanese pounds (20 cents) per kilo,” Saleh said.
“While the volume of apples exported to Egypt may have increased, the returns have nosedived because of the pound’s depreciation,” he added.
Apple exports to Iraq decreased because of the difficulty in the routing and the higher cost incurred by the closure of the crossing through Syria. “In the past, apples were sent to Iraq via Syria at the cost of $4,000 per truck; today we are exporting apples to Iraq via Turkey and Erbil at a double cost of $8,000. This definitely affected exports to Iraq, especially during the last months when fighting against ISIS (the Islamic State) was raging,” Saleh said.
Lebanese agricultural exports to Libya have dropped because of insecurity in the North African country.
Lebanese agricultural products were no longer as competitive since exports by sea started, Howayek argued.
“We used to export 120,000 tonnes of citrus fruits in 2009 and 2010. This Exports of citrus fruits have gone down to some 40,000-50,000 tonnes because we have no longer competitive prices, which used to be the case when the merchandise was transported by land,” Howayek said.
He blasted the government’s subsidy to refrigerated trucks as “a superficial and aesthetic” move that did not really alleviate the burden on exporters and farmers.
“We have a banana crisis because Syria reduced its purchases. We have an apple crisis because of the devaluation of the Egyptian pound. At the same time, the cost of exports has increased. We have had a series of crises for the past four to five years amid total idleness of the government,” he said.