Jordanian farmers are set to benefit from new export routes and a drive to incorporate thousands of Syrian refugees into the domestic workforce.
Oxford Business Group
Despite high domestic production, food exports continue to be hampered by the closure of key trade routes between Jordan and Syria, its northern neighbor.
Jordanian authorities closed the last official border crossing at Jaber in April 2015, when Damascus lost control of the area. Prior to the outbreak of the conflict, the crossing had been a major trade route, providing an outlet for Jordanian goods on the one hand and a conduit for inter-regional trade between Turkey, Europe, and the GCC on the other.
Even before the border closure, the conflict in Iraq and Syria had stalled much of Jordan’s agricultural exports. Some 400,000 tons, or close to half of Jordan’s exported fruits and vegetables, had been destined for these two markets, with another 70,000 earmarked for Lebanon and Turkey combined. “Before the war, Jordan used to export more than 250,000 tons of fruits and vegetables every year to Syria and Europe,” Zuweir Jweihan, president of the Jordan Exporters and Producers Association for Fruits and Vegetables, told local media in January. “After the war started, the largest amount of agricultural produce never exceeded around 60,000 tons.”
Jordanian authorities have been looking for alternate outlets for domestic produce, including sending supplies south to their GCC neighbors. “Agricultural produce exported to the Gulf countries is expected to surpass exports during the same period last year,” Nimer Haddadin, spokesperson from the Ministry of Agriculture, told local media earlier this year, adding that a total of 50 refrigerated trucks carrying 900 tons of fruit and vegetables were heading to the Gulf states every day. The Gulf market currently consumes around 83 percent of Jordan’s fruit and vegetable output.
Strengthening trade ties with its GCC neighbors may be a prudent first step, but according to industry stakeholders, it’s not a complete solution. While summertime demand is strong in the Gulf states, consumer appetite is weaker in the winter, which could expose Jordanian farmers to seasonal oversupply. “The problem is where to export the fruits and vegetables which we produce during winter,” Jweihan said. Jordan’s annual production of fruits and vegetables stands at around 2.5 million tons, 75 percent of which is produced in winter, and half of that is destined for export, he said.
Eastern Europe could present a possible winter trade route. Prior to the war in Syria, Jordanian produce exporters had been working to develop contractual relationships with traders in EU members like Hungary and Romania.
Indeed, there does appear to be significant scope for export growth to European markets. While the EU accounts for a relatively small share of Jordan’s outbound trade flows, EU imports of Jordanian food and raw materials grew by a compound annual growth rate of nearly 14 percent between 2010 and 2014 to reach $37 million, according to the European Commission.
Also, in late 2015, Minister of Agriculture Akef al Zoubi said Russia was another export market being targeted. “Russia is an important market, equivalent in size to the European market,” he told media, adding that trade with Russia could lead other Eastern European countries to follow suit.
In early February, Jordanian stakeholders and donor countries met in London at the Supporting Syria and the Region Conference to finalize the so-called Jordan Compact.
The plan calls on the Kingdom to create up to 200,000 jobs for Syrian refugees in the development zones of Irbid, Karak, Muwaqqar, Maan, and Mafraq.
Sectors targeted for job creation include industrial projects in designated development zones, along with sectors that already employ a high number of non-Jordanian workers, such as construction, services, manual labor, and agriculture.
Channeling labor into the agricultural sector could be especially promising for boosting exports, given that food already comprises an important part of Jordan’s overall merchandise exports.
Between 2008 and 2014, food as a share of merchandise exports grew from 13.7 percent to 20.4 percent, giving Jordan one of the highest ratios in the region, according to World Bank data.
In support of these efforts, the international community pledged $1.7 billion worth of grants. While development banks also pledged to double available financing to $1.9 billion.
Oliver Cornock, Managing Editor, Oxford Business Group
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