A Lebanese farmer’s tale: Amid coronavirus, struggles to import supplies, prices rise
The Lebanese agriculture and food production industry has come under multiple threats, and the coronavirus-spurred economic contraction has exacerbated the hit already laid upon the sector by the ongoing currency crisis. Experts warn that compounding issues in the country could lead to production decreases and further price increases in the coming months.
Food prices in the country are already on the rise as inflation has begun to soar and the local currency has lost half its value against the dollar.
To buy imported supplies, farmers and food producers must withdraw Lebanese lira and convert them to dollars at the inflated black-market rate, if they can secure the dollars.
“You have to be able to transfer money out of Lebanon to pay for the seeds and the fertilizers and the medicines and the farming equipment – all of this, they’re telling you, ‘Stop. You can’t do it,’” said Ibrahim Tarchichi, president of the Syndicate of Farmers and Peasants in the Beqaa and general manager of a farmers’ cooperative of about 35 small and large farmers who grow crops including potatoes, onions, watermelons, lettuce, beans, peas, and barley.
Although technically the restrictions are not supposed to apply to “fresh money” brought into the country since October 2019, including money farmers earn from exporting produce, Tarchichi said that has not been the case in practice.
Tarchichi’s son, Mohammad, is the general manager of the Marina Frozen Fries factory in the town of Nasriyeh in Lebanon’s eastern Beqaa Valley, which used to pump out some 16 tons of frozen French fries each day, to be delivered to restaurants, hotels, and supermarkets around Lebanon and, in some cases, shipped abroad.
Now, with Lebanon under a countrywide lockdown since March 15 to combat the spread of the coronavirus and restaurants closed except for delivery operations during limited hours, the factory is sitting idle.
But even before the lockdown, Mohammad said, he was facing problems.
“Today if I want to import shortening, which is the most important thing to me for the factory – that is oil to fry with – I’m forbidden to withdraw [dollars] from my money that’s in the bank,” he said. “…I have to go and buy dollars on the black market to be able to transfer them.”
Meanwhile, companies that used to allow farmers to buy supplies on credit and pay them back with the proceeds of harvest are now demanding payments in cash.
“There are many farmers who were not able to plant this year because of the lack of money,” Ibrahim said. “…And some farmers because they don’t have money, planted without fertilizer, because there was no one to give them credit.”
Downturn in crops planted
While there is not yet enough data to show to what extent the economic pressures have impacted agricultural production, a remote sensing analysis conducted by American University of Beirut assistant professor of agriculture Hadi Jaafar using satellite imagery gave an initial indication of a slowdown.
Jaafar’s analysis shows an 18 percent decrease in the area of cereal crops planted – wheat and barley among others – in the Beqaa Valley in spring 2020 compared to the previous year, although Jaafar noted that the amount of crops planted this year is still above the long-term average.
Since those crops were planted primarily in November and December, they may not reflect the full effect of the economic crisis.
Jaafar said that in the longer term, the coronavirus may exacerbate the situation, as it has led to increased costs for imports, and in some cases has caused delays in shipping.
“Luckily, we’re entering summer, so most of the farmers have already planted their crops,” he said. “…But if this corona crisis goes on for a longer period, and if for example we cannot import seeds from the Netherlands, from the United States, from other countries, then we will be affected very soon.”
In January of this year, the Center for Research and Lebanese Agricultural Studies (Centre de Recherche et d'Etudes Agricole Libanais), a research center tracking the agriculture industry in Lebanon, projected that economic pressures would lead to sharply curtailed production throughout the agricultural sector in 2020.
The center predicted that the total value of Lebanese agriculture production will fall by 38 percent this year compared to 2018, from $1.9 billion to $1.2 billon, with the value of food crop production projected to decrease by almost 70 percent from 2018 to 2020, from $180.9 million to $58.2 million.
Effects on consumers
The increasing squeeze on farmers and food producers, as well as the increasing cost of imports, has already contributed to rising food prices on supermarket shelves.
Data from the World Food Programme, for instance, shows that the average cost of bulgur in Lebanon rose from 1,585 lira ($1.05 at the official rate) per kilogram in September 2019 to 2,211 lira in February 2020.
Jason Naoufal, owner of Frutzco, a fruit and vegetable store in the town of Adma north of Beirut, tracks daily price changes at the central markets in the area. According to the data he has collected, the average price of cucumbers – which are not generally subject to seasonal fluctuations, since they are grown in greenhouses – increased from an average of 1,500 lira per kilogram in the last quarter of 2019 to 2,250 in the first quarter of 2020. The average tomato price went up from 1,307 lira per kilogram to 2,130 in the same period, he said.
Ibrahim Tarchichi acknowledged the price increases, but said, “The farmers are not the reason for this. The reason for it is the banks, which have prevented the farmer from accessing his capital.”
From a food security perspective, Jaafar said now the question is, “Until when will (the prices) continue to increase, and when are we going to reach the poverty level where a high percentage of people cannot pay for their daily food due to this increase in prices?”
While government officials have spoken of a need to support local productive industries, and some political parties have begun campaigns to increase planting on unused land, it remains to be seen to what extent those initiatives will be able to offset the economic pressures on farmers.
Jaafar said a concrete plan of action is needed.
“I think the government should do a better job of trying to minimize the agricultural crop imports unless they are extremely needed by the country, because then you don’t have to pay in foreign currency for that – and at the same time, you would be supporting local production,” he said.