Agribusiness: The shocks of a two-speed industry

The agribusiness sector is full of paradoxes. Although Morocco is an agricultural country with a strong export calling, it also imports a large part of its domestic consumption at a high price, especially at a time marked by inflation, soaring commodity prices, disruptions caused by the war in Ukraine, climate change, falling rainfall, reduced yields from plots of land and fruit trees, and other issues. Furthermore, consumption of processed products remains low compared with neighboring countries. Another drawback is that volumes in the agribusiness sector account for no more than 12% of Morocco’s industrial exports. What’s more, SMEs with fewer than 200 employees make up the majority (95%) of companies in the sector. In other words, large, structured groups account for barely 5%. Among them are such benchmark companies as Copag, Centrale Danone, Cosumar, Koutoubia, Diana Holding, Unimer, and Holmarcom… Be that as it may, the sector remains characterized by strong ambivalence. While there are national champions, there are also many small, poorly structured production units.

According to an analysis by the Moroccan Institute of Strategic Intelligence (IMIS), “this ambivalence is largely explained by the gap between the upstream and downstream parts of the value chain”. According to this think tank, “even if agricultural production has been greatly increased in recent years, thanks in particular to the Green Morocco Plan and its successor ‘Generation Green’ strategy, the transformation of the raw material into an industrial product, for both domestic consumption and international markets, has not yet been achieved”.  In order to overcome this agro-industrial paradox, IMIS recommends that investment needs to be stepped up, especially in agricultural processing and value-addition, attracting investors, mergers, and consolidations between entities.  The Institute also points to the numerous challenges facing the sector, both endogenous and exogenous, notably those linked to climate change, the instability of world geopolitics, the war in Ukraine, post-Covid disruptions, and other problems. These are all exogenous factors that dictate a high level of responsiveness, agility, constant monitoring, and strong resilience.

Amin RBOUB