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Morocco: Record Inflation and Exports Spike Food Prices

Vegetables on Moroccan markets are almost as expensive as in some French supermarkets, with a minimum wage that is five times lower: the country’s agricultural model, based on exports, is being called into question by record inflation, which is provoking anger among the population.

The inflationary surge, +10.1% year-on-year in February, including a 20.1% rise in food products, according to the High Commission for Planning (HCP), has earned the executive criticism from all sides in the middle of the holy month of Ramadan, when consumption increases.

If the scale of the demonstrations against the high cost of living remains limited, discontent is growing.

“The rise in prices is a disgrace (…), we are an agricultural country and yet vegetables are expensive,” exasperated demonstrators in front of the Parliament in Rabat on 8 April.

At the beginning of February, the government suspended the export of certain products, notably tomatoes, in order to supply the local market, prompting protests from professional associations who asked Prime Minister Aziz Akhannouch to reverse this measure.

For the head of the HCP, Ahmed Lahlimi, this crisis questions the viability of the Moroccan agricultural model, especially since this key sector of the economy (13% of GDP and 14% of exports) is exposed to recurrent droughts and climate change.

“Agriculture must undergo a revolution to change its production system, move towards food sovereignty and produce what we consume in the first place,” Mr Lahlimi pleaded at the end of March in an interview with the news website Médias24.

  • External factors”

Faced with recriminations, Agriculture Minister Mohamed Sadiki attributed the jump in food prices to “external and cyclical factors”, such as the soaring cost of raw materials and a cold snap that delayed the tomato harvest.

In 2008, Morocco adopted an ambitious “Green Morocco Plan” (PMV) which has enabled it to achieve food self-sufficiency of between 50% and 100% depending on the supply chain.

Since the adoption of the PMV 15 years ago, agricultural production has doubled in value: from 5.6 to more than 11 billion euros, despite the loss of about 7 billion cubic metres of rainfall annually since 1985.

But the kingdom remains at the mercy of a drought that has become structural “which reduces the cultivated area and therefore the supply, causing prices to rise,” explains Abderrahim Handouf, an agricultural engineer specialising in irrigation, to AFP.

Added to this are the costs of imported raw materials (seeds, energy, nitrogen fertilisers, etc.) which have jumped “by 30% to 70%”, according to the Ministry of Agriculture. The same applies to wheat imports.

  • Food Sovereignty‘ –

The “Green Morocco Plan” (renamed “Generation Green” for the period 2020-30) has made fruit and vegetable exports a priority, which has weighed on the local market and encouraged soaring prices.

There are calls for a reorientation of Moroccan agricultural policy towards a strategy that “ensures food sovereignty, starting with the seed industry, where Morocco is lagging far behind”, Handouf said.

Another difficulty for the executive is reforming the marketing system, which is plagued by middlemen who earn “three to four times more than the transfer value”, according to fruit and vegetable producers who complained in a letter sent to Mr Akhannouch on 31 March.

The government has announced several operations to fight speculators. These measures “have not had the expected results”, admits government spokesman Mustapha Baïtas.

The executive promises that prices will soon fall.

In the meantime, the Central Bank of Morocco last month raised its key rate to 3% — the third increase in six months — in order to curb the galloping inflation that is affecting modest and vulnerable households.

This decision has displeased the government, which is counting on a recovery through growth, still sluggish, and is worried about “negative repercussions on the purchasing power of Moroccans,” according to the media.

For his part, the High Commissioner for Planning, Ahmed Lahlimi, believes that inflation will persist as long as “we have not made reforms to improve our supply and productivity, with work to clean up our food distribution channels”.

Source: africanews